Budget basics for parents
It depends on where you live, but it’s estimated that it can cost up to $250,000 in Canada and the United States1 and £230,000 in the UK2 to raise one child to the age of 18 – and that’s before they head off to college or university (a cost you may also be partially or wholly responsible for covering). In fact, if you live in the United States, you can find out almost exactly how much it’s going to cost you buy using Baby Centre’s Cost of Raising a Child Calculator.
These numbers include the cost of supplies, clothing, food, shelter and childcare. Worth every penny, of course, but the fact is that raising children is not an inexpensive endeavor.
That’s why it’s critical for parents to know some budget basics that can help you avoid sinking into debt during the child-rearing years. These nine tips from How Stuff Works Money may help you navigate these wonderfully rewarding – but definitely pricey – years:
- Track your expenses. It may seem obvious, but understanding what you’re spending your money on each month is the first step in getting your spending under control. You’ll be able to see where it may be possible to cut back on your spending and increase your savings.
- Determine needs versus wants. Once you’ve started tracking your expenses, it’s time to determine what your family needs and wants are. This will be different for every family. For example, are you comfortable shopping for clothes at thrift stores or will you only wear new? Do you absolutely need high speed Internet, or can you save some money by changing your service? Can you still eat a healthy diet but cut back on some frills by shopping at budget grocery stores or club stores? Prioritize your needs and wants, and determine what exactly your family can truly afford to spend your hard-earned money on.
- Plan and set goals. Again, this will be different for every family. Perhaps your goal is to eliminate debt and save more, or it might be to avoid digging into your savings, or maybe it’s to have an annual family vacation or to save for retirement and college. Once you’ve determined what your goals are, take a look at your budget and determine what it will take to reach them. Is it cutting back on your wants? Picking up extra shifts or taking on a second part-time job? Asking for a raise? Working more overtime?
- Plan your grocery shopping. Food is becoming more and more expensive, but of course it’s an absolute necessity. The budget-friendly way to shop is to check the weekly flyers for sales, plan your meals based on what’s on sale, and stick to your shopping list. Your family may also want to switch from being brand loyal, to loving the brand with the best price. Check out our article on good, cheap eats for tips and recipes to help you make healthy, inexpensive meals for your family.
- Research best prices. No matter what you’re purchasing, be it pasta or a new mattress set, do your homework and find the very best deal you can.
- Use coupons. Clip coupons from flyers and hunt for them online to ensure that you’re always getting the best possible deal on items you know your family uses. Check out sites like Save.ca in Canada, Coupons.com in the United States and Money Saving Expert in the UK to find and print out grocery store coupons.
- Be thrifty. Wearing hand-me-downs and clothing purchased at thrift stores is an incredible way to save money on children’s clothing, particularly when they’re at an age where they seem to be growing up and out of clothing on a monthly basis. Adults can also find amazing items at thrift stores, and finding a good tailor can make anything look like it was made for you. Borrowing or buying used is a good plan for other big-ticket items too.
- Revisit your budget regularly. Priorities change and income and expenses change, so after your first month living with your new budget, sit down and see how you did and what you may need to change. Do this every once in a while to make sure you’re staying on track.
- If they’re old enough, get your kids involved in budgeting. Make them part of your family budget meetings so you can find out what their needs, wants and priorities are. This will help you understand what’s important to them, and help them understand why sometimes the answer has to be “no.” If they receive an allowance, teach them how to create their own personal budget. If they’re approaching collage age, share this article that will give them tips on finding scholarships.
Navigating the child-rearing years can be a financial challenge, but remember that as a Foresters Financial member you have benefits and resources right at your fingertips that can help.
Everyday Money, our toll-free financial helpline, connects you to an accredited counsellor who can help answer your questions about your personal financial matters such as debt management and budgeting. You also have access to Legal Link, which allows you to consult with a local legal professional for help with a variety of issues including wills, estate planning, and home ownership all at a reduced cost. We also have a host of online tools and worksheets at your disposal to help you plan for tomorrow, today.
For more great tips that can help you keep more money in your pocket, check out our article on ten simple ways to save money.
414940B CAN/US (05/17)