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It Costs $245k To Raise A Child? 18 Ways Modern Parents Overspend You Should Avoid

It Costs $245k To Raise A Child? 18 Ways Modern Parents Overspend You Should Avoid

Children are great: they’re your little bundles of joy. But raising kids can really add up — to around $245,000! That’s a serious amount of cash. So before you start planning vacations and buying books, give this list a read. Here are 18 great ways to save money on your kids without skimping on anything.

1. Breastfeed if you can.

Breastfeeding is generally considered to be better for babies, especially within the first six months. It’s easier for tiny tummies to digest breast milk rather than formula. However, that’s not the only reason you should consider breastfeeding. According to one cost breakdown, feeding your baby formula will run you over $1,700, while breastfeeding is, of course, free. That being said, some women have to buy pumps to help accommodate their busy schedules.

2. Buy baby necessities online.

Sometimes, sites like Amazon have better deals on baby essentials like diapers. Many also allow you to buy in bulk, so you don’t have to keep going to the store and buying more of the product.

3. Clip coupons.

Using coupons is an underrated tactic in saving money. Your local newspaper likely carries lots of coupons, especially on Sundays. Check online as well for coupons to places from the grocery store to drugstores to children’s clothing shops.

4. Vacation close to home.

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    Chances are, your child will not remember much about the vacations that you take him or her on during the first decade or so of life. Sure, there will be snippets of memory, but not much else. While your child is still very young, consider taking vacations close to home. It’s a shame to spend a ton of money on a plane ticket, accommodations, and entertainment to another country when camping in a neighboring state would provide just as much fun for your kid. Save the extravagant vacations for later.

    5. Buy used books.

    This goes for baby books as well as textbooks for that first semester of college. Secondhand books are often incredibly cheap and readily available online and at community centers such as libraries. For example, currently on Amazon the popular children’s book Guess How Much I Love You is available new for $7.55 or used for as little as $0.01. Yes, for one cent.

    6. Join community sports teams.

    Kids love playing sports, and should be encouraged to do so. However, many teams require sign up fees, as well as fees for uniforms, team photos, and more. Many community teams, however, are totally free and can be just as much fun.

    7. Save old books, clothes, and toys.

    I’m the youngest in my family, and with two older brothers, I got lots of Hot Wheels and action figures to play with as my siblings got older. I loved them, and this meant my parents didn’t have to spend as much on toys for me growing up, since they’d already bought them for my brothers. Saving your first child’s belongings (as long as they’re in good condition) will save you money with any more children that come along in the future.

    8. Build backyard entertainment.

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      Sandboxes are a ton of fun, and your child will probably love having one so close. Additionally, a good sprinkler setup is tons of fun in the summer, as is a small inflatable pool (which you can buy here for the low cost of $17). In a pinch, having a good backyard play area will save money on vacations and trips to costly entertainment parks. The Six Flags water parks cost up to $59.99 for general admission, with kids’ tickets being $39.99.

      9. Customize your child’s birthday parties yourself.

      My parents were awesome at this: my mom always made my cakes herself, and they would make things like treasure hunts, water balloon fights, and even a makeshift pirate plank walk over an inflatable pool one year. Before you spend potentially hundreds at a venue like Chuck E. Cheese’s, consider making your child’s birthday cheaper and more special by doing it yourself.

      10. Shop at secondhand or consignment stores.

      Often, secondhand or consignment stores have trendy clothing that’s in perfect condition with fractions of the prices if you were to buy the same items from the original seller. Plato’s Closet is one such secondhand store, with stores expanding all across the country.

      11. Sell your old stuff.

      If you’re done having kids and they’ve got a whole bunch of stuff laying around that they’re not using, try selling it. There are tons of websites and stores out there for selling books, clothes, and even furniture like cribs. You could even have a yard sale. Just put a couple of signs up around your neighborhood and dedicate half a Saturday to selling.

      12. Tutor when you can.

      If your child is having trouble learning something in school, help him or her out if you have the expertise and time. Tutors can cost anywhere from $15 to $75 an hour, so save some money by teaching your child yourself. Often, even if you’re a little rusty on 4th grade math or 7th grade biology, you’ll be able to pick it up again quickly in order to help out.

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      13. Have your kids pitch in.

