The cost of raising a child is estimated to be a staggering $233,610, according to the Department of Agriculture. Believe it or not, that figure only represents the cost of raising a child to age 17. It doesn’t include college tuition or related college expenses, a number that could be well into the six-figures if tuition continues to rise at the current pace. Freedom Debt Relief has a few financial tips to help parents manage the steep cost of raising children.
Buy a house within your budget
Housing costs account for a large portion of the cost of raising a child. It makes sense. You’ll need more space to accommodate the increased number of people in your family. As you’re shopping for the best house to for your family, it’s important that you don’t buy too much house. Freedom Debt Relief suggests keeping housing costs below 30% of the household budget can keep families from struggling to make mortgage and other monthly payments. Don’t forget that housing costs include mortgage, property taxes, and insurance.
Work to minimize food costs
The USDA estimates it can cost almost $1,300 each month to feed a family of four. With some effort, you can limit the amount you spend on food, especially if you prepare the majority of your meals at home rather than eating out. Meal planning, shopping with a list, couponing, and buying things on sale are a few strategies Freedom Debt Relief recommends families should use to reduce food costs. If families can cut a few hundred bucks from their grocery budget, the cost of living becomes more affordable.
Shop around for child care options
While the bulk of the child care expense occurs in early childhood, reducing this cost can allow families to continue to save for emergencies, college, and retirement. Saving on childcare can be tough, but looking at alternatives to full-time daycare can allow families to cut back in this area. Sharing a nanny or babysitter or using daycare part-time can decrease your overall childcare cost.
Avoid relying on credit cards to make ends meet
Some families may be tempted to use credit cards to pay for some expenses – like groceries or day care for a month – but making a habit of using credit cards can lead to debt trouble. It starts out as using a credit card here and there, but that can easily turn into an every month thing, and result in a massive amount of credit card debt. Freedom Debt Relief suggests that families avoid using credit cards to make ends meet and instead focus on keeping their expenses within what the family can afford.
Use a budget
Stay on top of all the family’s expenses with a household budget. Creating a solid plan for your spending each month can help you spot where your income may fall short and help you prepare for unexpected expenses. Along with your regular monthly expenses, Freedom Debt Relief recommends making sure your budget also includes the essential savings – emergency fund, college fund, and retirement. Families have to get good at making sure they can meet today’s expenses and make a contribution toward future security.
Managing the cost of raising a child can be difficult, but stay on top of the costs. One of the best things you can do is continually plan and look for ways to save money on the entire family’s expenses.