14 Ways to Get Your Finances to the Top of the Class

I may squeeze in a few more days by the pool before it closes, but my inbox is already filling with field trip sign-ups and ads for planners. There’s no denying it: Back-to-school season is here.

Learning doesn’t stop once you graduate, either. Let your kids’ new school year inspire you to tackle a few projects of your own — namely, making sure your family’s finances are as on-point as a freshly sharpened pencil. This financial “homework” guide can set you up for success.

Review the Basics

Students learn best when they have a strong educational foundation. Whether they’re reviewing the ABCs or memorizing the periodic table of elements, kids rely on certain building blocks to get their facts straight and prepare for the next lesson.

You may already have your financial foundation in place. If not, now is a great time to take action to feel more secure. 

1. Update your will

Your will is one of the most important documents you can have as a parent. If something should happen to you, you need to make sure there’s a plan to protect your children. Your will is the best legal document to set plans for how to handle your estate and name desired guardians for your kids.

If you don’t have a will: Write one! Working with an estate attorney is a great idea, especially if you have complex plans for how to handle your affairs. If time and money commitments feel daunting, don’t worry. You can make a legally binding will with Fabric in a few minutes, completely for free.

If you do have a will: It’s a good idea to review your will every so often. You might have new assets to mention, or you may want to adjust your plans, especially when it comes to your kids. Do you and your partner agree on a preferred guardian? If the guardian moves across the country or had surprise triplets, could that affect your preferences or their ability to step up if needed?

2. Check on your life insurance needs

Most families would benefit from the financial security a life insurance policy can offer. Make sure your life insurance policy is keeping up with your life. You want to have enough coverage to cover major debts (e.g., mortgage), future goals (e.g., college tuition) and match some current contributions (e.g., several years’ worth of your salary to go toward household needs).

If you don’t have life insurance: A good way to get started is estimate how much coverage you’re likely to need. From there, get a quote to start comparing policy options.

If your life insurance needs have changed: If you need extra coverage because you’ve had another baby and recalculated your overall plans, you might want to look into a supplemental policy. If you’ll need life insurance longer than you initially expected, this could be a good time to consider what term length you need, or if a whole life policy makes sense for your family.

Study Your Budget

Following a budget is an important strategy to avoid (most) financial surprises and stick to your goals. Or at least that’s the advice we all know we should be following. In the hubbub of work, kids, school forms and permission slips, chores and maybe sneaking in a workout or social life, filling out a detailed budget can end up crumpled in the bottom of your figurative backpack.

This year, no more “the dog ate my budget” excuses. Use these ideas to feel more on top of family finances.

3. Choose an app

Budgeting apps can suit different styles, whether you prefer to give every dollar a job or customize your own categories. Sync up your accounts with your partner through Fabric so you’re both looped in on where money is going. Some other popular budget apps include:

• Mint

• YNAB

• Simplifi

• EveryDollar

4. Review your calendar

Payments for your home or insurance may stay more or less the same. As your kids grow, though, your spending on their activities may change more widely. Add up what you spend on each kid’s sports or other activities, plus equipment. (This can also be a good time to gut-check that spending feels fair across kids.) Take note of any other one-off events (e.g., county fair, tickets to see Santa) to add to the budget.

5. Check credit card statements

If you’ve ever signed up for an online trial to get free shipping or binge a show, and then forgotten to cancel before the service charged you, we see you (and we’ve been there!). Just like you should occasionally shake the snack crumbs and old handouts out of your kid’s backpack, you should go through your credit statement to clear out recurring charges for services you don’t want.

6. Plan for next summer

You may have barely finished the last of the summer camp laundry, but this can be a good time to take stock. Did your kids try multiple camps? Which did they like best, and how much did it cost? Will a younger sibling be old enough for camp next year (or graduate from half-day to full-day)? Budgeting to save a little at a time for camp starting now can mean less stress at sign-up time.

Be Smart With Your Savings

While students are juggling a full courseload, adults are balancing various savings priorities that all demand dollars and attention. Here’s your cheat sheet to organize your savings.

7. Build a strong emergency fund

You need a budget in part because it helps inform what your emergency fund should be. Some sources recommend six to 12 months’ worth of income, but an alternative way of thinking about it is saving in terms of household expenses. If you’re spending $5,000 per month, you should aim for $30,000 to $60,000 in savings. Especially if inflation has changed your typical spending on staples like groceries, you might need to adjust your emergency fund target accordingly.

8. Automate wherever you can

Automatic savings transfers help you meet goals without having to remember to make time to save every month. Set automated college contributions as a budget “bill.” You can see how far your current savings may take you with a college savings calculator and aim to update your target monthly contribution if you’re not on track.

Set regular contributions to other savings or custodial accounts you use, too, like an UGMA for your kids.

9. Add short-term savings targets

In addition to building your emergency fund, you might prefer to earmark a separate savings item on your budget for an expense coming up in a few years or less. Maybe you suspect it’s time to replace Old Mostly Faithful, your beloved college clunker, or you’re planning a home renovation project. Saving a little starting now can help you feel ready when the time comes.

Get Full Credit

Using credit is a way of life for most of us. Credit cards can be a great way to build your credit score and even make use of rewards, but debt can also get out of hand quickly. 

10. Check your credit score

You’re legally entitled to a free credit check once a year from all three of the major credit bureaus: Equifax, Experian and TransUnion. But in these uncertain economic times, you may need more than an annual check-in. All three credit bureaus made a temporary change in 2020 to allow weekly free credit reports, and this program is currently extended until December 31, 2023. If your score takes a sudden drop or you see activity that doesn’t look right, you can dispute errors or fraud on your credit report and keep it from damaging your credit rating.

11. Review credit rewards

Some credit cards come with perks like cash back rewards or points to use toward airfare. This could be a good time to redeem rewards for cash or gift cards for holiday shopping, or see if there are travel deals that could come in handy.

12. Make credit a group project

Are you and your partner authorized users on each other’s credit cards? Do you have transparency into each other’s spending? Every couple and family has their own arrangement that works for them, but it’s good to get on the same page, especially if you’re getting back into a budgeting habit. If your kids are getting started using a debit or credit card, make a plan for how they’ll stay accountable with their spending, too.

Teach Kids to Give Back

You are your children’s first and most important teacher. Whatever you model becomes part of how they view money and the world. When you choose to donate some of your money, you’re not only supporting a meaningful cause, you’re shaping your children’s values.

13. Learn more about your favorite cause

While bills work great on a “set it and forget it” model, you might get more satisfaction out of your donations by giving them extra attention. Read about your favorite organization’s latest accomplishments to see what your gifts helped achieve. Or, take time to learn about an organization working toward another cause that speaks to you, and add it to your giving list.

14. Make a family giving plan

If your kids earn an allowance, you might encourage them to donate a portion. If you plan on doing any special volunteer or giving projects around the holidays, make sure you’ve allotted a place in your budget so your finances are ready to match your generosity.

Learning is a lifelong process. As you send kids back to school, the energy of a new school year can be the spark you need to make sure all your finances make the grade.