You have read those cost projections for raising children. MSN back in 2001 projected a cost of $249,180 (which would be much higher in today’s dollars) for a family with a $65,800 or greater income. The Baby Center tells us the cost of raising a child from baby to adulthood is $266,698. The Wall Street Journal estimated the cost at $222,360 last year.
While I am not one to dispute the research of such prestigious publications, I simply can’t believe that the average parent with the average baby one might encounter in an average grocery store or sporting event or church service is really going to spend a quarter of a million dollars raising that child. Something somewhere is flawed.
It has been several years since we raised our four children but I can assure you that Janice and I didn’t spend an extra million dollars to raise them and I want to further assure you that it is okay to bring babies into this world even if you aren’t sitting on a huge nest egg. So . . . whether you are just getting started or already have several children, these money saving tips will help you keep a rationale perspective on how to afford your baby.
Oh, and if you are getting ready to have your first child here is a newborn baby checklist that covers all the basics – and then some.
1. Have a budget.
You only have so much money, so a working budget is going to be your best friend. Because baby will require diapers, baby food, doctor’s visits and child care, you will need to cut back your current spending to keep your budget balanced. Whether it’s eating out less, forgoing a car purchase or simplifying your vacation, you and your spouse need to be on the same page.
2. Don’t assume the baby needs a bigger house.
The biggest single expenditure from these studies is normally housing. This includes all extra you might spend on housing, utilities, and home furnishings because of the baby. If you can afford it and would like a bigger house, go ahead and get one. But don’t think that Junior will grow up needing therapy if he has to sleep in tight quarters or share a room with a sibling. Janice and I had a big house before our children came along and we still live in the same house. Yes, some brothers shared a bedroom, but they never seriously damaged each other and are great friends today.
3. Try cloth diapers.
At around $15 each, cloth diapers sound pricey, but when compared to using 6-10 disposables every single day, you can recoup your cost in a couple of months. Cloth diapers with Velcro fasteners are much more user friendly than in the days when I used to fold and pin them around my babies. You can buy one-size-fits-all and also be environmentally responsible. Try the calculator on Diaper Pin to learn your savings. Also consider a program like the Amazon Mom program to save up to 30%.
4. Feed table scraps.
Yes, I really said that. Janice and I didn’t like the thought of putting the prepared green paste called “peas” into our baby’s mouth, so we bought a baby food grinder (still available for around $10) and fed our baby (within reason) the same food we ate. The little grinder requires no batteries and will grind vegetables, fruit and meat to a healthy consistency. Once we purchased our grinder, we never bought another jar of baby food. According to Wholesome Baby Food, our “table scraps” cost about $.03 per ounce compared to $.23 per ounce for store bought, an 87% savings.
5. Find clothing at yard sales.
Guess what? Babies and toddlers do not wear their clothing out – they outgrow them. You can therefore find baby clothes in pristine condition for nearly nothing at yard sales. While you are there, you can also find strollers, car seats and playpens . . . often in new condition.
6. Save on day care.
Yes, childcare can take a big bite from your budget, but check to see if your employer offers a Flexible Spending Account and figure your childcare tax credit. Other thoughts: Weigh your (or spouse’s) net income after deducting child care, travel expense to work, lunches out because of job, and clothing required for the job. One of you might be better off staying home with baby, especially if you could develop a home income stream.
7. If possible, breast feed.
A study on Kellymom indicates a savings of between $714 and $3,164 for one year of breastfeeding compared to formula.
8. Have proper life and disability insurance in place.
Ask yourself this question: “If something happens to my spouse, or me, how will the remaining spouse be able to care for our child and continue to pay the bills?” You probably spend more eating out in a month than life insurance and disability insurance premiums would cost, so you absolutely can’t afford to not have them.
9. Don’t select schooling you can’t afford.
If you can’t afford (meaning cash flow) a private grade school or high school, use a public school. If you can’t afford that prestigious college, let your child attend a community college and state college. No degree is worth ten or twenty years of debt payments. Read my post 10 tips on how to graduate from college debt free for ideas and encouragement.
10. Make retirement investing a higher priority than college savings.
You may be tempted to start a college fund right away, but don’t sacrifice your retirement investments. Junior has lots of options to cover college expenses. What alternatives to retirement do you have?
11. Make a will.
I realize that I promised ten tips, so consider this one as a bonus . . . a very important bonus. If both of you die without a will, the courts will decide who cares for your child. Is this what you want? Make a will so you can name the guardian that you want. Do it today.
Yes, your new addition will take a chunk out of your budget, but don’t get psyched out about these exorbitant claims of how much they cost. If you want to have children, I think you should have children. God is the giver of life and if he decides to give you a child, he will provide a way for you to care for the child.
One more thing: Whatever they cost, they are worth it.
Do you think $250,000 is a reasonable figure for extra money required to raise a child? Why or why not? Which of these tips is your favorite? What additional tips can you share?
This article was originally published on Personal Finance By The Book on August 9th, 2010.