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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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          Maggie Heath

          Maggie is a passionate writer who blogs about communication and lifestyle on Lifehack.

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          Last Updated on September 2, 2020

          How to Set Financial Goals and Actually Meet Them

          How to Set Financial Goals and Actually Meet Them

          Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

          In this article, we will explore ways to set financial goals and actually meet them with ease.

          4 Steps to Setting Financial Goals

          Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

          1. Be Clear About the Objectives

          Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

          It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

          Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

          2. Keep Goals Realistic

          It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

          It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

          3. Account for Inflation

          Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

          Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

          For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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          4. Short Term Vs Long Term

          Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

          As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

          By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

          How to Achieve Your Financial Goals

          Whenever we talk about chasing any financial goal, it is usually a two-step process:

          • Ensuring healthy savings
          • Making smart investments

          You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

          Ensuring Healthy Savings

          Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

          This is the focal point from where you start your journey of achieving financial goals.

          1. Track Expenses

          The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

          Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

          If you’re not sure where to start when tracking expenses, this article may be able to help.

          2. Pay Yourself First

          Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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          Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

          The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

          Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

          3. Make a Plan and Vow to Stick With It

          Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

          Nowadays, several money management apps can help you do this automatically.

          At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

          Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

          You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

          4. Make Savings a Habit and Not a Goal

          In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

          Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

          • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
          • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
          • If you go shopping, always look out for coupons and see where can you get the best deal.

          The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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          5. Talk About It

          Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

          Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

          6. Maintain a Journal

          For some people, writing helps a great deal in making sure that they achieve what they plan.

          If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

          When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

          Making Smart Investments

          Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

          1. Consult a Financial Advisor

          Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

          Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

          2. Choose Your Investment Instrument Wisely

          Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

          Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

          As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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          3. Compounding Is the Eighth Wonder

          Einstein once remarked about compounding:

          “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

          Use compound interest when setting financial goals

            Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

            Start saving early so that time is on your side to help you bear the fruits of compounding.

            4. Measure, Measure, Measure

            All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

            If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

            Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

            The Bottom Line

            Managing your extra money to achieve your short and long-term financial goals

            and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

            More Tips on Financial Goals

            Featured photo credit: Micheile Henderson via unsplash.com

            Reference

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