This Just In: Kids Are Expensive
I have three kids. They’re expensive. No wait . . . new tires are expensive. Kids are obscene. But don’t get me wrong, I love my kids and I wouldn’t trade them for anything in the world. That said, there’s always something to buy for them: baseball cleats, piano lessons, new clothes, a new toy, Happy Meals, etc. Then when they get older it becomes worse: My nine year-old wants a new iPhone (of course the answer to that was no, but I can see where this is headed).
According to the U.S. Department of Agriculture, it now costs just over $241,000.00 to raise one child from birth to age eighteen. Now I’m not 100% sure of the number’s accuracy, but even if it’s half that, it’s a LOT of money, especially when you consider that their number doesn’t even include college! Because it’s likely that you’re not raising the next tennis prodigy who will be raking in millions by age fifteen, here are eleven ideas on how to decrease that spend! Hey, every little dent helps, right?
1. Don’t be afraid to say no to their requests/demands (see my iPhone comment above). Hold your ground and remember who’s in charge.
2. Have kids subsidize what you buy them. Want a new iPhone, junior? Then pony up some cash for both the phone and the monthly bill. That should end it right there.
3. Teach kids about money and budgeting (better yet, learn together. Best yet, include FitFin in your budget planning!). Open up a savings account for them. Then model good behavior by putting a little money into it periodically, and encourage them to do the same when they get money for their birthdays, etc. Suggest that they save a certain percentage of what they get. Literally focus on that number. What I mean is that if they decide to save 10% of everything (or whatever number), really focus on that number with them. Then hope that the same habit transfers over into adulthood.
4. Next time they want fast food, suggest a simple picnic in the park. You’ll save lots of money and they’ll burn some calories.
5. Going shopping? Leave the kids at home with your spouse, or a trusted neighbor or friend. Think about how much money you spend when the kids are with you versus when by yourself. And don’t forget to use your FitFin shopping list (and stick to it!).
6. Tuck away money every month for college. If you’re not sure if the kids will go to college, then put it in a Roth IRA (if you qualify). If they go to college, you can withdraw the money without taxes or penalties to pay for education. If no school, then let the money grow for your retirement.
7. Allow them to participate in only one activity at a time. According to the American Express Spending and Savings Tracker, in 2012 it was estimated that Americans would spend $16 billion on children’s activities during the summer, at an average of $601 per child. Do you know what you spend on your kids’ activities, when you factor in registration fees, equipment, travel, snacks, etc.? Yes, activities are important, but at least make sure you’re aware of what their costing your wallet and your child in terms of lost sleep and education.
8. Look for fun things to do that are cheap or free. A simple Google search for “cheap and free things to do with kids” will give you literally hundreds of ideas for an inexpensive, but good time.
9. Teach your kids about the Joneses. We all know the Joneses—those neighbors who buy a new car every 18 months and go to Disney World every year. Let your kids know that life is not a competition of who can acquire the most stuff or go on the most trips, and that many times such luxuries are bought on credit.
10. Ask your kids for ideas on how to save the family money. If they come up with their own thoughts around it, they’ll have buy-in, which will help to form a unified team around this goal.
11. Give kids money-saving “jobs” around the house. Even at an early age, give children cost-savings tasks, like turning off lights left on around the house or turning off the water while brushing their teeth. This will give them a sense of pride that they’re doing their part to help.
Saving money on your kids won’t always be easy. Be sure to reward them once in a while (and even give in occasionally to their requests). Most of all, enjoy them, because they grow up too dang fast!