Start With a Look at Last Year’s Numbers
The most useful budgeting tool you have is your own spending history. Pull up last year's bank or credit card statements and look at what came out of your account in July and August. If you’re surprised by what you see, you’re in good company. Most people are. The real number tends to run higher than what you remember, because back-toschool spending is usually scattered across multiple trips, stores, and categories.
That honest baseline is your starting point. Once you have a real number to work with, you can adjust for changes.
A new grade often means new supplies, and a summer growth spurt might mean a new wardrobe is in order.
Here’s Where Most Families Tend To Overspend
Every year, a few categories consistently catch families off guard. It’s better to be aware before you go shopping than to be shocked when the total pops up at checkout.
Clothing
It's easy to underestimate — and impossible to predict — how much and how fast children grow. Resist buying the full fall wardrobe in August. Kids' tastes and sizing change fast, and spacing out your purchases is often smarter than loading up at once.
Technology
A new school year has a funny way of making it seem like a new device is a necessity. Sometimes it is, but check with the school first about what's required versus what your kiddo claims they need.
All the extras
New backpack, new lunch box, the birthday party in September, the field trip in October. Items and events like these feel small individually, but they add up. Building a seasonal "miscellaneous" line into your budget keeps the wheels from coming off before you even get to the first holiday break.
How to Build a Budget That Actually Works
A back-to-school budget works best when it's written down, category by category, before you start shopping. Start with the fixed costs you know about: registration fees, required supplies, and uniforms, to name a few. Then estimate your variable costs and assign a realistic dollar amount to each.
It can be helpful to open a dedicated checking account for seasonal spending. Fund it ahead of time by setting aside a small amount each paycheck through spring and summer,
and the money is there when you need it. When it's gone, you know you're done.
Worth Knowing: A rewards checking account can turn everyday back-to-school purchases into cash back over time. The rewards won't transform your budget, but the extra cash can really add up, especially if you're running a lot of purchases through your debit card. Our rewards checking options are worth a look before the season kicks off.
Some Tips for Sticking to Your Plan
Getting the budget down on paper is step one. Here are a few simple things to do before and during your shopping.
Check for hidden treasures.
Before buying anything, do a quick inventory of what you already have on hand. Last year's backpack might have another year in it. The box of colored pencils in the junk drawer will be just as colorful as a fresh box.
Get the kids involved.
Bringing your children into the budget conversation (at an age-appropriate level) makes back-to-school shopping feel like collaboration instead of conflict. Plus, kids who understand how budgets work tend to ask for less. Maybe that’s the real win!
Shop with a list.
Stores are very good at creating the feeling that you need more than you came for. A list makes impulse purchases easier to resist.
We won’t pretend that the back-to-school season doesn’t pack an emotional punch. You want your kids to feel confident and prepared, but at the same time, you’re also aware that your budget isn’t bottomless.
Setting a realistic spending plan doesn't mean you love your kids less. It means you’re setting them up for a great school year while protecting their financial future at the same time.
If you'd like help getting your seasonal spending sorted, financial coaching is free for Spero members. Give us a call to set up your meeting today.
WHAT THE DATA SHOWS
In 2024, TransUnion published a study comparing Gen Z consumers aged 22–24 against Millennials at the same age a decade earlier. Gen Z carries a debt-to-income ratio of 16%, compared to roughly 12% for Millennials at the same stage, a four-point gap that holds up even after controlling for economic conditions.
A big part of the explanation is income. Inflation-adjusted, today's 22–24-year-olds bring home an average of $45,493, roughly $6,000 less than Millennials earned at the same age ten years ago. When wages don't cover what things cost, credit fills the difference. It's been filling it at scale:
• 84% of Gen Z credit users in their early twenties had at least one credit card as of 2023, up from 61% of Millennials at the same age in 2013.
• Average balances reached $2,834, about 26% higher than what Millennials carried after adjusting for inflation.
Far from the frivolous spending older generations assume, these balances are coming from groceries, rent, car repairs — ordinary expenses that exceed the average paycheck. The debt is real, and it’s concerning. Thankfully, the path to getting on top of that debt is just as real.
THE INTEREST RATES ARE THE ACTUAL PROBLEM
Carrying a balance isn't the same as being in trouble. Carrying a balance at 25–29% interest is a different story.
The average credit card APR has hovered near record highs, and for younger borrowers without deep credit histories, the rates tend to sit at the higher end of that range. The balance doesn't just sit there. It grows. And that extra debt works against smart financial practices like saving, building credit, and getting ahead on rent. And the longer you make minimum payments, the more that growing balance works against you.
REAL PROGRESS STARTS WITH A LOWER RATE
One of the most effective things you can do with a high-interest balance is move it somewhere cheaper. Not to avoid it, but to
get more of your payment going toward the principal instead of disappearing into interest charges every month.
The mechanics are straightforward: apply for a lower-rate card, transfer the balance, and direct payments toward the principal rather than watching them be absorbed by interest charges. The key is having a payoff plan before you make the move. A lower rate helps, but it doesn't replace the discipline of paying it down.
Worth Knowing:
Spero’s Classic credit card is built for situations like this. It's a lower-rate option designed to help you pay down balances without the oppressive interest of most major credit cards.
FOUR WAYS TO GET OUT OF DEBT FASTER
While moving to a lower rate solves the immediate interest problem, the most important work is building habits that keep your balance moving in the right direction. Here are some of the most effective ways to start chipping away at credit card debt.
Pay more than the minimum.
Minimum payments are designed to keep you paying interest as long as possible. Even $25 or $50 above the minimum each month shortens the payoff timeline meaningfully.
Don't close the card after you pay it off.
It may seem strange, but closing an account can lower your credit score by reducing your available credit. Keep it open, use it occasionally, and pay it off to strengthen your credit score over time.
Watch utilization, not just balances.
Credit utilization is the percentage of your available credit you're using, and it matters a lot for your credit score. Keeping it under 30% is a good target. Under 10% is even better.
Build a small emergency fund before doubling down on debt.
Paying off debt aggressively without any savings means the first car repair or medical bill goes right back on the card. A cushion of $500 to $1,000 breaks that cycle.
THE DEBT GAP CAN BE CLOSED
It’s no secret that Gen Z is beginning financial life in harder conditions than any living generation faced at the same age, but that isn’t a permanent reality. Tackling debt doesn't call for drastic measures, just consistent ones: moving high-interest debt to a lower-rate card, paying more than the minimum, and keeping utilization in check.
If you're a Spero Financial member carrying high-rate debt, let’s talk. We're here to help you find a smarter way to carry it while you pay it down.