School Supplies, Tuition, and Beyond: Budgeting Tips With Annuity Income
September 11, 2025
It’s back-to-school season again — get ready to tap your phone to pay for new shoes, brand-new backpacks, tablets, and more. But with school supplies, bus passes, and extracurriculars costing more than ever before, parents are looking for creative ways to manage rising costs. Enter annuities.
It’s true: Annuities provide financial predictability and steady income to offset seasonal spikes. But they’re just one piece of the financial puzzle. When combined with life insurance and other fraternal benefits, annuities become part of a well-rounded portfolio that strengthens your long-term financial plan.
Read on for more about how you can use annuities to help pay for school expenses.
What Makes Annuities Useful for Budgeting School Costs?
First, some basics. An annuity is an insurance product that provides steady income. They’re often used in retirement or long-term planning. The key benefit of annuities is predictability — families can pre-plan against an annuity schedule exactly how much and when the payments will arrive.
Steady payments come in handy when school-related expenses start rolling in. According to data from TrustedCare, families spend $650 to $1,550 per student, per year on public school expenses like supplies, lunches, and transportation fees. When you add in extras like yearbooks, sports, tech, and field trips, the annual cost per student climbs to $1,200 to $3,000.
Keep in mind that private school expenses and college will cost significantly more. Thankfully, annuities can help with those, too.
How To Budget Back-to-School Costs With Annuity Income
Staying organized is essential. You can start by making a list of anticipated school-related expenses each year.
Next, research the best annuity product for you: fixed, variable, or fixed-indexed. Fixed annuities have a set interest rate and a predictable payout. Variable annuities are tied to the stock market — you can pick your favorite sub-account (stock, bonds, and so on) to match your risk tolerance. Fixed-indexed annuities, meanwhile, offer the best of both worlds and protect your original investment even if the market tanks.
Once you choose the best type for you, decide the frequency of the annuity payments: monthly, quarterly, semi-annually, or annually. To get a high-level view of different scenarios, divide yearly school costs by the number of payments.
When the annuity payouts arrive, you can spend the money all at once, or you can choose to invest part of it into a sinking fund. A sinking fund, similar to a savings account, can help you save for predictable future costs, like tuition or other school expenses.
Anytime you come into extra money or get your yearly bonus, you can think about preloading a school expense fund to get further ahead on future expenses.
Keep in mind, school costs might vary month to month. By planning ahead and knowing your future annuity payouts, you’ll be able to alleviate concerns and smooth out the impact of any unanticipated costs.
How Do Annuities Work Alongside Life Insurance for Family Stability?
Annuities provide income while you’re still living, while life insurance promises continuity in the event of loss. When combined, these tools offer powerful financial protection for your family.
It works like this: Seasonal expenses related to schooling can get covered now by the annuity, while larger financial obligations (like a mortgage or university tuition) are taken care of in the future by the life insurance policy if anything were to happen to you.
Let’s say Chris has set up both an annuity and life insurance to protect his daughter’s education long term. The annuity covers her middle school bills now without stressing the family’s budget. But thanks to life insurance, her dream of going to law school will never be in jeopardy — even if the unthinkable happens.
Make the Most of Annuity Income This School Year
Annuities help families plan smarter — not just for retirement, but for real-life, seasonal needs like school expenses. So this school year, take a closer look at your financial strategy. If you already have an annuity, or if you want to explore how one might fit into your financial picture, 1891 Financial Life is here to help.
At 1891 Financial Life, we specialize in providing tailored insurance solutions that cater to diverse needs. Our team is equipped to help you navigate these challenges with expertise and compassion. Contact us today for personalized assistance and to explore your options.
About 1891 Financial Life
Our culture is about looking out — for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of “The World’s Best Life Insurance Companies.”
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.