Q. "I'm expecting to pay for a class ring, a dance, an overnight trip and a yearbook—that's just the stuff I know about. I've had to shell out for damaged textbooks before, as well. What can I do to prepare for the deluge of fees?"
A. In an ideal world, you'd be sticking to a budget and have a slush fund (about three to six months' worth of overall living expenses) to tap for these payments, says Bill Losey, certified financial planner practitioner and certified retirement coach in Wilton, New York. If you're not already saving, there's no better time to start. Build your emergency stash now by putting away whatever you can.
Suppose your finances run dangerously low and you're in the midst of all the activities? "It's okay to tell kids no," says Janet E. Taylor, MD, a psychiatrist and member of the Family Circle Health Advisory Board. And don't feel guilty. "Maybe you can't buy the designer prom dress, or perhaps they'll have to carpool rather than hire a limo. But most children respond to limits and explanations. And it's never a bad idea to teach the value of a dollar." You can also assign older kids responsibility for some of their own extras. "I've told my sons that if they lose or damage their books, they are paying for them with their own funds," says Losey. "When they know it's 'their money' and not 'Dad's money' on the line, they're more careful."