Published in: Banks | Feb. 17, 2019
Are Your Kids Depleting Your Savings Account? 5 Tips to Make Your Money Go Further
By: Christy Bieber
Kids are expensive -- but you don’t have to live with a low account balance just because you have offspring. Find out here how to make your money go further.
Image source: Getty Images.
According to the most recent data from the U.S. Department of Agriculture, a middle-income married couple in 2015 would typically spend between $12,350 and $13,900 annually to raise a child. This adds up to a whopping $233,610 from birth to age 17. Lower income families are still expected to spend around $174,690 on child-rearing expenses until their kids reach the age of maturity, while high-income families typically spend around $372,210.
Whether you’re already a parent, or are thinking of becoming one, these numbers are scary. When you consider how costly things like diapers, daycare, and extracurricular activities can be, it’s no surprise that many parents struggle to afford everything their children need or even end up in debt due to child-related expenses.
Still, while you want to provide the best for your progeny, you don’t want your kids to bankrupt you. If you find your children are continually depleting your savings account, try these five tips to make your money go further.
1. Buy used whenever you can
Kids need a lot of stuff, but most of it doesn’t have to be purchased new unless there are safety issues. You shouldn’t buy things like cribs, car seats, or high chairs used because you won’t know about recalls and older products may not meet modern safety standards.
But, when it comes to clothes, toys, and sporting equipment, there’s little reason to buy brand new -- especially when kids outgrow things quickly.
Garage sales, consignment shops, and secondhand stores are great places to find tons of stuff your kids need. Just be sure to wash everything you buy carefully and give the items a careful once-over to make sure they’re in good condition.
2. Skip the unnecessary stuff
From the time your kids are babies, you’ll be inundated with marketing materials telling you all the things you need to buy. The reality is, babies don’t need most of that stuff. Older kids may not need tons of things that they see on commercials and store shelves either.
Before you buy yet another toy, or a baby wipe warmer or fancy kids-only tablet, think about whether the item will really make your life easier or your kids’ lives better. If it won’t, don’t bring it home.
If older children tend to want a lot of stuff, you could try implementing a one-in, one-out rule -- each time they get a new toy, you put one away for later or give one away. This is likely to make them choosier about which new toys or items they ask for and will help ensure you don’t amass a lot of clutter.
3. Limit extracurriculars and take advantage of free activities
Many kids are so overscheduled, and they don’t have time to just be children. Kids need time to play and use their imagination -- and they need to learn how to overcome boredom with their own creativity.
To avoid overscheduling your kids and spending a fortune on activities they may not get much out of, limit the activities to one at a time or only to things that they truly enjoy and are passionate about.
4. Skip the big blowout birthday parties
In the age of Instagram, far too many people turn their kids’ birthday parties into big gala events that cost a fortune. This is completely unnecessary and is likely to put a big hole in your budget for no reason.
Instead of hiring a petting zoo or spending a fortune to take all your kid’s friends to the amusement park, have a simple party at home in your backyard and just give the kids a chance to play and eat candy and pizza.
The point of the party is the people who attend anyway, not the amount of money you spend.
5. Help kids learn to budget
As your kids get older, they need to learn they can’t have everything they want because money doesn’t just grow on trees.
Help your kids learn to prioritize -- while also limiting your own spending -- by giving them an allowance and having them pay for their own clothing and entertainment out of it. Help them figure out how to budget the money so it lasts and let them decide on the tradeoffs that have to be made.
Having kids doesn’t have to mean going broke
While there are some things you can’t skimp on -- like a good car seat or a safe neighborhood for your kids -- there are plenty of ways that you can keep costs down while still giving your children a great upbringing. Try some of these tips to see if you can slash your kid budget and you should see your savings account balance start to recover quickly.
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