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5 tips for sensible back-to-school spending

By WTOP Staff

ALEX VEIGA
AP Business Writer

Students may not be thrilled about their summer break drawing to a close, but retailers couldn’t be happier.

That’s because back-to-school shopping traditionally brings in a windfall that’s second only to the December holiday season.

The average family with kids in kindergarten through 12th grade will spend $669.28 on clothes, electronics and other school-related needs this back-to-school season, according to a survey by the National Retail Federation. That amounts to a 5 percent increase from last year.

To help gin up sales, many stores roll out discounts and some states even get in on the act, offering sales tax holidays for clothing, backpacks, even computers.

Hit the stores without a plan, and you could end up overspending.

“It’s an important time to keep a handle on your finances because in the frenzy to get organized it’s easy to make bad purchase decisions,” said Jack Gillis, director of public affairs for the Consumer Federation of America.

Here are five ways to make sure your back-to-school shopping spree stays doesn’t empty your wallet:

1. MAKE A BUDGET

You know what you need, but do you know how much you can afford?

This is the key to keeping an annual shopping trip from swelling into a full-on spree.

Establish a budget that lays out how much you plan to spend on school supplies, clothing, shoes and other immediate needs. Then stick to it.

A good strategy is to begin with what you needed last year. Odds are that won’t change too much from one year to the next. Items like pens, pencils and notebooks tend to be priced competitively. But resist splurging on fancy organizers, desk sets and other items you often can do without.

2. SHOP ON TAX HOLIDAYS

More than a dozen states are giving shoppers a break from paying the state sales tax on certain purchases. The sales tax holidays usually last around three days. The savings can run anywhere from 3 percent to about 7 percent.

In most cases, they apply to clothing and footwear, though typically states restrict the benefit to items that cost $100 or less. Some states also include school supplies and big-ticket items, such as computers.

“All of America loves a sale and this is a sale paid for by government,” said Verenda Smith, deputy director of the Federation of Tax Administrators, an association for state tax administrators.

However, you could end up paying local sales taxes, if any.

And if you’re buying online, the sales tax holidays apply only if the address where the item will be shipped is located in a state offering the sales tax break, Smith said.

Here’s a list of states offering sales tax holidays this year and links to each state website with details on timing and what kind of purchases qualify: http://taxadmin.org/fta/rate/sales_holiday.html .

3. USE CREDIT WISELY

It can be tempting to sign up for a store credit card. Many often entice customers with built-in savings on store purchases and other perks. But think it through, especially if you anticipate not being able to pay down the balance before you start racking up monthly interest charges.

“Unless you’re going to be paying that bill off right away, that great bargain will be quickly eroded by 15-to-19 percent interest rates,” said Gillis.

4. SHOP AROUND

One of the best ways to save money is to comparison shop. This is particularly true for notebooks and other office supplies, as well as clothing.

It may take a little more of a time commitment, and it may mean ordering items online, so be sure that your savings are worthwhile after you factor in shipping costs.

One way to see if you’re getting the best deal is to use price comparison smartphone apps such as PriceGrabber and RedLaser. Users scan the bar code on a product and the apps display a list of stores, if any, where the item is available and at what price.

Another way to get more for your back-to-school money is shopping online at sites like Goodshop.com, which offers coupons good at more than 5,000 stores that then donate up to 20 percent of your purchase to a school or other cause.

5. CONSIDER WAITING

Sure, the stores for-sale signs scream deals to be had. But what’s the harm in waiting a few weeks?

You may not get the same selection, but bargains can be found after the school year begins and stores move to clear out shelves to make space for the next batch of seasonal items.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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