| 10 tips to avoid back-to-school credit woes |
| By Bill Burt
• Bankrate.com |
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You can get Junior back to school
painlessly and economically by following these expert tips designed
to keep you out of a money pit of credit-card debt.
Tip No. 1 is simple: "Avoid any kind of
credit-based purchases."
"Retailers and credit-card issuers heavily promote
consumer spending during back-to-school periods," says Paul
Richard, executive director of the Institute of Consumer Financial
Education in San Diego "ICFE opposes advertising, aimed at
consumers, which promotes indiscriminate credit based spending for
back-to-school supplies."
When embarking on a new-school-term spending spree,
consumers should monitor spending carefully to avoid a mountain
of debt.
| Here are 10 sensible tips on how to steer clear of unnecessary credit-card debt: |
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| 10 sensible tips on how to steer clear of unnecessary credit-card debt |
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1. Don't rush into a spending
spree. Before you embark on a shopping expedition for the
kids, sit down and think things through. Then make a list of what
is needed by category, i.e., clothing, books, sports or music.
2. Go where the bargains are. This means planning ahead. You should follow local media advertising
carefully, watching for store sale fliers, flea markets, garage
sales and clearance sales.
3.
Work to a plan. You'll find it easier on your wallet if you establish a
spending plan for back-to-school necessities, like establishing a timetable for
purchases over several weeks or months.
4.
Comparison shopping is a must. There are so many good deals out there that
it's imperative you comparison shop with at least five different sources for the
best values.
5. Don't go overboard buying
clothing. It's mistake to buy all the clothing your child
needs at the one time. This just means that it will all have to
be replaced at the same time. So spread these purchases over several
weeks or months, which also will allow you extra time to take advantage
of sales, specials and true bargains.
6. Never
use credit cards to spend income not yet earned. For this
so-called convenience, consumers usually have to pay much more in
interest or annual fees or both. Indiscriminate spending must always
be a no-no.
7. Resist
fads. Your kid is likely going to be all over you to buy
the trendiest school clothes and accessories. Don't fall into this
trap. Encourage them to be independent and to stay within their
own style. After all, trendy fads often lose their steam after school
starts -- often because once nearly every child has the trendy item,
the fad fades.
8. Set
money aside. Regardless of time of year, parents should set aside a certain
sum of money every month for school purchases -- particularly if there are several
children in your home with back-to-school needs. This way you won't have to destroy
the budget for one month and dip into money needed for household expenses.
9. Use layaway plans. These
plans are a very practical when it comes to buying such items as
clothing and school supplies. And it's a much better way to go than
a credit card because, in effect, you're making the purchase on
time but interest-free.
10. Don't be afraid to go
the secondhand route. Everything doesn't have to be brand-new.
There's nothing wrong with buying previously used text books, lab
tools and supplies whenever possible.
"Most consumers who spend on credit have become
victims to forces in our society designed to get people to spend
beyond their incomes," says Richard.
"Credit-based spending decisions have a far-greater
negative impact on one's financial future than any investment decision
one might ever make. These decisions include how often to eat out,
how much to spend on back-to-school needs, or redecorating a room,
updating your wardrobe and especially those unplanned spending trips
to the grocery store."
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