Beating Broke

Personal Finance from the Broke Perspective

Raising a Child Does Not Cost as Much as the USDA Estimates

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According to the USDA’s 2010 report, raising a child costs at least $220,000.  This cost is the average cost a middle-class family pays for shelter, food, health care, clothing, transportation, child care, education and other expenses.  They further break down the average cost per child per year as $11,800 to $13,880.  Yikes!  If you are on the fence about having kids, this report will certainly sway you in the direction of remaining childless.

However, as a mom to three kids, I can attest (as many other parents including Beating Broke can), that it doesn’t have to be this way.    My husband and I have three kids, which, according to the report, should run us a minimum of $35,400 a year, not including our other expenses.  My husband is just completing his Ph.D. and starting his career.  While we count on him being able to make a large salary in the future, right now between his job and my part-time work from home, we are making a little less than $40,000.  We are most definitely not spending $35,400 a year on our kids.  Here is how we cut corners:

–Shop for clothes at garage sales.  Babies and little kids don’t really care about their clothes; you can find fashionable, barely worn clothing at garage sales for less than $1 per piece or outfit.  Save money this way.  I know it is tempting to buy those adorable, brand new baby clothes, but babies outgrow outfits in weeks.  Let someone else spend their money buying those clothes so you can snatch them up for pennies at a garage sale.  If you don’t go to garage sales, check out Craigslist or eBay.

SAM SAJAN THOMAS–Breastfeed if possible.  Not every woman is able or willing to breastfeed, but if you are, breastfeeding can save nearly $1,000 that would have to be spent on formula for the first year of the child’s life.

–Use cloth diapers.  Cloth diapers do require a large financial investment upfront, but they will last for the two to three years your child is in diapers, and they may even last for use by your next child.  If cloth diapers make you squeamish, make sure to never pay retail for disposable diapers.  By finding deals and using coupons, you should be able to reduce your diaper cost significantly.

–Accept all hand-me-downs.  If you are the lucky recipient of hand-me-downs, please take them.  Honestly, for a newborn, the only thing you need to buy brand new is a crib mattress and a car seat, for safety reasons.  Everything else such as strollers, toys, cribs, clothes, etc. can be given as a hand-me-down or bought second hand.

There are some costs that you can’t save money on such as day care and health care.  In all the other areas, there are ways to cut corners.  Get in the practice of cutting corners when children are small and save the difference.  Forgo the brand new outfits and large ticket items like a crib and instead go secondhand and save the difference.  Bigger expenses loom ahead such as college.  As Beating Broke stated in an earlier post, Stop Adding Up the Cost of Raising Children.  It is possible to raise them for significantly less than the government suggests.

What are your suggestions for saving money when raising children?

photo credit: Sukanto Debnath

How We Plan to Help Our Kids with College

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How We Plan to Help Our Kids with College

My husband and I have been on a tight budget for most of our married life. Luckily, one of us has always worked at a college, so we planned to send our kids to college where ever we worked so that the kids would get a tuition discount. Since our budget was so tight, we didn’t have the money to save for college (we still drive an 18-year-old vehicle!), so this plan worked perfectly. . .until it didn’t. My husband couldn’t pass up an excellent job opportunity last year—our oldest’s senior year in high school—so he left his job at the university. While staying at his old job for the tuition discount was tempting, the new job offered a better position, more money, and more opportunities for advancement. However, we then had to work out how we plan to help our kids with college.

Since we had zero saved, we knew we’d have to take a non-traditional track to get our kids through college.

How We Plan to Help Our Kids with College

We had our kids in our mid-to-late 30s, so we are focused on retirement savings now that my husband has a better job. Still, we plan to help our kids with college as we can. Here is the plan. (We have one in college and two more who will be in college in the next four to five years.)

Pay for Community College

Our oldest currently attends a community college. He received a scholarship that pays half of his tuition. We cover the other half.

Likewise, we homeschool our younger two, so we plan to have them take dual credit classes at our local community college when they’re in high school. We will pay for those classes.

Pay for Some Living Expenses

Our oldest lives with a family relative out-of-state while attending community college. We pay for all of his groceries every month. We also pay for any medicine he needs, haircuts, and his college books.

He does not currently have a car, but if he gets one, he will be responsible for the gas and car insurance. (We’re hoping he waits as long as possible to get a car so he doesn’t have any added expenses.)

Give Them a Set Amount

When our oldest transfers from the community college to a four-year university, we have told him we have a set amount we can contribute to his education. He knows what that amount is. To pay the difference, he will need to take out loans and/or get a job. We’re hoping he chooses the most economical option, so he doesn’t saddle himself with student loans.

When our younger two go to college, we will also let them know the set amount we can pay each year.

Encourage Applying for Scholarships

We have encouraged all of our children to apply for college scholarships. The more scholarship money they can earn, the less they will hopefully have to pay in student loans.

Final Thoughts

College is costly. Unfortunately, our plan to get 50 percent off tuition at the university my husband was employed did not work because he left the job. While that was unexpected, we have found ways to help our kids pay for college.

Read More

Beware These Financial Pitfalls When Choosing a College,

How We’re Helping Our Teen Pay for College,

Help Your College Student by Adding Them as an Authorized User to Your Credit Card,

 

Do Your Kids Do Chores?

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I recently saw an article on Yahoo! that said only 28% of today’s kids do chores versus 82% of kids from our generation.

I don’t know about you, but I had chores when I was growing up.  I took care of our pets, washed the dishes, and helped clean the house ALL day on Saturdays.  (I still have nightmares about cleaning each and every slat on our huge stereo.)

My kids are definitely part of the 28% of today’s kids who have chores.  My 10 year old is responsible for doing three chores a day including things like vacuuming the living room or his bedroom, emptying the dishwasher, and cleaning the bathroom.  My younger kids are 6 and 5, and they’re responsible for two chores a day including picking up their toys, cleaning their rooms, putting away clean clothes, and feeding the cat.

Kids do ChoresWe have our kids do chores because we want them to learn to be self-sufficient, and we want them to understand that there are not always people there to do things for them.  I plan to work with my oldest this summer to teach him how to prepare some basic meals.

Repercussions for Kids Who Don’t Do Chores

But what about the other 72% of kids who don’t do chores?

One of my friends had surgery recently, and she had trouble getting up to prepare her food.  Her boys are 17 and 13, but neither of them could make her anything while her husband was at work because they hadn’t yet learned to cook.  Her son had to go to the store to buy some frozen meals for her.

And herein lies the problem.  “Too often children leave home for college unable to look after themselves adequately.  They have to rely on junk food or expensive ready-made meals” (Yahoo!).

If your children do not have the most basic of skills to care for themselves, when they’re adults their lack of skills can cost them a small fortune.  You likely know of people who don’t know how to cook, so instead they fill their grocery carts with frozen meals or go out to eat every night.

Even worse, your adult child may be so cozy at home that he never leaves!

Parents Sacrifice Now So Greater Rewards Can Come Later

My guess is that many parents don’t give their children chores because training them to do chores properly takes time, sometimes a few weeks to a few months.  It can be a painful process.

Gina Gardiner, author of the Yahoo! article, states, “Many parents I believe are suffering from the ‘It’s quicker, easier and less hassle to do it yourself syndrome.’ Of course, it takes time to teach children how to do chores and a real commitment to motivate children to do the chores and understand why it’s important—but it is well worth the investment.”

I know that is why I have neglected to teach my oldest to cook and why I’m waiting to do so until the summer when we’ll have more time.  Teaching him to cook will require patience on my end (and perhaps his, too), but it will be well worth the time and effort.

Do you require your children to do chores?  If you don’t, why not?