Home > Budgeting and Saving Money > Back to School Finances for Parents: How to Finance Your Child’s Education

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Before COVID-19, August meant most parents were gearing up to see their kids off to school and return to the normal schedules offered by fall. In 2020, you may be gearing up to handle school at home, take on a hybrid situation, or send your kids to school every day. Whatever your options are this year and in future years, one fact remains consistent: the start of the school year can be expensive. Check out our Back to School Finances for Parents Guide below to get some tips on covering those costs.

How Expensive Back to School Really Is

The cost of returning to school varies by family, location, and school district, but it’s rarely nothing. According to the National Retail Foundation, the cost of returning to public school is about $697 per household every year. In 2019, here’s how those expenses broke down on average:

  • $117 on school supplies
  • $200 on technology devices, computers, or related fees
  • $136 on shoes
  • $240 on clothing, not including shoes

And that doesn’t take into account costs for extracurricular activities such as band, clubs, or sports—all of which can come with expenses at the beginning of the school year and beyond. Factor in lunch money, transportation costs, book fairs, field trips, and other random expenses, and you can easily shell out $1,000 or more per child per school year.

If you’re sending a student off to college this year, expenses can be much higher. The average cost of tuition, room, and board at public undergraduate universities in 2018 was more than $17,000 per year. The cost at private higher education institutions can run more than double that. And that’s before you pay for any dorm items, extracurriculars, transportation, and other expenses.

How Parents Can Financially Prepare for Back to School

School is expensive whether you’ve got a brand-new kindergartner, a seasoned high schooler, or a young adult entering the college landscape. For all these situations, planning ahead and leveraging smart financial resources can help you cover the costs of school without putting undue stress on the household coffers.

Paying for K–12 Educational Expenses for Your Child

Planning for back-to-school K­–12 expenses is actually a year-round activity. If you’ve already purchased items for this school year, think about how you can plan ahead for next year.

  • Create a budget for the school year as soon as possible. Plan for costs such as supplies, clothing, activities, classroom fees, and transportation. Make sure to account for any new or expected costs—such as the cost of masks or remote learning tools during COVID-19.
  • Save when possible to fund some or all of the planned expenses for the next school year.
  • Research assistance options and other financial resources for back to school. Some school districts give credits or grants for parents who choose to put their kids in private school or home school. In many areas, private organizations including churches as well as the school systems themselves offer assistance with obtaining school supplies.
  • Create a plan for using credit responsibly to cover some of these expenses as necessary. You might take out a small personal loan to cover new band equipment, for example, or use a credit card to buy school supplies.

Funding a College Education

Financial planning for higher education should start well before your child is ready to move out.

  • Start saving early. Plan as early as possible for the large expense of college. Use tools such as 529 savings plans, which can come with perks and rewards to make savings easier.
  • Complete the FAFSA. Make sure your child completes the Free Application for Federal Student Aid as soon as they can each required year. They will most likely need information from you to complete it, so consider doing this together. This is an important step to learning what financial aid your student may qualify for, including Pell Grants and other federal student aid.
  • Look into other financial aid programs. Encourage your child to use all resources at their disposal, including appropriate work study programs, campus jobs, scholarships, and grants. These can provide valuable experience for future resumes as well as spending money.
  • Research student loan options. It’s likely that you or your child will need to take out student loans to pay for their education. Look into federal and private student loan options in advance so you know what to expect and what you can afford.
  • Talk to the financial aid office. The school’s financial aid office will be able to help you understand your aid eligibility and direct you to even more resources.
  • Use credit cards, personal loans, and other forms of credit responsibly and with moderation to help fund each semester. Remember that college takes four or more years, so you don’t want to burn through your financial resources the first year.

4 Credit Cards to Maximize Rewards During Back to School

One way to reduce the sting of back-to-school costs is to turn them into rewards. Consider using a rewards card that lets you score cash back, points, or miles when you’re paying for school fees, supplies, and clothing for the new year. This can reduce the overall cost of these expenses.

Don’t have a rewards credit card? If you have good credit, consider applying for one of the options below. Your school shopping could also help you earn a sign-up bonus.

  1. The TD Cash Credit Card. Earn $150 in cash back as a sign-up bonus when you spend $500 in the first 90 days of account opening—easy to do with school shopping! You also get 2% cash back on grocery store spending, turning lunch supplies into rewards, and 1% on most other purchases.

    TD Cash Credit Card

    Apply Now
    on TD Bank's secure website
    Card Details
    Intro Apr:
    0% Introductory APR for the first 15 billing cycles after Account opening.

    Ongoing Apr:
    12.99%, 17.99% or 22.99%, based on your creditworthiness

    Balance Transfer:
    0% Introductory APR for the first 15 billing cycles after Account opening.

