Posted on Monday 06 July 2020
Saving money is tough, no matter how you look at it. It’s even tougher when kids are in the mix. Suddenly, you have more mouths to feed, more bills to pay, and greater demands on what are considered monthly necessities. And while there’s no doubt that having kids is a phenomenal, life-changing experience, it’s also one of the most expensive transitions in life.
Recent projections put the overall cost of raising a child in the United States at more than $233,000. Things are not much different in Canada. In fact, we may be spending even more money on this than our neighbours across the border. On average, Canadian parents can expect to spend over $243,000 raising just one child. In these financially constrained times, this is doubly
Parents need to be able to spend money wisely and save in order to handle all of the expected (and emergency) costs that come with kids. Hospital visits, school trips, toys, clothes, food, and education are all in the picture. You may even need to move into a bigger place as your kid grows older. All these are anything but cheap.
Things are especially hard due to the pandemic. It's no wonder some are commuting to Peterborough to take advantage of the high job rate there. However, this may not be a sensible option for every family.
Instead, here are some real and practicable steps you can take to maintain good financial health. Here are some below:
If you have younger children in the home, buying second-hand items can be a great way to minimize the cost of your necessities. This is especially true for babies and toddlers. As they are constantly growing, what you purchase today may not fit a few months from now.
Instead of buying brand-new clothing, shop at local thrift stores and second-hand stores for great deals on pre-loved items. You’ll pay a fraction of the cost and free up more room in your monthly budget to contribute to your savings account. And as a bonus, you’ll also be decreasing waste and living more sustainably.
You could even extend this to accessories such as cribs, playpens, and strollers. You can also get kitchen accessories, furniture, wall decor, and games at these stores. Second-hand stores provide endless opportunities to tap into and save some money.
We’ve all been there. When we have to choose between buying a well-known brand name and its generic counterpart, we tend to opt for the brand name. More usually than not, this isn't smart. Many brand-name products and generic products offer the same quality. But at the end of the day, you end up paying a little more just for the name just to contribute to their marketing budget.
There’s no need to take out a one-month payday loan for everyday shopping. Instead, there are more opportunities to save simply by choosing the generic option.
Stocking up on paper towels, toilet paper, napkins, and cleaning products are easy generic go-tos, but there are also plenty of grocery staples that fit in here, too. Look out for generic options when shopping for:
It’s incredibly tempting to skip the food prep process and just order takeout, especially after a long day at work. This is certainly doable when you’re on your own, but it becomes even more significant to your finances when you have more mouths to feed.
One good way to get around that temptation is to plan out your meals in advance each week. If you already know what you’re eating each night, you’ll be far less likely to make that extra stop for takeout on the way home. Moreover, your grocery trips will become much more manageable since you’ll be shopping for specific and healthier ingredients.
Instilling a little bit of structure into your daily meals is a great way to get organized and intentional about the money you spend on food. You can even take it a step further and plan your meals around weekly grocery ads and coupons for a more targeted saving approach.
One of the biggest costs associated with raising a child is grappling with how to pay for their college education. Of course, student loans may be an option for your child 18 years down the line. However, if education costs are a budgeting concern, an RESP can help. A Registered Education Savings Plan (RESP) is a savings account that is designed to help parents pay for their child’s future education costs.
The great thing about an RESP is that anyone can set it up and chip in. Grandparents, aunts, uncles, or even family friends can create and contribute to an RESP. The government will match up to $7,200 of what you contribute, and all of your contributions are non-taxable. This means you can save a little bit of money during tax season in the process.
It can also be a good way to introduce your children to long-term money management, too. All of those $10 birthday cards from family members can easily turn into an investment in their future through RESP contributions!
If you aren’t already following a monthly budget, now is the time to start. There are plenty of budgeting apps that make staying on track easy and convenient, giving you a real-time snapshot of your spending and saving habits. Budgeting apps will also let you get granular with your spending. They offer specific budget amounts for different spending categories, like food, entertainment, gas, utilities, and more.
Pair your monthly budgeting with a little creativity by finding new ways to decrease your spending. Of course, no two households are the same, but here are some good places to start:
Use a clothesline (or a drying rack) to air-dry your clothes instead of turning on the dryer
Finally, one of the best tried and true methods of saving money as a parent comes from successfully managing the debt that you already have. These pre-existing debts could be costing you big-time in fees and interest rates.
If you have a mortgage, reach out to your bank and see if you are eligible for a refinance. If you have an auto loan, a little bit of research can help you see if another financial institution will offer a lower interest rate.
And if you have credit card debt piling up, you can utilize an interest-free promotion to transfer a balance, consolidate your credit card debt with a personal loan, or take out a short-term loan to pay off a few small balances in one swoop. There are several possibilities to fit a wide range of financial goals and capabilities, so keep an open mind and don’t be afraid to shop around.
Becoming a parent is a very expensive life transition. However, following the above money-saving tips can go a long way in boosting your financial health from one month to the next. Find the strategy that works best for you, and once you’ve mastered it, add another. The key to successfully saving money as a parent is keeping everything as manageable as possible to ensure that you are setting your financial health up for long-term success. It is also important for you to become doubly cautious, especially during this pandemic. You can check out these tips to protect yourself from Covid-19 scams.