Having kids is anything but cheap. According to the USDA, families can expect to spend an average of $233,610 raising a child born in 2015 through age 17âand that’s not including the cost of college. The cost of raising a child has also increased since your parents were budgeting for kids. Between 2000 and 2010, for example, the cost of having children increased by 40 percent.
If you’ve had your first child, you understandâfrom diapers to day care to future extracurricular activities, you know how it all adds up. You’ve already learned how to adjust your budget for baby number one. How hard can it be repeating the process a second time?
While you may feel like a parenting pro, overlooking tips to prepare financially for a second child could be bad news for your bank account. Fortunately, affording a second child is more than doable with the right planning.
If your family is about to expand, consider these budgeting tips for a second child:
1. Think twice about upsizing
When asking yourself, “Can I afford to have a second child?”, consider whether your current home and car can accommodate your growing family.
Kimberly Palmer, personal finance expert at NerdWallet, says sharing bedrooms can be a major money-saver if you’re considering tips to prepare financially for a second child. Sharing might not be an option, however, if a second child would make an already small space feel even more cramped. Running the numbers through a mortgage affordability calculator can give you an idea of how much a bigger home might cost.
Swapping your current car out for something larger may also be on your mind if traveling with kids means doubling up on car seats and stowing a stroller and diaper bag onboard. But upgrading could mean adding an expensive car payment into your budget.
“Parents should first decide how much they can afford to spend on a car,” Palmer says.
Buying used can help stretch your budget when you’re trying to afford a second childâbut don’t cut corners on cost if it means sacrificing the safety features you want.
Families can expect to spend an average of $233,610 raising a child born in 2015 through age 17âand that’s not including the cost of college.
2. Be frugal about baby gear
It’s tempting to go out and buy all-new items for a second baby, but you may want to resist the urge. Palmer’s tips to prepare financially for a second child include reusing as much as you can from your first child. That might include clothes, furniture, blankets and toys.
Being frugal with family expenses can even extend past your own closet.
“If you live in a neighborhood with many children, you’ll often find other families giving away gently used items for free,” Palmer says. You may also want to scope out consignment shops and thrift stores for baby items, as well as online marketplaces and community forums. But similar to buying a used car, keep safety first when you’re using this budgeting tip for a second child.
“It’s important to check for recalls on items like strollers and cribs,” Palmer says. “You also want to make sure you have an up-to-date car seat that hasn’t been in any vehicle crashes.”
3. Weigh your childcare options
You may already realize how expensive day care can be for just one child, but that doesn’t mean affording a second child will be impossible.
Michael Gerstman, chartered financial consultant and CEO of Gerstman Financial Group, LLC in Fort Lauderdale, Florida, says parents should think about the trade-off between both parents working if it means paying more for daycare. If one parent’s income is going solely toward childcare, for example, it could make more sense for that parent to stay at home.
Even if this budgeting tip for a second child is appealing, you’ll also want to think about whether taking time away from work to care for kids could make it difficult to get ahead later in your career, Palmer adds.
“If you stay home with your child, then you’re also potentially sacrificing future earnings,” she says.
4. Watch out for sneaky expenses
There are two major budgeting tips for a second child that can sometimes be overlooked: review grocery and utility costs.
If you’re buying formula or other grocery items for a newborn, that can quickly add to your grocery budget. That grocery budget may continue to grow as your second child does and transitions to solid food. Having a new baby could also mean bigger utility bills if you’re doing laundry more often or running more air conditioning or heat to accommodate your family spending more time indoors with the little one.
Gerstman recommends using a budgeting app as a tip to prepare financially for a second child because it can help you plan and track your spending. If possible, start tracking expenses before the baby arrives. You can anticipate how these may change once you welcome home baby number two, especially since you’ve already seen how your expenses increased with your first child. Then, compare that estimate to what you’re actually spending after the baby is born to see what may be costing you more (or less) than you thought each month. You can then start reworking your budget to reflect your new reality and help you afford a second child.
5. Prioritize financial goals in your new budget
Most tips to prepare financially for a second child focus on spending, but don’t neglect creating line items for saving in your budget.
Sunny skies are the right time to save for a rainy day.
Start an emergency fund with no minimum balance.
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“An emergency fund is essential for a family,” Palmer says. “You want to make sure you can cover your bills even in the event of a job loss or unexpected expense.”
Paying off debt and saving for retirement should also be on your radar. You might even be thinking about starting to save for your children’s college.
Try your best to keep your own future in mind alongside your children’s. While it feels natural to put your children’s needs first, remember that your needs are also your family’sâand taking care of your future means taking care of theirs, too.
