Four tips for avoiding back to school debt from a financial advisor
Recent figures revealed that back to school expenses are a financial burden for almost two thirds of Irish parents. Here, a money expert weighs in on how best to combat these costs.
As a parent of four children in a blended family, I feel there is a real need to try to budget effectively against the rising costs. These costs, coupled with the rising cost of living and higher expectations of children with phones and other items are making it increasingly more expensive.
So what advice can I give you? Well, here are four things that you can try.
1. Budget, budget, budget
Firstly, doing a financial budget is really useful and there are loads of free apps like Alpha Wealth’s. It is really powerful and it allows you to see where you can save as a lot of us overspend on areas such as insurance and miscellaneous items. It’s only by noting these down that we can really control them.
2. Find cheaper alternatives
I recently spoke to a client who was able to buy their teenage daughter designer brands at lower cost – pre-loved clothes, for example. I wouldn’t have thought this would be a runner, but the clothes were in fantastic condition and the children believed they were brand new. There are more and more of these sites appearing where, if you plan properly, you can save a lot of money. Also, refurbished phones can be a lot cheaper, especially as teenagers see phones as essential items.
3. Savvy spending
Holidays, especially summer holidays, tend to be the catalyst to put parents into debt. A lot of the time this is on a credit card which is the most expensive and easiest debt to get into. One of the ways of tackling this is to really look into holidays that offer value, especially if you have a number of children. I was blown away recently when I booked a holiday to an all-inclusive resort in Spain and they didn’t charge for under 10s. We only had one child, but imagine the savings if you had three or four children under 10! Spending time researching these definitely helps.
4. Claim expenses
Lastly, ensure you are claiming expenses for your children. A lot of parents have health insurance for their children and forget to claim back on expenses, such as dental and outpatient expenses. Also, by using the revenue online system (ros.ie) you will find there is a lot more you can claim for such as rent and working-from-home relief (relevant during Covid) but over 50% of people still haven’t claimed for these.
About Nick Charalambous: Managing Director, Alpha Wealth
With a Cypriot background and having been raised and educated in London, Nick has worked in investment and private banking for some of the biggest banks in the world. With over 25 years of financial services experience in Cork, primarily as a financial advisor with AIB and Ulster Bank, Nick has built up an extensive knowledge of the financial services environment, which he shares with his clients in many areas of personal finance.
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