If you are a parent, spending on children is something you cannot get out of. When they come into your lives, your priorities will change and everything will almost always be about them. You work and put in overtime so you can provide for their needs and even your house and car choices makes a complete 180 just to make sure that you get to meet their needs first.
There are no set rules on what age you need to get married but it is not a secret that there are financial complications of having children at an old age. But still, it does not stop people from marrying the love of their lives and building a family with them. As much as it is exciting for would-be parents when faced with the idea of having kids, their finances will also be affected regardless at what age they have them.
Having little ones running around the house is a turning point in any couple’s lives and a lot of changes usually follows this stage in their lives.If you already have children at home, you will notice that you are taking steps to make sure the house is safe for them by childproofing some accident-prone areas.
You might also find that you are trading sport cars and small-sized sedans perfect for city driving to a much bigger wagon to be able to fit the whole family comfortably during road trips. Your choices on clothes might also change as you look for the most comfortable ones and the easiest to clean as you run around the house trying to clean up after your kids.
Statista.com shares that the birth rate in the US is at 12.5 per 1,000 of the population. That may be a small percentage but if you multiply that with the population, that balloons into an even bigger number. This means that there are a lot of families dealing with kids and changes in their finances that it makes sense to look at what can possibly change in their budget to prepare.
How to approach spending
Here are a few things that you might want to look at and study carefully to be able to assess how you will approach spending on children. This can greatly help you manage your expectations and even form your future financial actions.
- Education. This is one of the things that you can help your children achieve to get a better chance at life. Although most of the character formation starts at home with you as their role models, they might want to pursue higher education to polish their skills or learn more about their craft. Although understanding the difference between federal and private student loans, one of the best things you can do is saving for a college fund early on. This protects your children from having to take out student loans and spend most of their early working years repaying that debt. It also protects you from having to take out cosigned private student loans which can jeopardize your retirement plans.
- Vacations. Spending on children especially when it comes to taking vacations is a tricky expense. On one side, you want to have as much memories with your children as possible but as adults int the house, you worry about the cost. The idea here is striking a good balance between cost and experience. You do not have to take four or five trips a year just so you can tell everyone where you went. If your kids are still small, you do not have to go to expensive vacations because chances are they would not even remember the trip. You bring them when they are a little bigger and can appreciate the place. You can also save as a family so your kids can learn the value of the trip.
- Birthdays. You do not have to go all out every time you celebrate your children’s birthday. The concept is to have close friends and family get together to celebrate the occasion. You do not have to book the priciest venue and have gowns made for you daughter with a pony waiting at the other end of the door. Keep it simple and as they get older, make sure to include their friends on the list because it slowly becomes their set of memories with people they know rather than your office buddies.
- Sports or hobbies. This is similar to putting together birthday parties because as they get bigger, the more they know what they want. You might bring them to soccer or swimming but as they get bigger, they get the chance to know their interests and maybe a sport or hobby. At this point, you can help them get better at it by enrolling them in classes that they want. The most common problem is when parents seems to force their frustration on to their children by making them want the sport that they love but never had the chance to pursue.
- Cars. Autoblog.com shared that the average price of a new car is somewhere around $32,000 in 2013 and that is a lot of money for a car. Of course you would want to teach your children how to drive because this is one of those life skills that they need. But spending for children would always include helping them buying them a car. The idea is to get them second hand cars so you can save a huge amount while helping them get around on their own.
How to squeeze out some extra funds in your budget
Spending on children would always be on top of your list but there is no doubt that it would be a lot easier if you had a few extra funds in your budget. Here are a few tips to help you do just that.
- Revisit your budget. The best place to start looking for extra funds would be your budget. This is where you tweak and revise the amounts on your budget to be able to free up some funds for your children’s needs.
- Slash some expenses. This is the first thing you need to look at when you want to free up some funds because limiting the amount that goes out means you have more left behind for that ballet class that she likes or saving for a camping trip with the kids.
- Pay in cash. One smart spending tip is when you can, pay in cash. This helps you see the amount that goes out of your budget rather than just swiping your card and signing the receipt. This helps you feel the money leaving your hands and might make you more vigilant in your purchases.
- Be creative. Investopedia.com shares that there is a difference between being frugal and being cheap and as you save up for your children, you would want to be the former than the latter. You can set-up a tent in the backyard for your kids to enjoy the outdoors before you bring them to an actual campsite. You can learn how to cook to let your kids enjoy great tasting food at a fraction of the cost.
Spending on children will always be part of raising them up. Whether it is for their higher education or for their sports and hobbies, you need to align your budget for their growth and development. But you do not need to go all the way every time. You can be smart about how you spend for your kids and make sure that your finances can support the activities.