“Putting money aside when you’re expecting can help offset the sticker shock that comes with a new member of the family.”
The key to affording a second child
Remember, the earlier you begin planning, the easier affording a second child can be.
“Putting money aside when you’re expecting can help offset the sticker shock that comes with a new member of the family,” Palmer says. Plus, the more you plan ahead, the more time you’ll have to create priceless memories with your growing family.
The post Affording a Second Child: How to Make Your Budget Work appeared first on Discover Bank – Banking Topics Blog.
This year took so many twists and turns we havenât been able to keep countâ often leaving us in complete overwhelm with a whirlwind of thoughts and emotions. Grief, anxiety, and sheer disappointment are just a handful that comes to mind when we reflect on the endless amount of curveballs life has thrown over the past year. Tragedy and loss plagued the entire world, leaving us speechless day after day. Despite the darkness that loomed for what seems like an eternity there has been an outpour of positives that we canât forget to remember. As 2020 quickly comes to a close, letâs take the time to decompress and reflect on the happier moments we were lucky enough to live through and witness. Even though Thanksgiving may look less traditional than previous years, we still can readily name some things that shift our hearts to a place of gratitude.
Letâs face it â the hustle and bustle of life impact our family and friends more than weâd like to admit. Competing schedules, conflicts, and not making enough time for those that matter are often reasons why we are unable to nurture the people we hold near and dear. Because of restrictions on travel and other entertainment, we were forced to become more creative with our time indoors; in turn, helping us to restore the meaning of family and work-life balance. Quite frankly, it allowed us to hit the pause button on everything that probably was unintentionally too high on the priority list in the past. Our families served as the safety net itâs supposed to be when the weight of the world (and social media) became overbearing with less than desirable news. We utilized technology to a new degree when scheduling virtual happy hours, catch up sessions with our loved ones, and birthday celebrations in other geographic areas. It made us truly appreciate the very thing we took for granted; all the people that make up our family tribe. Â
Curating and developing passions
2020 generated a newfound level of introspection, leaving our minds to really consider what it is that we really cherish the most. Whether it be career-related or new passion projects, this year made room for some much-needed self-reflection, making us reassess where our fulfillment really comes from. Leveraging books, social media outlets, and various streams of consuming knowledge-based information sent us on a path of rediscovery. Remember that âotherâ to-do list thatâs filled with the things you really donât want to do around the house? It even made that list appear fun-filled! Home improvement projects and DIY tasks were done with enjoyment while being budget-friendly. Adulthood can be full of things that arenât as exciting, but mustering up the courage to take ideas from ideation to execution served as a second wind. New business ventures and side hustles were birthed with unmatched creativity, a place many of us havenât been in quite some time. Existing businesses were able to thrive despite the unprecedented events occurring nationally. Funding was also provided to various business owners which granted many small businesses to increase their visibility while positively generating profit.Â
The importance of sustainment
There are a countless number of families that were impacted by job loss and/or unexpected expenses. It doesnât matter if things started off rocky financially â what matters most is youâre still standing. Getting caught up on bills, eliminating some debt and saving are all things to be very proud of. Temporary hardships donât have to turn into permanent problems. Creating a plan of action and sticking to it no matter what arises will always be rewarding. Celebrating the small wins should never be overlooked. Weâve all handled this year in different ways â but whatâs most important is discovering what works for you. Rule of thumb for those that are battling with the ânot enoughâ emotions: donât believe the hype. While there is a multitude of people accomplishing great things, there are also many imposters. Social media is a highlight reel, a virtual platform where people can share whatever information they choose, at their discretion. People are more likely to share their highs versus their lows, so be sure to keep in mind you may only be getting a small piece of the overall story. Donât look at someone elseâs life and fail to recognize what youâve done on your own. Financial progress, no matter how insignificant you may think it is â is still progress. We all make financial missteps and life has a way of making things very difficult that hit us where it really hurts. Keeping your head above water, remaining afloat, maintaining your health, and providing for your family should never be considered a small feat. Grant yourself some grace and reflect on the dedication it took for you to get (and stay) where you currently are.
Back to the basics
This year forced us to really hone in on what matters and prioritize accordingly. This applies to our lives, but most importantly our finances. Pulling back the curtain to really take a look and evaluate where money was going served as a constant reminder that we should be doing this more than the occasional once or twice a year. Itâs never too late (or too early) to create new money habits! Financial stability is essential â and maybe the cushion we imagined should be enough proved itself to be untrue. Our willingness to make changes at a faster rate to ensure the financial security of our families felt less painful and so much more intentional. The uncertainty of everything occurring allowed us to complain less while redefining comfort levels with our contingency plans.
