Financial anxiety with kids going back to school/college is no minor issue. Parents are responsible for buying school supplies, saving for college tuition and expenses, and making a budget. If you are not financially prepared for all the expenses, you can get overwhelmed.
Unfortunately, as many already know, stress caused by financial situations can make things extremely difficult on a family and anxiety levels can boil over. Here are some helpful tips to help you ease financial worries.
Make a Budget and Stick to It
The very idea of making a budget is dreadful to most people, but you should consider this a priority in anything related to finances. Without a financial plan, you are most likely to find yourself in debt. That said, it is crucial to set aside a few minutes to figure out how much your kids’ expenses will be every semester or school year. List all possible expenses including tuition, cost of living, cost of supplies, etc.
After having an overview of expected expenses, write down all your sources of income and start appropriating. Sometimes, the expenses may be higher than all your income combined. If this is the case, research possible scholarships and tuition discounts to take advantage of. If not, look for another income source to supplement your current income.
Having this kind of financial information can reduce your financial stress and give you a chance to plan ahead. Of course, a budget will not work at all if you do not stick to it. It is necessary to check your spending habits once in a while to see if you are on the right track. Therefore, always list down where your money goes, what expenses to expect, and adjust your budget as often as necessary.
Cut Costs Whenever Possible
While parents want to teach kids independence, if your expenses outweigh your income it’s also crucial to cut costs whenever possible. Ask yourself:
- Do your kids need to stay in an expensive housing option?
- Can they stay with you while they continue with their studies?
- Can they get a roommate?
It is important to teach kids about cost-cutting as well. There is a big difference between a want and a need. While kids often want you to buy them nice stuff, it is okay to say no if the items are not necessary. Teaching kids the value of budgeting and cost-cutting not only helps ease your financial anxiety, but also makes them financially wise in the future.
Unfortunately, this is sometimes easier said than done when you are looking into the teary eyes of your child who wants the same expensive trendy shoes as his classmates in order to “fit in”.
Avoid Credit Card Debt
Remember that credit card debt causes a lot of financial stress. There are many benefits to not using a credit card. For one, you are most likely to avoid temptation. Marketers use a lot of lures like discounts, the illusion of scarcity, free trials, and the like to get you to buy stuff you may not even need. Having a credit card on hand makes it easy to impulsively purchase unnecessary items.
Avoid incurring more debt by not using credit cards as much as possible. Teach your kids not to rely on credit cards as well. Unless you are using a line of credit for business purposes that make you money, use cash or debit for purchases.
Take Advantage of Educational Plans and Funding
As early as possible, plan for the future education of your kids:
- Research educational plans that help you save for your kids’ college tuition and expenses.
- For long term horizons, you may want to invest in mutual funds and stocks.
- For short term horizons, allocate a fixed amount of a portion of your income to get a pre-need plan.
Another way to ease your financial worries is to look into scholarships or grants that your kids can apply for. Many scholarships from various institutions are not claimed because parents do not take the time to do their research. If you run out of options, look into government loans and student lines of credit as a last resort. Remember, it is better for your kids to finish their studies with the help of a loan than to end up not having an education.
Take control of your life and finances by becoming financially literate. Always make a conscious effort to stick to a budget. Never buy anything that is not necessary and avoid credit card debt. As early as possible, plan for your kids’ education. You can ease yourself from financial anxiety if you prepare for the financial challenges ahead.
And remember, even though your children may be upset now and may not understand why they are not getting everything they want for going back to school, they will when they get older. And they may even thank you for it!