December 15, 2019

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Opinion

Back to school, back to spending

Parents' budgets stretched thin as kids resume classes and extracurricular activities

TREVOR HAGAN / WINNIPEG FREE PRESS</p><p>Marie Martens, with her children Mason and Hannah, finds her budget squeezed when school starts.</p>

TREVOR HAGAN / WINNIPEG FREE PRESS

Marie Martens, with her children Mason and Hannah, finds her budget squeezed when school starts.

Hey there, time traveller!
This article was published 22/9/2018 (449 days ago), so information in it may no longer be current.

Marie and Stephen Martens are a married couple, as well as a couple of entrepreneurs. They often find managing finances a little trickier come early fall.

It’s not that business is slow at their company, Redwood Painting & Decorating. Rather, they often find themselves in hand-to-hand cash-flow combat with the deluge of costs associated with their children going back to school and all the other activities that start up in the fall.

"It is a bit of a challenge, and there is that balance that you are always trying to find between what will be most cost-effective and what benefits the kids will actually get," said Marie Martens, 42, whose five-year-old daughter Hannah is taking both tap dance and ballet.

"Those are the things we have to consider, especially given with our finances; being entrepreneurs, we never quite know what they’re going to be from one month to the next."

Call it a high-wire act, or an impressive feat of juggling many balls at once. No matter the acrobatic skill, many parents feel as if they are bending over backward to pay for the many costs of not just school, but hockey, dance, indoor soccer, swimming lessons, piano lessons and private tutoring.

You name the fall activity for kids, it’s likely that a parent somewhere is finding room in the household budget to pay fees for it at this time of year. While many can absorb the barrage of fees, the most recent data on insolvencies may point to some struggling more than others in Manitoba.

New statistics from the Office of the Superintendent of Bankruptcy reveal consumer insolvencies are up 26 per cent compared to the same quarter last year.

While the number may seem stunning, Winnipeg licensed insolvency trustee Gord Neudorf with MNP says the jump only represents a small number among Manitobans, roughly 200 people.

"It’s not 30 per cent of our population (that is insolvent)," he said. "The starkness of those headlines can throw people off, leading to them thinking the sky is, in fact, falling."

Still, MNP’s own debt survey shows that 50 per cent of Manitobans are not confident they can cover all their living and family expenses over the next 12 months. And certainly among those are fees and other outlays related to school and extracurricular activities.

"You want to give your kids those opportunities, and that certainly does add to the financial strain," he said. "The last thing any parent wants to do is deprive their children of those activities, and if they can’t pay for them, it’s directly affecting their children."

For most families, such as the Martens, the additional costs are more of a mental math strain — a little bit of high-level budget calculus — than true penny-pinching pain. But the struggle of juggling bills, school fees, saving for retirement, stashing some cash for the kids’ post-secondary aspirations and home repairs is indeed real for many families.

And it’s a point of contention not lost on the hundreds of school-parent councils around the province that run much of fundraising for schools.

"The schools themselves are strapped, so if families want to see things happen, like a new playground, they’re often looked to for funding," said Naomi Kruse, executive director of the Manitoba Association of Parent Councils.

"It’s understandable, but it creates this dynamic that parents within a school community are now cash cows."

Many councils are faced with striking a balance between raising the necessary funds and not pressuring parents to fundraise at all costs, so to speak.

"I’ve worked with parent councils where the expectation is that parents participate in fundraisers," Kruse said. But the community next door may have an entirely different economic situation where families do not have the economic wherewithal to raise significant sums.

"They might be able to raise a few hundred dollars," while a more affluent community can raise tens of thousands for its school, Kruse adds.

The costs associated with school — from supplies to the lunch programs, fields trips and fundraising — are certainly on the mind of the parent council at Lord Nelson School, of which Martens is a member.

"We do two fundraisers a year, but it’s time-consuming and can be quite costly for parents."

Consider just selling chocolates door-to-door, Martens adds.

"If a parent has three kids in the school, that’s 90 chocolate bars that need to be sold, and so it becomes difficult for parents to A) know enough people to sell that many chocolates, and B) just manage the chocolates and the money."

That’s why the council is mulling over an opt-out program for parents.

"We just thought a donation of maybe $50 and then you’re done," she said, adding they also understand even that may be challenging for some families.

"We’re trying to figure out how to make it work for everybody."

Kruse said that the majority of families can manage the school costs, but within the context of all other expenses, it’s easy to see how many parents feel overwhelmed.

"If you drop a couple of hundred bucks just to start off the school year for fees, supplies and clothes — and I’m really underestimating this number — and then another couple of hundred bucks to participate in some other community-based program, and then you’re asked to fundraise… you may be left asking ‘how is this going to happen?’"

For some, that may mean dipping into the home equity lines of credit, or worse, funding expenses on credit cards and running balances, said Scott Hannah, president of the Credit Counselling Society, which helps consumers facing debt problems.

"What we tell our clients is the best thing they can do it to try to get ahead of this," he said.

"So, while they’re working through it this year, they should be thinking about next year."

In other words, if your school costs and other activities end up costing about $2,000 in the fall, and you persistently find yourself scrambling to come up with the sum, you’re better off setting aside about $200 a month starting now for the next 12 months so you have that cash next September.

Yet, even for families with good incomes, setting aside money is hardly easy given all the other costs, including the mortgage, car payments and retirement.

As a result, Marie Martens said parents are often faced with cash-flow dilemmas.

"Should we put away money this month for retirement, or do we buy those sneakers they need?" she said.

"You’re saving for retirement, but you have to live for today, right?"

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