      Little things add up. For example, car washes cost anywhere from $6 to $20 depending on your area and the level of wash. Maid services cost, on average, between $175 and $225. Adding these tasks to your children’s chore list (and helping out yourself) can save you some major bucks. If you’re looking to add some more incentive, try making it into a game or contest. Your children (and you) will be happier.

      14. Research your babysitters.

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        While it’s important that you feel confident that the person watching your child is competent and responsible, it’s also important to make sure you’re getting a good rate. On average, babysitters make around $10 an hour. I’ve worked as a babysitter for years, and when I first started, I worked for a family that was friends with my mom. Because I was young, and because I was a family friend, I made less money but was just as responsible as someone that family could have hired from the Internet. Ask around to see if any of your friends have responsible teenagers looking to make a few extra bucks.

        15. Carpool.

        Gasoline prices are, on average, $3.52 per gallon. That can really add up when you’re taking your kids to school, piano lessons, soccer practice, and everywhere else. Consider finding one or two other families who take their kids to the same school or community sports team and arrange a carpool. This way, everyone takes turns and you save time and money.

        16. Cook more.

        Eating out is great, and it’s an important part of teaching your children good manners and appropriate restaurant behavior. That being said, going grocery shopping saves you a ton of money on food costs. It’s also a valuable money and cooking lesson for your kids. Bring them into the kitchen to help out. Not only will this send them a good message, but it will also create some great memories.

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        17. Have family movie nights.

        The average cost of a movie ticket in the U.S. is $7.96. Add in extras like popcorn, candy, and drinks, and you’re looking at quite a hefty bill. Instead, gather the family in the living room for a night of rented or streamed entertainment. Even refreshments are cheaper when you make them at home.

        18. Buy books and toys rather than electronics.

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          In today’s technology-focused culture, children from babies to preteens are being given their parents’ electronics to play with. While this might seem like a good way to entertain your child while, perhaps, waiting for a table at a restaurant, it’s actually bad for them and more costly. Research has shown that the devices encourage passivity, and they also blur the lines for children as to what is and is not a toy. With iPads starting at $499, consider buying your child books and toys. They’re cheaper and better for their development.

          Featured photo credit: Kevin Dooley via flickr.com

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          Published on May 7, 2019

          How to Invest for Retirement (The Smart and Stress-Free Way)

          How to Invest for Retirement (The Smart and Stress-Free Way)

          When it comes to stocks, I bet you feel like you have no idea what you’re doing.

          Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

          Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

          You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

          Here’s how to invest for retirement the smart and stress-free way:

          1. Know Clearly Why You Invest

          Odds are you already know why should invest for retirement.

          But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

          • Will you spend more time with your family?
          • What does retirement mean to you?
          • Are you looking to launch that business you’ve been holding off for years?

          Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

          Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

          2. Figure out When to Invest

          “The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

          It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

          The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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          A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

          Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

          3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

          Investing your money well depends on your emotions.

          Why?

          Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

          Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

          Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

          Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

          4. Open a Reliable Retirement Account

          Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

          If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

          You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

          1. Vanguard
          2. TD Ameritrade
          3. Charles Schwab

          5. Challenge Yourself to Invest Consistently

          Committing to invest for retirement is hard, but continuing to do so is harder.

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          Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

          That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

          Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

          A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

          6. Consider Where to Invest Your Money

          The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

          Robo Advisors

          Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

          Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

          Bonds

          Think of bonds as “IOUs” to whomever you buy them from.

          Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

          Here are the different types of bond categories:[5]

          1. Treasury bonds
          2. Government bonds
          3. Corporate bonds
          4. Foreign bonds
          5. Mortgage-backed bonds
          6. Municipal bonds

          Mutual Funds

          Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

          One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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          Real Estate

          Yes, buying a home is an investment when done correctly.

          Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

          This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

          But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

          Savings Accounts

          Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

          7. Master Disincline to Dodge Short Success

          Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

          So how can you master delayed gratification?

          By building your discipline.

          Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

          Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

          8. Aggressively Invest on This One Investment

          I’ve mentioned several types of investments but haven’t covered the most important one.

          It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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          More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

          But, how can you invest yourself?

          Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

          Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

          But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

          Retire Happy with Excess Money

          The key to a secure financial future doesn’t only belong to financial experts.

          It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

          I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

          Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

          One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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          Featured photo credit: Matthew Bennett via unsplash.com

          Reference

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