July 21st, 2026
By Margaret Allen
PRESENTED BY Crowne Point Tax & Wealth Counsel
THIS WEEK
The Back-to-School Bill Just Got Serious
Families with K-12 students plan to spend an average of $858 on back-to-school gear this year — clothing, shoes, supplies, electronics — according to the National Retail Federation’s 2026 survey. Add college students to the ledger and that number jumps to $1,326 per student. Aggregate national spending clears $128 billion between the two.
Prices are the story underneath the totals. Seventy-eight percent of shoppers expect higher prices than last year, and 51% moved their shopping earlier specifically to get ahead of tariff-driven increases. Two-thirds of families had already started buying by early July, up from historical norms closer to one-third.
The trap in pulled-forward shopping is over-shopping. When the calendar cue is “buy something today” rather than “buy the list once,” the total drifts up 15–25% over the season even when the per-item price does not.
That is the version of a money mistake that is easy to make and easy to avoid: the season is long, the impulse is real, and the receipts accumulate quietly.
The good news is that the fix is behavioral, not budgetary. Households that pick a total cap before the season starts tend to spend close to that cap. Households that shop reactively tend to spend closer to the cap plus the seasonal drift.
Before the first store run, decide three things:
Set the total cap, not the item budget. Households that set a per-item ceiling still overspend the season. Households that set a household-wide dollar cap for the entire back-to-school run tend to hit it.
Buy the durable stuff first. Backpacks, calculators, and shoes are the categories where paying more upfront is usually cheaper by winter. Pencils, notebooks, folders — the commodity list — is where the sales tax holiday actually matters.
Let the kids see the number. NRF surveys consistently show that families where kids over 8 know the budget spend 15–20% less than families where the number is a parent secret. The lesson is cheaper than the tantrum.
The season is fixed. The bill is not. The families who plan the number before the list tend to spend less than the ones who plan the list before the number.
ALSO THIS WEEK
The Tax-Free Weekend Windfall Most Households Miss
Seventeen states hold back-to-school sales tax holidays in July and August 2026, and most households treat them as a coupon rather than a plan. The exemptions typically cover clothing, school supplies, and — in ten states — computers and electronics, with each state setting its own price caps.
The savings math is smaller than the headlines suggest. On a $150 backpack in a 6% sales tax state, the exemption saves $9. On a $500 laptop where the state exempts electronics, the savings jumps to $30. Real money, but not the primary reason to buy.
Where the holidays actually matter is in the price caps. Most states exempt clothing at or below $100 per item, some at $200. A $110 pair of shoes taxed at $6.60 in a 6% state versus $100 shoes taxed at $0 is a $16.60 delta — for one dollar over the cap. The threshold, not the tax rate, is the number to watch.
Tax holidays are a genuine perk in the states that hold them, but a $9 savings on a $150 item does not offset the $30 someone paid to shop on the busiest weekend of the year. Plan the weekend, or skip it entirely and shop the actual markdowns.
The move this week is simple: check your state’s exemption list, mark the dates, and decide which categories are actually worth waiting for. Everything else can happen on your own schedule.
QUICK HIT
The 529 Timing Trick Most Parents Miss
State tax deductions for 529 college savings plans have a December 31 deadline in most states, and every year the plans see a rush of contributions in the last week of December.
That is late. Every dollar contributed in July compounds five extra months before it hits the same year-end tax deduction. On a $10,000 contribution earning 6%, the difference is roughly $250 — for the same dollar, deducted the same year, but deployed earlier.
The federal gift-tax annual exclusion for 2026 is $19,000 per contributor, or $38,000 for a couple. The super-funding option lets a couple front-load five years of gifts — up to $190,000 — in a single year, treated as if made in equal installments over the next five years.
The fix is calendar-driven, not math-heavy: automate the contribution now, then let it compound while the school-year money is still going out the door.
THE BOTTOM LINE
Three Money Moves Before the First Bell
Back-to-school season is one of the few consumer moments that has a hard deadline built in, which makes it one of the rare times households can actually plan a spending event. Three moves usually beat one big one when the calendar is doing the enforcing.
First, set the number before the list. A household-wide dollar cap for the entire season is the single move most correlated with families staying under budget.
Second, time the tax-free window. If your state holds a back-to-school sales tax holiday, check the exemption list this week and route the qualifying purchases through it. If it does not, skip the strategy and shop the actual markdowns.
Third, fund the future. If the household budget can spare it, a July 529 contribution earns five extra months of compounding before December’s deadline arrives, and any state deduction is still available at year-end.
The theme repeats: the households that keep more of their money in a spending season tend to be the same ones that decided the number before the receipts started. Plan the total before you plan the list, and the season stops being an ambush.
Set the number. Time the window. Fund the future. That is how a $128 billion spending season stays yours.
That’s the week. See you next issue.
Margaret Allen
Editor-in-Chief
Smrtt Money
P.S. Tax season doesn't wait — and neither do the rules. The sooner you have a strategy in place, the more you keep. Book your free 30-minute session here.