No matter what has transpired this year, what are you most thankful for? As things come to mind be sure to jot them down. Reference them when your days seem laborious or when your feelings try to force you to reflect on things that arenât as positive. Itâs clear we donât know what the future holds, but we do know (and have been reintroduced) to the moments, things, and people that continually keep us hopeful and thankful â no matter what lies ahead.
The post Gratitude in a Difficult Year appeared first on MintLife Blog.
Summer camp is a rite of passage. A place where traditions begin and memories are made. A unique venue with a structured opportunity for kids to grow and learn new skills. As enriching as it may seem, embarking on the process each year can be intense: How do I choose a camp? Should it have a philosophy? How do I know my child will have fun? But often the question at the top of the list is, “How do I budget for summer camp?”
Whether you’re scrambling for camp arrangements for this year or getting a jump-start on next summer, you’re in need of a working budget for summer camp. “As a parent who sent several kids to summer camp for many years, I know how expensive it can be,” says Leslie H. Tayne, author and founder of debt solutions law firm Tayne Law Group.
Read on for expert budgeting tips for summer camp and how to save money on summer camp so you can make the best decisions concerning your wallet and your child’s wish list:
1. Get a handle on camp tuition
According to the American Camp Association, sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition isn’t too far behind, ranging from $199 to more than $800 per week.
One of the best ways to budget for summer camp and prepare for tuition costs is to understand your needs for the summer as well as your child’s interests. This will help you determine ‘how much’ and ‘what type’ of camp you want: Is day-camp coverage important all summer because of work? Does your child want to experience sleep-away camp for a portion of the time? Is a camp with a specific focus (say a sport or hobby) on the list?
Depending on your circumstances and child’s expectations, it’s not unusual to be looking at a combination of campsâand tuition costsâin one season. If you have multiple kids at different ages, with different interests, creating a budget for summer camp and understanding how much you’ll need to dish out in tuition becomes especially important.
Once your camp plan is in place, assess how much you’ll need to pay in tuition for the summer months with school out of session. The sooner you’ve arrived at this figure, the easier it will be to work the expense into your household budget, says Heather Schisler, money-saving expert and founder of deal site Passion for Savings. “It’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time,” Schisler says.
Sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition ranges from $199 to more than $800 per week.
2. Plan for expenses beyond tuition
One of the biggest budgeting tips for summer camp is planning for the many costs outside of tuition. Tayne points out that sleep-away camp usually comes with a longer supply list than day campâsuch as specific clothing or gear and toiletries to cover the length of stay. If your child is heading to a sleep-away camp far from home, your budget for summer camp may also need to factor in the cost of transportation or the cost to ship luggage. Day camps can also have fees for extended hours or transportation if your child rides a camp bus each day.
Once you’ve selected a campâday camp or sleep-awayâcheck its website for camper packing lists and guidelines. Most camps offer checklists that you can print out, which can be good for tracking supplies and costs as you go. After you enroll, your camp may provide access to an online portal that can help you manage tuition and track additional expenses, like canteen money, which is cash your child can use for snacks and additional supplies while away.
3. Create a year-round savings strategy
By calculating the necessary expenses ahead of time for the camps you and your campers have chosen, you’ll be able to determine an overall budget for summer camp. A budgeting tip for summer camp is to save money monthly throughout the year. To determine a monthly savings goal, divide your total summer camp costs by the amount of months you have until camp starts. If camp is quickly approaching and you’re feeling the budget crunch, you may want to start saving for next year’s costs once it’s back-to-school time so you can spread out your costs over a longer period of time.
Once you start saving, you’ll need a place to put it, right? When it comes to budgeting tips for summer camp, consider placing your cash in a dedicated account, which will keep it separate from your regular expenses and help you avoid tapping it for other reasons. “Then you can have your bank set up an auto draft [for the summer camp money] so it automatically goes into your account each month and you will have the money you need when summer rolls around,” Schisler says. If you use a Discover Online Savings Account for this purpose, you’ll also earn interest that can be put toward camp expenses.
âIt’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time.â
4. Find ways to fund your summer camp account
To boost cash in your summer camp savings account, consider asking relatives and family friends to gift your children cash for camp in lieu of birthday and holiday gifts, says Tracie Fobes of budget blog Penny Pinchin’ Mom. “If your child has his or her heart set on sleep-away camp, they may be willing to forgo a gift or two,” Fobes says.
