Schools across the country are back in session and parents might be struggling as inflation is still testing American’s wallets.
About 30% of parents expect to pay more than $500 on back-to-school supplies this year and are shopping at discount or dollar stores (40%) to save money, according to new research from Empower.
Clothing Tops List
Parents say they’ll spend the most on clothes (84%), ahead of computers/electronics (29%), and books (70%). One in two respondents (49%) say extracurricular activities like sports are a major ongoing expense throughout the school year, and despite rising costs, nearly a third (30%) will continue to prioritize these activities for their children, according to the news release.
Nearly all (85%) surveyed say inflation is impacting their back-to-school spending. To navigate increased costs, parents say they’re cutting back on non-essential expenses (43%), shopping during sales (48%), and 1 in 4 (26%) are buying in bulk. Before hitting stores, 40% of shoppers searched for deals and discounts on Meta, and 10% looked on TikTok.
Outside the classroom, money lessons are in session: on average, respondents say they give kids a weekly allowance of $5 to teach about needs versus wants and setting a budget. When it comes to hopes for their children’s financial futures, 63% say the financial freedom to enjoy life is at the top of the curriculum.
More Key Findings
- The cost of living for college students: Beyond tuition, college students’ groceries (54%), dining hall meals (52%), gas (50%), and parking fees (30%) ring in as their biggest ongoing expenses.
- Scrolling for savings: Social media is a popular source for money-saving hacks with 3 in 10 college students turning to Reddit, followed by YouTube (25%), TikTok (24%), and Instagram (23%).
- Studying the art of AI: Only 14% of students say they use artificial intelligence (AI) to write papers or solve math equations. Instead, they turn to AI technology for idea generation and brainstorming (37%), and research (19%), like money tips.
- A hefty price tag: College students who spent over $500 on back-to-school supplies were 60% more likely to live at home than in a dorm or an apartment.
Have a Financial Plan
Before back-to-school shopping, it’s important to have a financial plan in place. Keith D. Jones, CFPâ, Senior Financial Advisor at Empower, suggests going the extra mile (for extra credit) and sticking to a budget.
“Back-to-school spending, like anything else, can be a bit unpredictable. At the start of the year, create a separate savings goal for school essentials – using the total amount you spent last year as a guide – just like you would for other expenses like car payments or holiday gifts. Saving a little each month, even if incremental, can go a long way and help reduce stress when school starts back up.”
The full report can be found here.
The Survey of 205 college students and 857 parents of K-12 students, was conducted in June 2023 by Fractl on behalf of Empower. All data referenced in the article is from this survey.
1 As of January 31, 2023. Assets under Administration (AUA) refers to the assets administered by Empower pursuant to service contracts, including recordkeeping, for retirement plans and participants, IRAs, and other pension accounts. On Aug. 1, 2022, Empower announced that it is changing the names of various companies within its corporate group to align the names with the Empower brand.
The information contained herein is being provided for discussion purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy or sell securities. All visuals are illustrative only.