Back-to-school shopping can cost families big bucksIt’s that time of year again when parents hit the stores for back-to-school shopping — a lot of back-to-school shopping.
By: Steve Kuchera, Duluth News Tribune
It’s that time of year again when parents hit the stores for back-to-school shopping — a lot of back-to-school shopping.
Families with school-aged children will spend, on average, more than $630 on back-to-school items this year, according to the National Retail Federation. While that is just a ding to many families, for some it is the first punch in a one-two economic blow that leaves them in credit-card debt by New Year’s.
“People get loaded up in August and September and don’t have time to deal with that new credit-card debt before the holidays roll in,” said Dale Lewis, president and CEO of Park State Bank, who has written about the issue. “Revolving credit can get out of hand so fast, so easily.
“It’s becoming a second Christmas to the retailers,” Lewis said. “It’s a big spending time.”
The fact that schools ask parents to buy more supplies than previously is one reason for the increase, Lewis said. Other factors include more electronics and higher-priced clothes.
While school spending is hardly the only reason people find themselves in credit-card debt, it can be a factor, said Elaina Johannessen, financial counseling supervisor at Lutheran Social Service in Duluth.
“Any expenses that come up during the year can contribute to credit-card debt because a lot of times people are not saving up for those expenses,” she said.
Christy Knight of Cherry uses a credit card for back-to-school purchases for her two daughters, and she tries to spread out school purchases throughout the summer.
“It gets worse every year,” Knight said Tuesday while shopping in Duluth.
But she understands that cash-strapped schools can’t buy all the supplies they once did.
“You want your kids to have good equipment so they can do well in school,” she said. “You do what you have to do.”
Knight estimates her family will spend $1,000 on school supplies and clothes.
According to a survey sponsored by the National Retail Federation, families with school-age children will spend an average of $634.78 on clothing and shoes — the biggest expenditures — supplies and electronics this year, down from $688.62 last year. Total spending on back-to-school items is expected to reach $26.7 billion.
Back-to-college spending is higher. The survey projects an average of $836.83 for clothing, electronics, dorm furnishings and other costs, down from $907.22 last year. Total spending on back-to-college items is expected to reach $45.8 billion, for a grand total of $72.5 billion.
Holiday retail sales totaled $579.8 billion last year, according to the National Retail Federation.
Families surveyed said they will spend less for back-to-school items this year than last, in part because they bought so much in 2012. In addition, more than 80 percent said economic conditions will affect their back-to-school spending — 36.6 percent said they will do more comparative shopping online and 18.5 percent will shop online more often. And fewer plan to buy electronic devices; those who do, say they will spend less this year than last — $199.05 versus $217.88.
“Having splurged on their growing children’s needs last year, parents will ask their kids to reuse what they can for the upcoming school season,” National Retail Federation President and CEO Matthew Shay said in a news release. “As they continue to grapple with the impact of increased payroll taxes, Americans will look to cut corners where they can, but will buy what their kids need. It’s important to note, however, that spending levels are still well above where they were a few years ago.”
In 2004, for example, average back-to-school spending was $483.28, while average back-to-college spending was $463.71, according to the retail federation.
Kaytee Ross of Duluth was shopping Tuesday with her college-bound daughter, Paige. Ross credits St. Cloud State University with giving them timely notice on what Paige will need.
“We have been doing the shopping all summer,” getting items at a decent cost, Ross said. She uses a credit card to earn points, and pays off the card each month.
Like Knight and Ross, Lesa Gish of Duluth tries to spread out her family’s back-to-school purchases.
“We try to buy throughout the summer so we don’t have to buy all at once,” Gish said. She estimates that — with shoes and clothes — she’ll spend $500 for back-to-school items for her two daughters. To keep costs down, the family takes inventory of what they need.
“If we can reuse things, we do. We don’t buy new each year,” said Gish, who pays for purchases with a debit card.
Gish, Knight and Ross are all practicing one or more of the tips Johannessen gives for avoiding debt.
“The main thing is set limits, make lists, plan ahead as much as you can,” she said. “And if you have credit cards and can’t pay them off in full, don’t use them if you can absolutely help it.”
People who find themselves in financial trouble should seek counseling to get out of debt.
“A debt management plan is a great way to do that,” Johannessen said. “Typically, it lowers interest rates, it can even lower payments, and it’s a set time you’re paying your cards back — five years or less,” while making minimum payments can take far longer and cost far more.