With July’s record-breaking heat, you might still be dreaming of that white-sand beach vacation (or maybe you were lucky enough to actually have it). But now that August is here, it’s time to apply the aloe and get back to reality — or back to school.
For this month’s Money Moves, we’re taking you through the various tax-free holidays for school supplies. You should also keep an eye out for federal student loan updates this month, as payments are set to resume soon. We’ll also share tips on how to support black-owned businesses in your community for National Black Business Month.
Here are three big money moves to make in August.
1. Take advantage of the tax-free public holidays for the start of school
More than a dozen states host annual tax-free vacations to help parents and students prepare for the upcoming school year or semester.
If you live in one of these states, this means that certain school-related items are exempt from sales tax at retailers. That equates to a discount of around 4% to 7% depending on where you live. That might not sound like much at first, but it can add up.
Families of K-12 students expect to spend an average of $864 on back-to-school this year, according to the National Retail Federation. For college students, that figure is $1,199.
And with an inflation rate of 9.1%, every little saved helps.
The Federation of Tax Administrators (FTA) says the following 15 states have school holidays in August:
- Illinois (reduced sales tax rate)
- New Mexico
- South Carolina
- West Virginia
While the weekend of August 5 is the most popular tax holiday, each state sets its own rules that include the dates and spending caps, as well as items eligible for the tax break. Before you do business, check with the FTA for details about your state.
Note: Mississippi and Tennessee also have tax holidays, but they ended in mid to late July. Additionally, five states — Alaska, Delaware, Montana, New Hampshire, and Oregon — have no sales tax at all.
2. Monitor federal student loan updates like a hawk
The federal student loan grace period is nearing its August 31 expiration date. If you’re one of the nearly 40 million borrowers who have federal loans eligible for the ongoing payment pause, you might already know this.
The deadline for resuming payments has already been extended six times. Many are wondering if President Joe Biden will push the date again. Some experts think another extension is likely.
“The lack of communication with borrowers to date makes the extension of the payment pause very likely,” Robert Farrington, founder and CEO of The College Investor, recently told Money.
Still, that’s no excuse to switch off. You should be on the lookout for notices from your credit servicer – an indication that credit will resume soon. Or you may want to stay tuned to see if another expansion is officially announced.
Experts also expect Biden to unveil plans for student loan forgiveness along with a decision on forbearance. Many assumed this announcement would come in April, but Biden remained fairly closed. The president has said he will make a decision by the end of August, and has signaled he is in favor of forgiving $10,000 of state student debt per borrower — potentially with an income cap of between $125,000 and $150,000.
Nothing is certain for now. If you have federal student loan debt, it’s safest to assume that the payment pause will end in August and payments will resume shortly thereafter.
3. Discover and buy from Black-owned businesses
Any month is a good month to make targeted purchases from black-owned businesses. But as National Black Business Month, August is a particularly good month for it.
Due to structural inequalities in the US, including a lack of generational wealth and unequal access to capital, black-owned businesses are somewhat hard to come by.
According to the latest Census Bureau data, there were only about 135,000 black-owned businesses with more than one employee in 2019.
Given that the pandemic has disproportionately hit black businesses, it’s likely those numbers have fallen. A report by the US House of Representatives’ Small Business Committee, for example, found that in the early days of the pandemic, black business ownership fell by 41%.
Take some time this month to research black-owned businesses in your community and find ways to incorporate them into your regular shopping routine, even after August is over.
Here are some websites where black-owned businesses can be found.
- Black woman owned: a marketing service that connects you to businesses owned by black women through a directory and email list.
- From black: a partnership between the US Black Chambers and American Express. It acts as both a directory and a certification body for black-owned businesses.
- Support Black Owned: an online directory where you can search by business type and zip code.
- Official Black Wall Street: a listing service for black-owned businesses, e-commerce sites, and restaurants. Use the site to “find everything black owned. Any time.”
You can also search for Black Chambers of Commerce chapters near you. They work to list and promote businesses close to black people. Another strategy: Some nationwide e-commerce sites and apps allow you to filter your searches by Black property.
For example, Target has launched a “Black Beyond Measure” campaign, which allows you to browse their website for products from black businesses and vendors. Similarly, UberEats allows you to target your restaurant options by typing “Black Owned” in the search bar.
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