“Sending my son back to school this month has been really hard. His father, who usually pays for school fees and books, recently lost his job and had nothing to contribute. I’ve had to borrow from friends to pay the fees, and most of the books have not been bought yet. How can I prevent this from happening again next year?”

School is in and many parents are still reeling from the effects of back-to-school expenses. Some may feel that September comes around too quickly, as they are never quite financially ready to meet the major expenses that this month brings.

Some people rely on using ‘partner’ plans or borrowing from credit unions to meet the September back-to-school costs. However, these strategies might not be enough to take care of the regular monthly and term expenses that will arise throughout the school year.

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A better solution to providing for school costs is to make a projection for the expected yearly expenses and create a savings plan to meet your needs. It’s much easier to put aside a smaller amount each month than to find lump sums in September, January and April when school fees are usually due.

If you’re estimating your future costs based on what was spent over the last school year, add 5 to 10 per cent to the figures to plan for price increases. Here’s a four-step guide to create a school expenses savings plan:

a) estimate the total you will spend over the school year on supplies, fees, lunch, transportation, etc.
b) divide this total amount by twelve
c) save this amount every month in a short term investment account
d) use this account only to pay for school-related expenses

Let’s look at a worked example to see how you can save towards providing for the expected school expenses throughout the entire year:

Yearly expenses

Books & Supplies J$ 15,000
Book Rental J$ 4,000
Uniforms & Shoes J$ 6,000

Term expenses
School Fee J$35,000 x3 = J$105,000
Insurance J$ 700 x3 = J$ 2,100

Monthly expenses
Transportation J$ 600 x10 = J$ 6,000
Lunch J$ 2,000 x10 = J$ 20,000
After school activities J$ 2,000 x10 = J$ 20,000

Total expenses for year J$178,100
Monthly saving required J$ 14,840

Daily saving required J$ 500

As the example shows, in order to get the cash flow required, you would need to save just under J$15,000 per month. Finding an extra J$15,000 per month to contribute towards school expenses might seem like an impossible task, so let’s break it down into a smaller figure, by concentrating on the daily savings of J$500 that’s required.

How can you find an extra J$500 per day? Firstly, look at the expense side to see where you can cut back. If you spend a lot on cellular phone calls, reduce the amount spent on phone cards. You can also take lunch from home instead of buying fast food.

Stick to your grocery list and don’t make impulse purchases at the supermarket. Go through your budget carefully to see where you can eliminate unnecessary items.

On the income side, is there any service that you can provide that will bring in an extra J$500 per day? Do you have any products that you could offer to friends and colleagues that would give you a consistent source of extra income?

The more you ask the question “How can I find J$500 per day?” is the more you will come up with solutions to meet your goal.