We all have parts of our financial life that could use a little extra care. Maybe you’ve gone through the effort to create a family budget but haven’t taken extras like car registration and vacations into account. Maybe you’re hiding your credit card bills as soon as they show up in the mail and pretending they don’t exist. Wherever you are at, there is always room for improvement, and in this economy, none of us can afford to ignore our financial health.
BlogHer has been a bit of a whirwind experience, as it always is – I’m actually still in California at the moment and I strongly suspect that my kids may have forgotten that I exist. One of the highlights of BlogHer for me was a quiet dinner I had with a handful of amazing bloggers, American Express, and Manisha Thakor a financial literacy advocate for women with some amazing tips for taking control of your finances and staying in control of back-to-school spending.
I’ll definitely be implementing her tips in my back-to-school shopping plans and I wanted to share them with you in case you need any pointers.
Set a Strategy
Back-to-School spending can get out of control fast. Have a strategy in place before you start shopping so you can keep things reigned in. Manisha recommends deciding before-hand if you are going to pay for all school supplies or are going to have your kids pay for anything themselves (a great idea if your kids want more expensive supplies that you are willing to buy).
Set a Budget
It’s easy to go over-budget when you are spending a bit here and a bit there. Set a budget before you start so you know where your limits are. If your kids are older, this can be a great chance to teach them budgeting skills by letting them know what your budget is and how much you have left as you progress with your shopping.
Don’t Go Wide and Deep
Everyone has different priorities when it comes to back to school shopping. Manisha says you can go shallow and wide – meaning you can buy a lot of lower cost items – or you can go narrow and deep, but when you go wide and deep you can get yourself into trouble. Determine whether quality or quantity is most important to you BEFORE you start your back-to-school shopping.
Don’t Shop Too Early
Manisha says that while she normally recommends that you shop early to take advantages of sales and stock up when the prices are low, be careful going back-to-school shopping too early. Most back-to-school sales don’t happen until just before school starts again (and the best deals can actually be found AFTER schools starts and the stores begin clearancing items out). By shopping too early, you also run the risk of your kids changing their minds and deciding they want something different.
Use a Digital Envelope Strategy
Most of us have heard our parents or grandparents rave about the envelope method of budgeting – you create envelopes for each category in your budget and fill it with the amount of cash you have to spend. With the envelope strategy, when that money is gone, it’s gone.
In today’s digital world, cash isn’t always an efficient solution. You can’t track your spending as easily with cash, it’s easy to lose, and it can’t be used for online shopping, which can often enable you to save time and get a better deal than you can find in your local stores.
The idea of the envelope method is still a great one though and it can still be useful today if you create a digital envelope strategy using the American Express prepaid card. You may remember that I’ve been using the American Express prepaid card for my BlogHer expenses. I’m not a fan of credit cards at all but the prepaid card is different because there are no fees and the card will actually not allow you to go overdrawn. You can only spend what’s on the card and when it’s gone, it’s gone – sound familiar?
When you’ve set your budget for back-to-school spending, you can put that amount on an American Express prepaid card and track your spending online to make sure you stay within your budget.
Disclosure: American Express sponsored my trip to BlogHer, however all opinions expressed are my own.