Congratulations. Your wife pushed out a watermelon-sized living organism out of a hole the size of a grape. This show of superhero strength and agility officially marked the beginner level phase of parenthood.
As a savvy parent with eyes set firmly on achieving Jedi Master status, you’ve likely saved a ton of cash because of a well-thought-out and executed registry, while friends and family have been a terrific resource for learning the ins and outs of what to buy and what to leave on the showroom floor.
If you’ve played your cards right, you probably didn’t need to spend much on the baby’s first year on this crazy planet we call Earth. But, after that first birthday, the bills for your progeny start to add up. Exponentially.
Just in case you were wondering (you probably weren’t, but I’m going to toss this in for shock value, anyway): the cost of raising a human from the womb until that day when you’ve finally said, “enough” and kick them out of the house for good is about $245,000 in the U.S., according to the Department of Agriculture. That’s a 2013 figure, which means the this number is sure to go up due to inflation. For those too damn scared to do the math at home, allow me to add to your nightmare: you’ll be spending an average of $13,000 per year from now until your heir to the throne is ready to take over the world.
Before we even get started on the path to all of this budgetary brilliance, we’ve got to set the ground rules. If you haven’t already checked off a couple of the most important parts to the saving money puzzle, you’ll need to tackle this stuff first.
- Pay off that high-interest debt – if you’ve got some credit card debt, this is the first and only thing you should be working to eliminate. Do not let the big banks and credit industry suck you into this never-ending cycle of higher interest rates. The average U.S. household owes $15,000 in credit card debt. That’s an entire year’s worth of expenses for your kid … and when you slap the interest rate on top of that, it gets much, much worse.
- Save for retirement – resist the urge to take that hard-earned money and dump it into your child’s college fund before taking care of yourself. While student loans suck (I’m still paying off mine), at least they exist as an option for your children if and when they make the leap to higher education. However, there are no loans for parents hoping to retire, even though they don’t have enough money to actually retire. Don’t find yourself in a situation where you’re working after the age of 70 because you didn’t save enough in your 30s. Work with your financial planner to save as much as possible (hopefully at least 5-10% of your income) and set up that 401k at work or an IRA.
- Find some unconventional methods to save cashflow – Mark spelled out several things in his blog post here: Save Money in 2016.
Once you get those ground rules taken care of, it’s time to dive into some of the bigger ticket items.
This isn’t one of those lists of tips like you’d see on the TODAY Show. I’m not going to tell you that you can save $56,000 per year by skipping out on your daily $4.75 mocha fluffy latte with extra whip from Starbucks. We are here to enjoy life, so if that coffee is the only thing that gets you excited for the day, so be it. That said, we don’t have to live a life of gluttony, either. Let’s find some common ground where we can make some simple tweaks to save on a few bucks … at least until the kids are finally old enough that we can force them to find a paper route.
Side note: do paper routes even exist anymore?
Another side note: I’d love to catch one of those silly budget-pounders that always go on TV to rail on your Starbucks habit actually in line at a Starbucks themselves.
Anyway. Here are eight tips to finding some wiggle room in your finances and after baby budget to help afford for that kid who’s eventually going to eat you out of house and home.
1) Make your own food – it’s easy to get into a regular routine of culinary avoidance; opting instead to order the latest meal online through Seamless or heading to the closest fast food joint for a quick dinner. Resist the urge. Make a contract with yourself that you’ll cook dinner at least X amount of times during the week. If you fulfill that arrangement, then splurge a bit with that takeout order, but only until you reach that predetermined number of home-cooked meals.
Related: we have several recipes you can craft in our FREE eBook, which you can download HERE.
2) Make Your Own Baby Food – The $23 Billion baby industry (yes … that is a “B” for BILLIONS) would have you believe that you should run out to the store and buy their ultra fantastic and pre-made baby food that’s conveniently-packaged in their BPA-free pouches. But much like the savings you’d realize when you start cooking at home a little more often, you’ll see similar benefits from making your baby’s food. It doesn’t take much effort to mash up some sweet potatoes, bananas or apples, package them in small containers and freeze some of the extra for later.
3) Call your insurance company – things like breast pumps may be covered under the Affordable Care Act (aka, Obamacare). You may be open to an entire host of benefits under your current insurance plan. It’s safe to say that they won’t be going out their way to tell you about those savings, so make the call yourself and inquire about benefits for parents and your children.
4) Check with the friends and family for babysitting – we’ve talked about the importance of establishing and keeping a regular date night with your loved one – and even provided some ideas for you. In order to do that, you need a sitter. Apparently, babysitting is big business now, too. These millennials are driving the price to almost $15-20 per hour for watching your offspring. If you are fortunate enough to live close to loved ones and haven’t totally fucked that relationship up just yet, then lean on them for the occasional break from reality to enjoy a night as a couple. Just a couple. BONUS: If you have multiple kids, and one child is old enough, and trusted enough, to watch the other … boom … built-in babysitter.
5) Daycare is expensive – Americans are spending an average of almost $12,000 per year on daycare; and if you live in a big city like New York or Los Angeles, you could be paying almost double or triple that number. There’s not a whole lot you can do here if you have a young child at home and both parents work and family/friends are not an option to watch the kid during the day until they get to school age. But, you can at least grab a tax break as a result of all that damn money you are pouring into the daycare. You can see a tax credit of up to 35-percent for childcare services like daycares, babysitters, and even summer camps.
6) Apps for sharing photos – Look to apps like Shutterfly to create shared accounts where family and friends can access the pictures of the kids. It’ll help save money from the constant need to print stuff out and ship. On the flip side, these apps typically have options to create pretty awesome (and affordable) gifts like mugs and photo albums – perfect for holiday gifts (who wouldn’t want a Father’s Day mug with a pic of the grand kids on it that reads “No. 1 Grandpa”). BONUS: It’ll save room on your memory from your smartphone.
7) Look into college savings plans – Once you’ve got your own debt paid down and your retirement savings in order, you may have a bit of flexibility to play around with regarding the future education of your kids. The average cost of in-state public tuition and fees at a four-year university now sits around $10,000 per year – this does not take into consideration the expense of room and board and books. It’s even more for private and out-of-state schools. You can help put a dent in all of that early on by investing in a 529 Savings Plan, which work similar to a 401k and are not federally taxed when your child finally gets to utilize the funds for college.
8) Stay healthy – medical expenses in this country are pretty crazy, and most are avoidable if peeps would get up, move more and eat a better nutrient-rich diet. We aren’t looking for John Cena level of physique here, peeps. But if you follow our posts and recommendations about following a decent diet and getting in some movement, you’ll avoid unwanted trips to the doctor and probably save quite a bit of cash flow per year.
Related: Use the 30 days worth of workouts in our FREE eBook HERE.
Small tweaks to the way you approach the spending can help pay huge dividends over time. That’s the key to victory. And see? You get to keep that overpriced sugary milkshake from Starbucks.
What other tips can you share for parents looking to save a few extra bucks? Write us in the comments below and don’t be afraid to hit us up on Facebook to chime in on the conversation.