As the new school year approaches, the excitement of preparing your kids for another year of learning is often accompanied by financial stress. On average, parents of two children in Minnesota can expect to spend around $1,100 on school supplies and clothing alone. For parents, especially those with low to moderate incomes, balancing the need to provide everything their children require while staying within a budget can be challenging. However, with a well-thought-out plan, you can manage back-to-school expenses without breaking the bank. Let's  explore  some practical budgeting tips that will help you make the most of your money this school year.

1. Assess Needs and Establish a Spending Limit

Before you even think about shopping, take the time to assess what your children truly need for the upcoming school year. Start by reviewing the school supply list provided by the teachers or the school district. Go through your home to see what you already have—there might be leftover supplies from last year or hand-me-downs from older siblings that can be reused.

Once you have a clear picture of what’s needed, it’s time to establish a spending limit. It’s crucial to set a realistic budget that covers the essentials without overspending. For instance, if you have two kids in middle school and a combined household income of $60,000, you might allocate around $500 for back-to-school shopping. This amount can cover school supplies, clothing, and other necessities without straining your finances.

Tip: Writing your budget down in advance ensures you have a clear plan to follow and reduces the temptation to impulse buy. Use budgeting tools or apps to help track your spending as you shop.

Get Ready for Back-to-School Shopping!

2. Be a Smart Shopper: Plan What You Will Purchase

Planning your purchases ahead of time can save you both time and money. Create a detailed list of the items you need to buy and stick to it. This list will keep you focused and prevent you from buying unnecessary items.

To get the best deals, compare prices across different stores and online retailers. Utilize apps that offer price comparisons and cashback rewards. Don’t forget to check for discounts and sales, especially during tax-free weekends when you can save even more.

When shopping, consider buying generic brands for items like notebooks, pens, and paper. These often cost less than name brands and work just as well. For more expensive items like backpacks or electronics, look for quality products that will last longer, reducing the need for replacements during the school year.

Tip: Plan to shop alone if you find it difficult to resist your children's pleas for trendy but unnecessary items. This can help you stay within your budget and avoid impulse purchases.

3. Teaching Kids Independence: Saving for the Future

Teaching your children financial independence is one of the most valuable lessons you can impart. As they grow, involving them in budgeting and saving for their own needs and wants helps build strong financial habits. Encourage them to budget for their wants while you cover their needs. This not only teaches responsibility but also helps them understand the value of money.

One way to start is by opening a Youth Account with First Alliance Credit Union. These accounts are designed to help kids learn the basics of saving and money management. For younger children (ages 0 to 12), a Youth Share Savings Account is a great starting point, requiring only a $5 minimum deposit. This account allows deposits at any time and earns the same interest rates as regular savings accounts, making it an ideal tool for teaching consistent saving habits.

For longer-term goals, consider a Youth Certificate of Deposit. With a $100 minimum balance and flexible terms ranging from 6 to 60 months, this account introduces your child to the power of compounding interest, helping them see how savings can grow over time.

As your child’s savings grow, you might also explore a Youth Money Market Account. With a $500 minimum balance, this account allows for deposits and withdrawals at any time while earning higher interest rates, teaching your child how to manage larger sums of money responsibly.

Start your young saver off on the right path!

4. Plan for Ongoing Expenses: Budget for Back-to-School and Beyond

The expenses don’t stop once the school year begins. Throughout the year, you’ll need to budget for additional costs such as school lunches, field trips, extracurricular activities, and replacement supplies. To manage these ongoing costs, consider creating a sinking fund—a dedicated savings account where you regularly set aside money to cover these future expenses.

Saving regularly throughout the year can alleviate the financial burden when big expenses arise. Setting up a specific account for school-related costs can help you build up the necessary funds gradually, making back-to-school shopping less stressful.

For teenagers (ages 13 to 17), opening a Teen Account is a logical next step. These accounts include all the youth savings options, plus access to checking accounts, debit cards, and online banking. This setup helps them learn how to manage money in more advanced ways, preparing them for financial independence.

Tip: To further encourage financial independence, consider using tools like the Greenlight debit card and money app, available as a perk for First Alliance members. Greenlight empowers kids and teens to manage their own money with guidance, helping them learn how to earn, save, spend wisely, and even invest. By giving them a budget for their wants, you allow them to make decisions about how to spend their money, reinforcing the lessons of financial responsibility and independence.

How One Family Uses Greenlight for Financial Literacy: Real Life Case Study

Let’s look at how the Green family uses Greenlight to teach their children financial literacy while easing the back-to-school burden. Sarah and Mark Green have two children, Alex, 14, and Emma, 10. They want to teach their kids how to manage money effectively, so they set up Youth and Teen Accounts for both kids at First Alliance and introduced them to the Greenlight app.

Each month, Sarah and Mark deposit a set amount into Alex and Emma’s accounts. They explain that this money is for their “wants”—things like new clothes, accessories, or special school supplies that aren’t strictly necessary. Using Greenlight, Alex and Emma can track their spending, save towards goals, and even invest a portion of their money in fractional shares of stocks. The app also includes educational resources like videos and quizzes, which the kids use to learn more about smart money management.

By letting Alex and Emma manage their own budgets for non-essential items, Sarah and Mark are teaching them valuable lessons about prioritizing expenses, making thoughtful purchasing decisions, and understanding the importance of saving. Plus, this approach takes some of the pressure off Sarah and Mark during the back-to-school season, as they can focus their budget on the essentials while empowering their kids to handle the extras.

Get Greenlight, the debit card and money app for kids, on us!† 💳💰

5. How to Get Free or Discounted School Supplies

Sometimes, the best way to stay within your budget is to find free or discounted items. Many communities and organizations offer free school supplies to families in need. Check with local charities, community centers, and even your school district to see what programs are available.

Retailers also often run back-to-school sales where you can score great deals on supplies. Don’t forget to look online for digital coupons and cashback offers. Sites like Rakuten or Honey can help you find additional savings.

If you’re part of a parent group or community organization, consider organizing a supply swap. This way, you can exchange items your kids no longer need for something they do, all without spending a dime.

Tip: Look for second-hand items for things like backpacks and clothing. Thrift stores and consignment shops  like Saver or the Salvation Army Thrift Store can be treasure troves for gently used, affordable items.

6. Plan Ahead for Next Year: Budget-Friendly Tips for the Future

The best time to start budgeting for next year’s back-to-school expenses is right after this year’s shopping is done. Begin by setting aside a small amount of money each month specifically for school expenses. By the time the next school year rolls around, you’ll have a nice cushion to cover the costs.

Additionally, keep an eye out for sales throughout the year. Items like notebooks, pencils, and even clothing often go on clearance after the back-to-school season ends. Stock up on these deals and store them for next year.

Tip: Use a budgeting calculator to help you determine how much to save each month. By spreading out the cost over the year, you can avoid the stress of a large expense all at once.

Back-to-School Budgeting for a Stress-Free School Year

Back-to-school season doesn’t have to be a financial burden. By assessing your needs, setting a spending limit, being a smart shopper, planning for ongoing expenses, and teaching your kids about financial independence, you can keep your budget on track. With a little planning and creativity, you’ll be able to provide everything your kids need for a successful school year without straining your finances. Start planning now, and you’ll be in great shape not just for this school year but for years to come.