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How Can Debt Interfere With My Child’s Education?

Extra-curricular activities, camps, necessities, entertainment…the cost of raising kids is high.  So, how can your financial situation play a role in your child’s education?

It’s difficult, and sometimes impossible, to plan ahead

When a family is facing major debt, they often get stuck in a cycle of “just getting by” with little room for savings. In regards to children, this can mean:

  • You’re unable to start an education fund for your child’s future education. Any little bit that’s put away now can help your child avoid incurring their own debt in the future.
  • You’re not always able to take advantage of good sales. If your cash flow is impeded and your credit cards are almost or already maxed out, it’s more difficult to grab those clearance deals and stock up on bargains. This can cause you to pay more later for the same items you could find during the summer when spring clothes are on sale, or in September and October when back-to-school gear and outdoor essentials hit rock-bottom prices.
  • You’re always putting out financial fires. When finances are super tight, everything that comes up can feel like a crisis — paying for your child’s class trip, packing healthy lunches or making sure their clothes can transition with the seasons.

How can you deal with debt and get back on track?

Most families are carrying consumer debt, but if servicing that debt is taking up more than 20 per cent of your monthly income, you could be heading for trouble.

Here are some tips for getting out of the danger zone and bringing your debt back to a manageable level:

  1. Create a balanced budget. Personal finance experts suggest putting a minimum of 15 per cent of your monthly income toward debt. This percentage is flexible — if you’re already spending more than 15 per cent each month just keeping up with debt payments, it may be necessary to review other categories in your budget. Look for opportunities to cut back on other expenses so you can devote more than the minimum to getting your consumer debt paid off.
  2. Regularly check up on your financial health.
  3. Look over your debt relief options. Consolidating your debt into an affordable monthly payment can increase your cash flow and allow you to save more money. Consider debt counselling as it could save you up to 60% on your debt repayments.

The best ways to save on back-to-school essentials when you’re on a budget

  • Shop end-of-season sales. All those back-to-school “sales” from January will go to clearance in February and March. If you can hold out, it’s worth the wait.
  • Use a Lunch Box to pack healthy, nutritious school lunches and skip the snack bags and plastic wrap.
  • Buy in bulk. Make your money stretch by stocking up on large quantities of school snacks once or twice a month.
  • Spread out your spending. Don’t wait until the last minute when the stores are a frenzy to do your shopping. Whether it’s back to school, Christmas or any occasion, plan ahead by picking up small items all year round that won’t blow your budget all at once.

Parenting is tough, and as kids grow, expenses will increase. That’s why it’s important to deal with debt now before it snowballs into a bigger issue. Also, planning ahead can save your children from debt down the road. Take some time to talk about money as a family and come up with a plan to save more money going forward.


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