Once you bring your baby home from the hospital, you’ll quickly find that a child is expensive. From clothes to diapers to food to childcare, it’s not cheap to raise a child these days. In fact, estimates show that the cost of raising a child tops out at over $233,000. With that in mind, it’s important to budget before your baby is even born. Here’s how to do it.
Budgeting Basics Still Apply
You may have heard that Europe’s childcare costs are higher, but it’s pricey to raise a child anywhere. That’s why you need to break out your basic budgeting skills and get to work. It’s important to anticipate child-related expenditures and budget them into your monthly spending. A simple spreadsheet is the easiest way to stay on track. A simple log of income and buying will help you balance your child’s needs with your pay check.
Financial Priorities: Retirement vs. College Savings
Most financial experts will tell you that it’s more important to save for your own retirement than your child’s college. That might not be a comfortable thing to consider, but most college students have access to loans and grants to get them through. The same cannot be said for retirement and you must be prepared for your later years by putting money away now, even if that means you can’t fund your child’s college education.
Practice Living on Less
One of the best ways to save on anything, including child-related expenses, is to live below your means. That means not moving to a bigger and newer house every time you get a raise and not buying your child the latest pair of pricey basketball shoes. Living on less enables you to save money for the future and teaches your child a valuable lesson about financial responsibility.
Anticipate Ongoing Changes to Expenses
While you can expect to spend some amount of money on your child each month, those expenses change. For example, your teen child is going to cost a lot more money in groceries than your toddler. However, you won’t need diapers once your child hits preschool and is potty trained. You’ll also need to take into account school fees for your kids as they get older. Anticipating these changes makes it easier to budget accordingly so that you aren’t coming up short at the end of the month.
When There Just Isn’t Enough
It’s no secret that raising kids is expensive, but there’s help out there if you find there isn’t enough. Public assistance programs can help you find affordable housing and provide you with enough food to feed your family. Other ways to make ends meet include finding a part-time job to supplement your income, cutting unnecessary costs, such as cable television or your morning Starbucks run. You might also consider shopping for clothes and other items at second-hand stores where you can save a lot of cash on stuff your kids need.