Isabella Canales, a 29-year-old who lives in a Dallas suburb, has been really stressed about money this year: She and her husband make nearly $9,000 a month before taxes, but high living expenses, medical bills and consumer debt payments have almost completely wiped out their budget.
The last thing she wanted was another huge expense, and unfortunately, rising back-to-school fees have pushed her even deeper into debt.
In July, Canales spent about $1,000 on school supplies and clothing for her two older daughters, who are in second and third grade at a local charter school — $200 more than last year. And what’s more, she received a lengthy list of supplies from her 2-year-old’s preschool to buy: index cards, cardstock, Lysol wipes, paints, watercolors, a pencil case, highlighters, paintbrushes and a paint apron.
“I can’t understand what people are living through right now,” Canales said. “When you see the amount of money they have to pay for uniforms and everything else, it’s insane.”
As the start of the 2024-2025 school year approaches, many families are struggling to afford books, clothing and school supplies. For some, this struggle is leading to mounting debt.
Nearly one-third (31%) of U.S. adults who will be making back-to-school purchases this year plan to go into debt (or are already in debt) to pay for them, according to Bankrate’s latest back-to-school survey.
This includes 24% of those who use credit cards and are/plan to use installments to pay off their balances, and 13% who are/plan to use buy now, pay later services. This percentage hasn’t changed much since 2022, the last time Bankrate asked about back-to-school spending, when 29% of back-to-school shoppers were in debt.
This is how people are shopping for back to school as parents and students try to figure out how to buy school supplies this fall.
As inflation has fallen, Americans have become more comfortable paying for things like back-to-school purchases.
— Ted Rothman, Senior Credit Card Analyst, Bankrate
Bankrate’s Back to School Shopping Insights
- Back-to-school tuition debt is common. Thirty-one percent of back-to-school shoppers are in debt because of their spending, up from 29% in 2022. This includes 24% who are using credit cards to carry balances over time and 13% who are using buy now, pay later services.
- Parents are trying to save money this year. 46% of back-to-school shoppers plan to implement savings strategies this year, including 28% who have/plan to look for more deals and coupons than ever before, 22% who have/plan to specifically set aside or budget money, 21% who have/plan to buy cheaper brands than usual, and 19% who have/plan to buy fewer school supplies than last year due to cost.
- From 2022 onwards, the impact of inflation will be smaller. Thirty-two percent of back-to-school shoppers say inflation has changed/will change the way they shop this year, down from 41% in 2022.
One in four back-to-school shoppers take on credit card debt
Nearly half of U.S. adults (49%) plan to do some back-to-school shopping this year, with the majority planning to use a debit card or cash.
Nearly two in three back-to-school shoppers (65%) have used/plan to use a debit card, making it the most popular payment method, followed by cash (57%). Though less common, 35% of back-to-school shoppers plan to use a credit card and pay in full to avoid interest charges.
Thirty-one percent of back-to-school shoppers have incurred or plan to incur debt, including 24% who have used credit cards to carry a balance and 13% who have used or will use buy now, pay later services.
sauce: Bankrate Survey, July 15-17, 2024
Notes: The percentages are of back-to-school shoppers.
From crayons for grade schoolers to pricey tech for college students, families may still be surprised by the cost of school supplies, even if they’re cheaper this year. For example, last year, Bankrate editor-in-chief Amy Sims was surprised by the price of notebooks and other school supplies. This year, school supplies are a bit cheaper.
“For one child who will be in seventh grade in the fall, we spent about $150,” Sims said. “It wasn’t as expensive as it has been in recent years, but it was still a lot of money. But my daughter doesn’t need expensive materials for her education yet. She doesn’t need a computer or anything like that.”
Sims encourages back-to-school shoppers to check out credit card offers during this time to make sure they’re using the best cards to get the most rewards. For example, she bought her daughter’s school supplies at Walmart because several of the cards she has offer extra rewards at Walmart.
46% of back-to-school shoppers are adopting savings strategies
Inflation isn’t affecting as many shoppers as it did in 2022. Only 32% of today’s back-to-school shoppers say inflation has changed/will change their habits, down from 41% in 2022.
