Researchers at the United States Department of Agriculture found that the costs to middle-income (defined as $60,640 to $105,000 per year) parents for a baby born in 2012 will total $241,080 by the time the child turns 17. And for that money, the child only gets the basics: food, clothing, health care, housing, and education, among other necessities. Parents earning more than $105,000 can expect a child-rearing bill of a whopping $399,780.
Here are some tips on how to make the going easier:
To offset those future costs, one of the best things a parent can do is develop – and stick to – a savings plan. Opening up a 529 account is a great way to start. That money, designated for your child’s college years, has tax benefits. Every dollar you save now will be one less dollar your child has to borrow in the future. Be sure to have the funds automatically deducted from your paycheck to guarantee regular progress.
Day-to-day childcare is one of the more significant costs of child-rearing. Instead of hiring a babysitter for $10/hour, try sharing babysitting duties with neighbors. You take her children once a week, she takes yours once a week. Easy!
Look for inexpensive alternatives to after-school activities. Replace of the costly coaching and private lessons by investigating what your local town parks have to offer. You’ll be surprised at the plethora of low-cost and no-cost recreational activities available. Further still, check out the community calendar for free concerts, outings, and the like.
Use your local library! For free entertainment, there’s nothing better. Most libraries have a tremendous array of movies to borrow, and wonderfully entertaining outdoor programming and fascinating discussions for kids of all ages.
Check with your company’s human resources department for under-the-radar benefits. Many companies offer discounts from local retailers and service providers.
The best tip I ever heard on saving money was to drink more water. Instead of teaching your child to go for juice and soda, which are both high in calories and sugar, reach for a glass of water. It’s free, or very cheap, and will make your kids healthier in the long run.
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Michael Levenson, Co-Founder & CEO – After graduating from Syracuse University with majors in Finance and Entrepreneurship, Michael spent four years working at J.P. Morgan in New York City. During his last two years in finance, Michael focused on asset allocation and long term wealth planning as part of the Private Wealth Management division. In 2012 Michael’s entrepreneurial itch finally got the best of him which led him to join forces with Scott and Nick to launch Present Value.
The views and opinions expressed on this blog are purely the blog contributor’s. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer or provider. Writers may have conflicts of interest, and their opinions are their own.