Get Financially Fit for Back to School
By Amanda Gengler

(MONEY Magazine) – For parents of high school kids, the end of summer may bring a merciful end to tense discussions about weeknight curfews and the family car. But beware. Tussles over lunch money and school clothes are just beginning. So use back-to-school season to budget for school expenses, talk to your kids about money, and plan for the even bigger education costs ahead.

1 Negotiate the Budget

• Set shopping boundaries. Families plan to spend an average of $527 this season on clothes, supplies and tech, 20% more than last year, according to the National Retail Federation and BIGresearch. To keep your own tab in check, take care of the essentials first, then give your teen a budget for extras and stick to it. She can decide whether to blow money on one pair of designer jeans--or to buy three pairs of Levis.

• Let your kid lead. Ask your teen to create a list of his weekly expenses such as lunch, gas and entertainment, then decide how much you will contribute. Again, leave the spending decisions to your kid. Overloading on snacks every day means the weekend movie may have to wait.

2 Teach Money Management

• Kick off a saving habit. Want your kid to learn to save? Carrie Schwab Pomerantz, president of the Charles Schwab Foundation, suggests requiring a high school student to stash at least 10% of any income in a savings account. By the time she gets that first paycheck after college, saving should be second nature.

• Ease into plastic. A recent Schwab study confirmed that teens know plenty about spending money on debit and credit cards but little about maintaining a positive bank balance and adding up compound interest. Link a debit card to your teen's savings account as a training tool, and make sure he tracks his balance.

3 Check on Your College Plans

• Tune up your savings. As long as you have education on your mind, think about your college savings. Every year, as your child gets closer to college, you need to move some money out of stocks and into less risky investments. You're allowed to realign a 529 portfolio just once a year. But if you have an age-based 529 plan, the manager automatically makes this shift for you.

• Improve your chances of aid. A custodial account cuts into your teen's federal financial aid eligibility (and no longer gets good tax treatment). One option: Have your kid cash out, pay any taxes, and put the money into a student-owned 529 or Coverdell Education Savings Account (starting this year, neither will count against federal financial aid eligibility).

4 Tour Schools for Less

• Visit virtually. Ready to look at colleges? Narrow your kid's long wish list from home. You can get a glimpse of many schools online for free at or buy video tours of campuses at sites like ($15 a school) and ($4 a school).

• Let a trip do double duty. Watching a video is no substitute for visiting your top choices in person. To save on travel costs, plan to squeeze a few campus visits into next year's family vacations (or even business trips), preferably in the fall or spring, when undergrads are on campus. High school students can stay overnight in a dorm for free. That's one less teen in your hotel room, making it a bit more of a vacation.