Avoid these back-to-school budget busters

The back-to-school season resembles the agony and the ecstasy in many households.

Yes! The house is empty!

No! The checking account is empty!

In the face of declining state funding, the Public Assets Institute reports that schools are not only shifting the cost of basic supplies to families, but even asking for help with toiletries. Imagine being asked to pack toilet paper in your child's backpack on the first day of school! Unbelievable as it seems, the institute says it is happening in some districts.

However, you can minimize the agony of an empty checking account if you shop smart. Avoid making these common mistakes to keep money in your pocket instead of padding a retailer's bottom line.

Mistake #1: Shopping on a whim. On your weekly shopping trip to the grocery store, you see a sweet deal on crayons. You snag 10 boxes and save oodles of money, right? Not if your middle schooler doesn't have crayons on his class supply list. In most districts, teachers create their own lists. Some teachers might want colored pencils; others prefer markers. Keep a copy of your child's supply list in your purse or wallet so you will always know exactly what you need.

Mistake #2: Starting too late. In July, you may still be planning your summer getaway, but retailers are rolling out the best deals on back-to-school basics. Penny pencils, 10-cent folders and 50-cent crayons are yours for the taking--if you time your shopping right. By mid- to late August, the rock-bottom prices are gone and stores are counting on your last-minute desperation to lure you into buying overpriced school supplies.

Mistake #3: Buying too early. On the flip side, there is some benefit to waiting for purchases such as character backpacks and lunchboxes. While many retailers sell basic school supplies year round and aren't in a hurry to unload excess back-to-school inventory, backpacks and lunchboxes tend to be seasonal. If you can hold out until after the school year begins, you may be able to pick up these items on clearance. An added bonus is that when your first-grader gets to school and finds out Spider-Man is out and the Green Lantern is in, you won't have to listen to months of pleading and begging for a new lunchbox. If your child is desperate for a particular character, it might be best to buy early rather risk the item being out of stock before the clearance prices hit.

Mistake #4: Paying full price for clothes. Even if you missed the end-of-season sales last year, there are still plenty of opportunities for parents to save on back-to-school clothes. Start with the summer clearance sales that usually begin in late June and early July. Even northern states often experience warm weather well into the start of the school year. For cold-weather wear, hit the local consignment shops for gently used, trendy outfits at a fraction of the retail price. Don't forget to also look for online savings. Some retailers offer exclusive online sales and free shipping. Others may provide printable coupons that can be used in the store.

Mistake #5: Forgetting what's in your closet. Do you really need to buy a new pencil box if the one from last year works perfectly fine? The same can be said for backpacks, lunchboxes and clothes. Your child may want everything new, but it pays to inventory what you have on hand before running to the store. You may also be able to find items around the house that can be repurposed for back-to-school use. If backpacks are so last year for your teen, maybe the sturdy, brightly colored tote collecting dust in your closet will work instead.

Mistake #6: Not taking advantage of a tax holiday. In 2010, the National Retail Federation reported the average American family was expected to spend $606.40 on back-to-school supplies, shoes, clothes and electronics. Tack on state sales tax --which in some places is nearly 10 percent--and you could be paying almost $60 extra to the government. Wouldn't you rather keep that money in your saving account? Many states offer tax holidays for back-to-school shopping. According to Consumer Reports, 16 states offered tax-free shopping in 2010. Check with your state's taxing authority to see if there is a tax holiday in your state as well as what it covers.

Back-to-school shopping doesn't need to be painful. A little planning and some creative shopping are all it takes to save big. Then investigate some high APY savings accounts to sock away the extra cash for college … because that bill is going to be a doozy.