Back to School Is Different This Year so Reassess Your Financial Habits

woman and child coloring at the kitchen table
(G. Anthonie Riis/DVIDS)

I'm sure you'll agree that 2020 will be a year to remember -- and it's only August.

The confluence of a global pandemic with the push for social change has altered the way we move through the world, causing many of us to take a second look at our physical and social interactions.

I don't think "business as usual" is in the cards. From a health or societal wellness standpoint, it's just not good enough.

As we shift into back-to-school mode, we anticipate our "new normal" and prepare for many differences. What will school look like for elementary, middle school, high school and college students? How will extracurricular activities evolve? We often have negative associations with change, but now is a good time to remember that different doesn't have to be bad.

From a personal finance perspective, I've been giving thought to how we can make "different" better this fall. Here are four ideas to do just that.

1. Find comfort in routine. As a parent, I was always fond of this time of year. Sure, traffic on the way to work picked up -- although that's not a problem this year as I continue to work from home -- but the chaos and free-for-all of summer quickly gave way to a regular routine.

This year has shown us the value of routine actions -- for example, automatically transferring money to your savings account each period to build a cash cushion -- that secures our financial future. Now is a good time to survey these routines. Is your spending plan on track? Are you saving for goals that are important? Maintaining insurance that's right for today? Building for the future? Ensure your routine is solid, and you'll have actions worth doing the next time things turn crazy.

2. Buy prudently. Next to the holiday season, this time of the year represents the second biggest financial outlay for families with kids. Take time to monitor your expenditures and activities. Earlier this year when the coronavirus forced you to take a hiatus from sports and other extracurriculars, were there any activities you and your children didn't miss? As a new school year begins, you have an opportunity to start fresh and to be intentional about how you spend your money and your time.

We never know what lies around the corner, and having some dry powder instead of the fruits of unnecessary shopping can be valuable. Amongst all that has happened, cash remains king.

3. Start saving early. This fall, college students will embark on a far-from-traditional university experience. While we still don't know the details, it's likely that large classes will be held online and in-person class sizes will be much smaller. In light of all these physical modifications, the financial landscape of higher education hasn't changed. At more than $20,000 per year for in-state schooling, college remains a daunting expense.

If college payments are in your future, make 2020 the year you launched your 529 college savings plan. For college graduates, the average student loan debt is just shy of $40,000. By saving early, you can help chip away at that statistic -- and prepare your children for a solid financial future.

4. Start planning for the holidays. Earlier, I mentioned the holidays as a time of year that tests our spending discipline. With summer still upon us, shift your financial focus -- or at least a bit of it -- to making the holidays financially stress-free. Start setting aside a little money each pay period and, by the time the holidays roll in, you can enjoy them without feeling overwhelmed.

Another tip: Spread out the financial impact of gift-giving by making purchases along the way. Talk to your family about holiday plans that won't create a financial meltdown for anyone.

Without a doubt, 2020 is different. But the future is in our hands. Let's all work together in our homes, our communities and our country to mark it as the year we made a difference.

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