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Back to school expenses putting more pressure on post-holiday budgets
Australian parents are set to spend 9 per cent more on back to school supplies this year than they did last year, with three in five saying they plan to cover this cost using buy now pay later (BNPL) or credit cards.
According to research from the Commonwealth Bank, Aussie parents are expected to spend $2 billion on back to school expenses this year.
While the average spend amount per family was found to be $435 (up 9 per cent from the $400 recorded last year), families with three or more children could find themselves paying as much as $880 to cover back to school costs, including new technology such as laptops, new uniforms, and textbooks.
According to the Commonwealth Bank, 63 per cent of shoppers have so many items to purchase that they find it hard to know which are really necessary, while 65 per cent struggle to afford everything they need. Also, 58 per cent of shoppers said they wish they could spread out these payments, and again 58 per cent said they plan to purchase back to school items via BNPL or credit cards.
Commonwealth Bank general manager, Caleb Reeves, described the back to school period as “a time when people can feel financially overwhelmed by all of the spending they have done already over the holiday period – adding to their overall financial strain.”
In November last year, Australians made almost $69 billion worth of transactions on both personal credit cards and debit cards (which many BNPL services are connected to). Both credit cards and BNPL services can put pressure on household budgets, putting Australians at risk of financial stress.
If you're planning to add your family's back to school expenses to BNPL, remember to check consider setting your own limits on how much you'll spend and which platform(s) you'll use. If you're planning to use a credit card instead, remember that if you can repay your debt in full within the card's interest-free days, you shouldn't be charged extra.
If you're struggling with your debts, consider contacting the BNPL or credit card provider about their hardship programs, or a financial counsellor.
Disclaimer
This article is over two years old, last updated on January 27, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent credit cards articles.
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