According to the latest Irish League of Credit Unions survey, many parents have little choice but to rely on borrowing money to pay for back-to-school expenses. But there is also a ray of hope; some families are now in a position to pay those expenses using their own savings. This is a positive development.
Regardless of whether one budgets or borrows, it is important families are informed and prepared to ensure they get the best options.
Following are some simple tips to help families prepare:
1. Set your money target – work out how much is needed to cover costs - according to the latest report, it can cost over €1,200 per child.
2. Review your income – regardless of whether one is employed or self-employed, they must know their financial bottom line especially their net take-home pay each month (plus any additional money received).
3. Identify all expenses – this includes all costs, including mortgage repayments / monthly rent. Insurance, groceries, travel, entertainment etc.
4. Set your timeline – if you plan to save €1,200 over the course of a full year this works out at €100 per month.
5. Stick to the plan – but be flexible. The best way of reaching a money goal is to build in flexibility. No month will ever be the same. Strive to save more than the target amount during months where cash is available as there will also be months where cash will be tight. Over time, it should all balance out.
Some parents have little choice but to use borrowings to pay for back to school costs, the following are some useful tips to help them borrow effectively.
1. Credit cards – make the maximum payment, not the minimum. This way, users have the greatest chance of paying the least amount in interest charges and fees – which can add a significant financial cost otherwise.
2. Short-term – longer term loans may offer the convenience of lower monthly repayments but they also cost much more in interest charges which increase the overall cost to the borrower.
3. Check the APR, not the rate – the Annual Percentage Rate is the absolute measure of the cost of money and the best measure of the true cost of borrowing.
4. Avoid late payment charges – those can really add up and make loan repayments crippling.
5. Say no to money lenders – some charge up to 200% interest rates which cost borrowers significantly more over time.
Great back-to-school loan offer
Beat the back-to-school budget blues with a low-cost back-to-school education loan. At just 7.9% / 8.21% APR, our loans are designed to help members borrow for less. To avail of this special offer, simply call into any one of our branches at Dublin Airport, Shannon Airport or at Cork Airport (check Cork opening hours) to discuss your options.
Remember, we lend to our members based on their ability to repay their loans (not on the old 3-times shares / savings formula). For further details or to APPLY TODAY, talk to a member of staff or simply contact us at firstname.lastname@example.org