BACK-TO-SCHOOL TAX HOLIDAYS
Now, obviously, you want to make the most of your back-to-school money, and that starts with knowing everything you can about sales tax holidays in your state. Deadlines really matter, and it seems like every state has set up different tax holiday periods.
In many cases, these are set up as weekend events, but not always. Some may start on Friday and end on Saturday, so you’ve got to know exactly when your tax holiday starts and stops. In states with a sales tax, this could mean saving anywhere from 2-7% right off the bat.
Okay, so now you know when to shop, but it’s also important to understand just what will be tax-free in your state. Nerdwallet has a handy guide for dates and tax-free items by state.
Some states allow cities and other taxing districts to opt out of these tax-free holidays, so you have to check to make sure stores in your city or town are actually participating. If they’re not, you can always drive down the road to shop somewhere else.
But do you need to do any driving at all? You may be able to do all of your shopping online. Most states with sales tax holidays allow for tax-free online purchases, as long as the items are ordered and paid for during the holiday, even if they’re delivered later.
So if you don’t feel like fighting your way through thousands of other shoppers, check your local stores’ websites for tax-free items.
Of course, major online retailers like Amazon and Walmart also participate in state tax holidays, and they’ll automatically deduct sales taxes on eligible purchases, so you may want to check them out, too.
And if you haven’t bought a membership in one of those big warehouse stores yet, now might be the time to do it. A membership might pay for itself in the savings you can get with back-to-school sales, and of course, they’re all participating in sales tax holidays.
OTHER SAVINGS
Okay, now for some tips that apply even if you’re not shopping during a tax holiday.
First, you’ve got to determine how much you have to spend. That means, how much do you have to spend without using a credit card?
Then make a list of everything you have to buy, and your kids’ schools have probably given you lists of everything they’ll need for the entire year. If you can’t make all of those purchases with cash, divide the quantities in half or quarters and purchase only what you can afford now.
But what about the tax holiday, you say? “I’ll have to pay sales tax on the other items I buy later.” Well, that’s true, but does it make sense to save maybe 5% in sales tax now and then pay 20% or more in credit card interest on those items later? Of course not.
So purchase only what you can with cash during the holiday period and then start saving so you can make the rest of your school purchases with cash in the months ahead.
Okay, so you know how much you have to spend, and you’ve pared down your list of what you need to purchase. Now you just have to stick to that list. That won’t always be easy, but stay with the plan and don’t be an impulse shopper!
On today’s program, Rob also answers listener questions:
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