Four steps to easing back-to-school financial anxiety

The back-to-school season is a time of excitement and new beginnings, but also significant expenses for many families. From essential school supplies to the growing list of extracurricular activities like sports, clubs and fall outings, costs can quickly add up. While these experiences create cherished memories, they often bring a hefty price tag that can lead to financial anxiety for working parents striving to balance these immediate expenses with other near-term and long-term financial goals.

For many working parents, the back-to-school season represents a delicate balancing act between providing for their children's immediate needs and ensuring their family's financial stability for the future. The pressure to manage these competing demands can lead to stress and anxiety, not just for parents but their children as well, with one of our surveys showing that financial anxiety is on the rise among teens.

This is where employers have a unique and vital role to play with the assistance of their benefits adviser. By providing resources and benefits that support financial wellness, employers can help working families navigate the back-to-school season with greater financial confidence. Not only can this support alleviate immediate financial stress, but it also can empower parents to use this time as a teachable moment to instill important financial lessons in their children. 

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This annual rite represents a perfect storm of financial obligations for families. According to recent surveys, the average American family spends hundreds of dollars on school supplies alone, which are expected to total roughly $586 per student this year. That number can skyrocket when factoring in clothing, new technology, sports equipment and extracurricular activities. For parents with multiple children, the financial strain can be even more pronounced.

These expenses can lead to short-term financial stress, which, if not managed properly, can have long-term consequences. Parents may find themselves dipping into savings, using credit cards, or postponing important financial goals such as retirement savings or college funds. The result is a cycle of financial anxiety that can persist well beyond the start of the school year, particularly as the holiday season approaches.

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Employers are in a powerful position to help alleviate financial stress associated with back-to-school season. By offering targeted benefits and resources, they can support their employees in creating and maintaining a solid financial plan that balances immediate needs with long-term goals. Here's how:

1. Encourage proactive financial planning: Employers can guide employees to take a proactive approach to their finances by offering financial wellness programs. These programs can provide education on budgeting, saving and managing debt, helping employees plan for the back-to-school season and other seasonal expenses well in advance. Workshops, webinars or one-on-one financial counseling sessions can be particularly effective in helping parents understand how to allocate their resources efficiently and avoid unnecessary stress.

2. Offer flexible spending accounts (FSAs) for dependent care: FSAs for dependent care are a valuable benefit that allows employees to set aside pretax dollars to pay for eligible expenses related to their children's care. This includes costs for daycare, after-school programs and even some extracurricular activities. By utilizing an FSA, parents can reduce their taxable income while covering essential expenses, making it easier to manage the financial demands of the back-to-school season.

3. Provide assistance programs: Education is a significant expense, not just for children but also for parents who may be pursuing additional qualifications or certifications. Employers can offer tuition assistance programs that help cover the cost of continuing education for both employees and their dependents. Employers might also offer personalized financial coaching sessions through employee assistance programs (EAPs) that tailor advice on managing debt, planning for retirement or saving for significant life events. 
4. Promote family financial wellness tools: Many employers offer access to financial wellness tools and resources that can be particularly beneficial for working parents and families. These tools can include comprehensive financial wellness platforms that provide access to interactive budgeting apps, savings calculators and investment education resources. Such an approach helps families track expenses and savings goals while creating a collaborative approach to managing money. 

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The financial challenges of back-to-school season also present a unique opportunity for parents to teach their children about money management. Our research also shows that 60% of Gen Z teens experience financial stress on a daily or weekly basis and 75% want more personal finance education. 

There's a growing need for parents to engage their children in regular conversations about saving, budgeting and making smart financial choices. Employers can support this by providing educational resources that parents can share with their children. This will help demystify personal finance and build financial literacy from a young age with financial literacy games, videos and online courses tailored toward their age group.

The back-to-school season is just the beginning of a busy and often costly time of year for families. With the holiday season on the horizon, it's essential for parents to feel confident in their financial plans. Employers have the opportunity to play a crucial role in helping their employees navigate these challenges by offering benefits and resources that promote financial wellness. By doing so, they can ensure that their employees are not only better prepared for the school year ahead but also equipped to meet their long-term financial goals, while contributing to a more positive and productive workplace.