Keys to Avoiding
Back-to-School Debt?
Make a Plan and Use It!

In today’s economic environment, credit purchases can cost double the original purchase price and take years to pay off completely, according to Ron Hatfield, family financial specialist with West Virginia University Extension Service.

With the school year approaching and the economy still in turmoil, it’s more critical than ever for you to budget your money, monitor your spending, and avoid credit card debt.

Under the pressure of today’s financial crunch, Hatfield says, more consumers may be tempted to rely on credit cards for back-to-school purchases, but that could be a dangerous choice.

It’s easy to get caught up in the advertising frenzy that retailers throw at you as the new school year approaches, which is how many consumers get into trouble. People often have good intentions of paying off credit card charges at the end of each month. But because of a variety circumstances, most don’t.

Take Control

Hatfield advises individuals and families to create and follow a plan for new school-year shopping.

• Pay cash for fast foods, gas, and anything that will be consumed before it’s paid off.
• Set your spending limits. Track your actual spending by using only one credit card and by keeping a spending log and all receipts in one place.
• Before you shop, look for ways to recycle last year’s supplies, clothing, and shoes—provided they still fit and are not in disrepair.
• Make a list of all the things you are likely to spend money on. Include not only clothing, but also such items as paper, notebooks, pens, special project items, and school trips.
• Then determine how much money you have available to spend and the approximate cost of the items on your list. If the estimated cost calls for more money than you have available to spend, look for items you can remove from your list.
• Another way to avoid overspending is to have a specific amount of cash in hand and not withdraw more money when that cash is gone.

Stay in Control

After creating a back-to-school budget, Hatfield says, it’s important to stick to it.

You may find it difficult to stick to your plan under the pressure of back-to-school advertising and the misguided need to “keep up with the Joneses.”

If that happens, Hatfield says, it may be helpful to think of consequences: What would overspending do to you and your family in the long run?

It is important to live within your means—even when the newest pair of Nike shoes is flashed on the TV screen.

Hatfield reminds parents: “No child has ever failed or succeeded in school because of the brand of clothing worn to class.”

Finally, the WVU Extension educator suggests individuals and families to tackle this assignment: Try turning these back-to-school budgeting steps into year-round habits.

Learn more about using credit cards safely, budgeting money effectively, and developing other money management skills by visiting WVU-ES and eXtension personal finance websites.