Keep back-to-school costs from emptying walletThe start of the school year doesn't have to break the bank. Here are tips for saving money this season.
By: Eileen Ambrose, The Baltimore Sun
The start of the school year doesn't have to break the bank. Here are tips for saving money this season:
SHOPPING: When buying school supplies and clothes, make saving a family affair, said Mike Allen, a father of seven and president of Shopping-Bargains.com. Parents and children should make an inventory of what they need, set a budget and shop together. Teach kids to be price-conscious by letting them keep the savings for coming under budget. "It's a life lesson," Allen said.
Children grow so fast that clothes might be hardly worn before they're discarded. Organize a clothes swap among friends or in your community so you can trade gently used items with others, Allen suggests. Or, exchange clothes, books and other school supplies online at Swapmamas.com or Craigslist, said Sue Perry, deputy editor for ShopSmart magazine.
And if you're not using coupons, you're overpaying, according to Perry. Find coupons in newspaper circulars or online at Couponmom.com, Couponcabin.com or Coupons.com.
"Shop in stages; don't bulk up," Perry said. You don't want to load up on jeans that a child will soon outgrow, even if they are on sale today. Retailers will have more sales, especially around the holidays.
Keep up with sales by registering at ShopItToMe.com, which will send e-mail alerts when brand items you want are marked down.
College students on a budget should check out Sonystyle.com or Delloutlet.com if they're looking for computers, printers or electronics at a discount, Perry said. The sites sell electronics that have been refurbished, returned unopened or bear slight blemishes that don't affect performance.
TEXTBOOKS: The price of new textbooks continues to climb, but it is becoming easier to shop for — or rent — cheaper alternatives.
As of July, federal law requires colleges to give advance notice of required textbooks and prices in course schedules so that students have time to shop around.
Many college students buy discounted books through Half.com, Bookfinder.com and Amazon.com. Even private high school students who must buy their own books are finding deals through Amazon.
But a growing trend is renting college textbooks from sites such as Chegg.com or CampusBookRentals.com.
Felicity Davenport, a junior at the University of Maryland-College Park said she saves a few hundred dollars each semester by buying used books. "I have lab and science classes. The books are $200 apiece (new)," said the 20-year-old public health major.
She'll save even more by renting this fall semester. One used book runs about $80, but Davenport plans to pay $30 to rent it from Chegg, which offers more than 4 million book titles. And Davenport likes that she won't have to worry about reselling the book when the semester is over; she can ship it back for free.
Campus bookstores also are entering the rental business. The University of Maryland bookstore started renting books earlier this year as well as offering a digital version at discounts of more than 50 percent, manager Michael Gore said. It has more than 700 titles for rent, and at least that many electronic textbooks, he said.
CREDIT CARDS: Thanks to federal reforms this year, credit-card marketers won't be able to invade campuses and entice students with T-shirts or gift cards to sign up for easy money. Also, students under 21 won't be able to get plastic unless they have a co-signer or can show they have the means to pay bills.
"It will stop a lot of the impulse sign-ups," said Gerri Detweiler, personal finance expert for Credit.com.
She predicts that many more parents will be co-signing on credit cards for their children, but that can be perilous. Co-signing puts you on the hook for unpaid bills. Detweiler also warned that a parent's credit score can take a hit if the child maxes out the card or fails to pay on time.
She recommends that students establish a secured card, where they put a deposit, say $250, in the bank that acts as a line of credit on the card. Students using the card responsibly will build up a good credit history, she said.
Or students can first learn how to manage money by using a debit card. Don't sign up for overdraft protection, though. Without it, transactions will be denied when your bank account is out of money. But that's better than paying an average of $35 fee for each overdrawn transaction.
Once students reach 21, they can apply for a card on their own.
INSURANCE: Students often arrive on campus with all their worldly possessions. But what about thieves or accidents?
Turns out a parent's homeowner's policy likely covers the belongings of students living on campus. Coverage is typically limited to 10 percent of the parents' coverage for personal belongings, said Jeanne Salvatore, an Insurance Information Institute spokeswoman. Check your policy.
But some parents don't want to make claims on homeowners' insurance, preferring to buy a small student policy that insures against theft, natural disasters or drinks spilled on laptops, said Karen Gallagher, president of National Student Services Inc. Her agency's most popular policy costs $160 for $6,000 of coverage with a $25 deductible, she said. Student policies can also be found at Collegestudentinsurance.com and Safeware.com.
You can also buy insurance that entitles the holder to reimbursement for school costs if a student withdraws from college for illness or death, though schools often refund all or some of tuition and fees in those situations.
Tom Ruby, director of the bursar's office at Towson University in Maryland, said the school of 21,000 students receives a handful of reimbursement requests monthly. All or some of tuition and fees will be refunded if documentation supporting the claim is submitted, he said.
Federal health care reform brings changes for students, too. Young adults used to be booted off a parent's insurance once they reached a certain age, often during or just before college. Starting Sept. 23, families renewing coverage can keep a child on the plan until age 26.
TUITION BILLS: With the economic downturn crimping budgets and tuition still sky high at some institutions, aid appeals are up at universities. Most of the requests for aid reviews at the College of Notre Dame of Maryland are coming because parents lost jobs, said Zhanna Goltser, financial aid director.
Contact the school's aid office to explore your options if you can't pay a tuition bill. Most schools have plans that allow you to spread payments over 10 months. Parents may also qualify for a federal PLUS loan that will cover any tuition shortfall.
Schools can adjust federal aid applications in certain situations, such as a job loss. That could make the student eligible for a federal Pell Grant or subsidized loan.
Schools sometimes have money to help. Notre Dame of Maryland created a "retention grant" last year for students who can't qualify for more federal aid but need only $1,000 or $2,000 to stay in school. And the University of Maryland-College Park has a similar program called Keep Me Maryland.