According to the U.S. Bureau of Labor Statistics (BLS), consumers experienced record-high inflation in 2022 after the annual inflation rate hit 9.1% in June of that year. Currently, inflation as of June 2024 is just 3% higher than the previous year.
But many shoppers are still trying to stretch their budget as much as possible: Nearly a quarter (22%) of back-to-school shoppers this year had set aside or budgeted money to spend on school supplies.
Additionally, 18% of back-to-school shoppers say spending has/will strain their budget (down from 31% in 2022), and 14% say they felt/will feel pressured to spend more than they can afford (down from 26% in 2022).
sauce: Bankrate Survey, July 15-17, 2024
Notes: The percentages are of back-to-school shoppers.
Nearly half (46%) of back-to-school shoppers are employing strategies to save money this year, such as looking for more sales and coupons than in the past (28%), buying cheaper brands (21%) and buying fewer school supplies than in the past because of costs (19%).
But just as fewer people say inflation will change the way they shop this year, fewer are considering cost-cutting measures than two years ago: In 2022, 47% of back-to-school shoppers said they will look for more deals and coupons than in previous years, 35% said they will buy cheaper brand-name products, and 36% said they will buy fewer school supplies than in previous years due to cost.
“Shoppers aren’t holding their wallets as tightly this year, but it’s important not to let your guard down,” says Ted Rothman, senior industry analyst at Bankrate. “Credit card interest rates and balances are at record highs, and the cumulative effect of all the price increases we’ve seen over the past few years is starting to show.”
High credit card interest rates also affect Americans like Canales, who couldn’t afford to buy school supplies out of her own pocket, on top of other high monthly expenses. She ended up using her credit card, Target card, and Affirm, a buy now, pay later platform, to get her children’s back-to-school supplies. Now she must balance paying off $1,000 in back-to-school expenses while also paying off the rest of her debt.
“I’m not a fan of back-to-school,” Canales said, “We’re just trying to get by right now.”
The fact that fewer people are feeling financial pressure from back-to-school shopping this year is an encouraging sign that inflation is having a lessening impact on Americans’ personal finances than in years past. Still, for some, this back-to-school season is a reminder that the cost of many everyday items remains too high for them to comfortably afford.
3 tips to save money on back to school shopping
If you’re looking at your child’s back-to-school shopping list and wondering how you’re going to buy it all, you’re not alone. Consider these three tips to make this summer’s financial pinch a little easier.
1. Check prices in advance and make an informed budget.
Before you make any big purchases, like back-to-school shopping, you should first create a budget. To know how much you should spend this year, look at last year’s bank statement (or receipts, if available) and use that as a baseline.
Next, research the prices of common school supplies at a few different stores to see what they are currently costing you and get a rough estimate of how much it will cost. Knowing the prices before you go into the store will help you avoid price surprises and help you budget ahead of time.
2. Figure out exactly what you need and when you need it.
To avoid overspending, carefully review your back-to-school shopping list and decide what you need to buy today and what you can do without.
“When shopping back-to-school sales, pay attention to the specifics of your child’s class. My daughter’s teacher separated out essentials from ‘nice to haves,’ so we knew what was expected and what were bonus items for her class,” says Bankrate writer Andrew DeHaan.
Similarly, check with your school to see what items you may need later in the year and space out your purchases. Many back-to-school supplies are on sale at this time of year and can be bought in bulk. However, for items that are now full price, such as winter clothing or athletic or extracurricular equipment, consider purchasing them later in the year to give yourself some breathing room in your budget.
3. Start early and take advantage of tax breaks.
Many states offer local tax holidays on weekends from July through September when certain items are exempt from sales tax to help parents with back-to-school season. Many states only allow certain items to be purchased tax-free up to a certain amount, so check your state’s local tax holidays. For example, Connecticut’s tax holiday runs from August 18-24 and applies to up to $100 worth of clothing and footwear.
These tax-free periods start as early as July, so it’s better to shop earlier than later. Sims recommends starting your back-to-school shopping as soon as you have your child’s school supply list.
“In our area, supplies become more limited as back-to-school season approaches, so in the past I’ve ended up buying more expensive items because the cheaper ones were sold out,” she said.