    Annual Fee:
    $0

    Credit Needed:
    Excellent-Good
    Snapshot of Card Features
    • Earn $150 Cash Back when you spend $500 within 90 days after account opening
    • Earn 3% Cash Back on dining
    • Earn 2% Cash Back at grocery stores
    • Earn 1% Cash Back on all other eligible purchases
    • $0 Annual Fee
    • $0 Foreign Transaction Fee
    • Visa Zero Liability
    • Instant credit card replacement
    • Digital Wallet
    • After introductory period, balance transfer APR will be 12.99%, 17.99% or 22.99%, based on your creditworthiness

    Card Details +

  2. The Amalgamated Bank of Chicago Platinum Rewards Mastercard. Earn a $150 statement credit when you spend $1,200 in the first 90 days of account opening. Earn 5x rewards on spending in certain quarterly categories such as groceries, dining, travel, and automotive, up to $1,500 per quarter. Earn 1x rewards on all other qualified spending.

    Amalgamated Bank of Chicago Platinum Rewards Mastercard® Credit Card

    Apply Now
    on Amalgamated Bank of Chicago's secure website
    Card Details
    Intro Apr:
    0% on Purchases for 12 months

    Ongoing Apr:
    12.90% - 22.90% Variable APR on purchases

    Balance Transfer:
    12.90% - 22.90% Variable APR on balance transfers

    Annual Fee:
    $0

    Credit Needed:
    Excellent
    Snapshot of Card Features
    • 0% Intro APR on Purchases for 12 months; after that the variable APR will be 12.90% – 22.90% (V), based on your creditworthiness
    • Earn $150 Statement Credit after you spend $1,200 on purchases within the first 90 days from account opening
    • Earn 5x rewards on up to $1,500 in combined purchases each quarter in popular categories such as dining, groceries, travel, and automotive
    • No upper limit on the points you can accumulate, and since points never expire, you can save up for a big award!
    • Earn Points on Every Purchase! It’s simple: $1 = 1 Point
    • No Annual Fee or Foreign Transaction Fee
    • Select Your Rewards Your Way
    • No Foreign Transaction Fee

    Card Details +

  3. The Deserve Edu. A rewards card for college students, this card comes with free Amazon Student Prime. You also earn 1% cash back on all purchases.

    Deserve Edu

    Apply Now
    on Celtic Bank's secure website
    Card Details
    Intro Apr:
    N/A

    Ongoing Apr:
    18.74% Variable

    Balance Transfer:
    N/A

    Annual Fee:
    $0

    Credit Needed:
    Excellent-Good-No Credit
    Snapshot of Card Features
    • Enjoy Amazon Student Prime Membership on us for a year, must be a student to qualify.
    • Earn 1% cash back on all purchases automatically.
    • No Social Security Number required for International Students and no credit history required.
    • No Annual Fee, No Foreign Transaction Fees, and No Late Fee on first late payment.
    • Cell Phone Protection up to $600 when you pay your cell phone bill with Deserve EDU Mastercard along with Mastercard Platinum Benefits
    • Start/Stop card use + stay current with your FICO score with the Deserve mobile app.
    • Start building credit responsibly and enjoy the perks of being a student
    • No Deposit Required.
    • No Foreign Transaction Fees
    • No Annual Fee

    Card Details +

  4. The Blue Cash Preferred Card from American Express. Earn a $250 statement credit when you spend $1,000 in the first 3 months of account opening. You also get 6% cash back on supermarket spending (up to $6,000 per year), 3% cash back at gas stations, and 1% cash back on most other purchases.

    Blue Cash Preferred® Card from American Express

    Apply Now
    on American Express's secure website
    Card Details
    Intro Apr:
    0% for 12 months on purchases

    Ongoing Apr:
    13.99%-23.99% Variable

    Balance Transfer:
    N/A

    Annual Fee:
    $95

    Credit Needed:
    Excellent-Good
    Snapshot of Card Features
    • Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
    • 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
    • 6% Cash Back on select U.S. streaming subscriptions.
    • 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more). 1% Cash Back on other purchases.
    • Low intro APR: 0% for 12 months on purchases from the date of account opening, then a variable rate, currently 13.99% to 23.99%.
    • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
    • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
    • $95 Annual Fee.
    • Terms Apply.

    Card Details +

You might also consider signing up for ExtraCredit. You can apply for certain cards through the app and get cash back when approved via Reward It.

ExtraCredit, Reward Smart Financial Decisions. Learn More

How Do I Teach My Child to Manage Finances?

The financial aspects of the back-to-school season offer an opportunity for teaching your child about responsible money management. Here are some tips for doing so for kids of all ages.

  • Talk about the expense of going back to school in an age-appropriate way. Ask your child to help find deals at the store, such as comparing the cost of different types of notebooks.
  • Make a list of supplies and other items for school. Help your child divide it into necessary needs and nice-to-have wants. Discuss how money resources are limited and you can’t always buy all the things you want. Give your child a budget for “wants” and help them prioritize and choose items.
  • Take time to set up a savings account for your child and talk about the importance of saving money.
  • Consider getting a kid-friendly debit card to help them manage their own personal expenses during the year. This can be a great way to provide some independence for older kids or college students while still offering a bit of support and guidance.

The bottom line is that you’re probably going to have to shell out some cash if you have kids in school. But a bit of planning and thought on your part can turn those expenses into valuable learning opportunities for your kids or even credit card rewards for yourself.

ExtraCredit, Reward Smart Financial Decisions. Learn More

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