Another budgeting tip for summer camp is to put your cashback rewards toward your budget for summer camp. For example, if you open a checking account with Discoverâcalled Cashback Debitâyou’ll earn 1% cash back on up to $3,000 in debit card purchases each month.1 You can enroll to have that cashback bonus automatically deposited into your Discover Online Savings Account so it remains designated for camp costs (and can grow with interest).
Say hello to cash back on debit card purchases.
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Lastly, if you don’t have your tax refund earmarked for another financial goal, you could use the windfall to kick-start your summer camp savings fund. Depending on the refund amount and your total camp costs, it could reduce your monthly summer camp savings goal significantly.
5. Reduce camp-related costs
Despite having your budget for summer camp in full view and planning in advance, camp can still be expensive. Here are some ways to save money on summer camp by cutting down on camp costs:
Ask about scholarships and grants: “Some camps offer scholarships or discounts for children and families,” Fobes says. Research your camp to see if they have anything similar to help offsetâor even pay forâthe cost of tuition.
Use a Dependent Care Flexible Spending Account (DCFSA): A Dependent Care Flexible Spending Account is a pre-tax benefit account that can be used to pay for eligible dependent care services. You can use this type of account to “cover dependent care [costs], and camp may qualify,” Fobes says.
Negotiate price: “Many people don’t think about negotiating the cost of summer camp, but it is possible,” Tayne says, and more and more camps are open to it.
See if there’s an “honor system”: Some camps have what’s known as an honor system, where the camp offers a range of costs, or tiered pricing, and parents can pay what they can comfortably afford. Every child enjoys the same camp experience, regardless of which price point, and billing is kept private.
Take advantage of discounts: Attention early birds and web surfers: “There are sometimes discounts offered when you sign up early or register online,” Fobes says.
Volunteer: If your summer schedule allows, “offer to work at the camp,” Fobes says. If you lend your servicesâperhaps for the camp blog or cleaning the camp house before the season startsâyour child may be able to attend camp for free or a reduced rate.
Don’t let summer camp costs become a family budget-buster. Plan ahead and look for money-saving opportunities and work your budget for summer camp into your annual financial plan.
To save money on summer camp, remember that you only need to focus on camp necessities. “Don’t spend a lot of extra money on new clothing, bedding, trunks or suitcases,” Schisler says. “Remember, summer camp is all about the experience, not the things.”
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as VenmoÂ® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
The post Your Guide to Budgeting for Summer Camp appeared first on Discover Bank – Banking Topics Blog.
As a child, money really doesnât hold the same value as it does in our adulthood. Children only think about money and finances in general when it relates to something they want or think they need â often tangible items like clothes, shoes, or that shiny new toy.
Maybe we had the same ideals during our adolescence until life showed us differently. No matter how we were raised or how finances specifically were (or were not) talked about, itâs important we leverage what we know now and create an environment where the entire family can benefit â no matter the age.
Have open and honest conversations
In many households, the topic of money was completely off-limits to children and categorized as an âadultâ conversation. While we all understand that kids should in fact â be kids, that doesnât necessarily mean we should withhold them from these conversations.
Finances can be tailored for all age groups and frankly, you would be surprised how quickly theyâre able to pick up information. For example, if there are mistakes youâd like to prevent your child from making (or at least generate awareness), use real-life experiences to help paint the picture for them.
What are some patterns or behaviors you fell into in your younger years? What would you tell your younger self if you had the ability to? Use these questions to generate a list of things to talk about as the situation allows. They may not be able to grasp things fully, but they will have the background knowledge you provided to help generate better decision-making skills as it relates to finances.Â
Every moment is teachable
Since children donât have the responsibility of paying bills, theyâre typically oblivious to the consequences (good or bad) of things. If your little ones have a hard time remembering to turn off lights when theyâre not in use or turn the water off when brushing their teeth â bring it to their attention. Explain to them that utility bills are not free and every little bit helps. While itâs not about being a drill sergeant and patrolling their every move, itâs certainly about creating children that are aware and mindful.
If you all are in the grocery store and they want to pick every single cereal in the aisle, you can easily explain why itâs important to select a couple of boxes versus ten. As much as growing children eat, they donât need ten different boxes of sugary cereal. This is the opportunity to go into depth about food being readily available when the boxes selected run low. Also, food in fact does go bad if not eaten in a time period which creates more waste â on top of wasting money!
Discuss the importance of saving early and often
From the piggy bank days, we understand why itâs so important to save. Emergencies happen, unexpected occurrences are a part of life, and having multiple nest eggs to fall back on creates a sense of financial peace. Open a savings account for each child and talk about why itâs important to save.
Many banks have checking and savings accounts tailored for minors. If they receive an allowance, have a hobby that generates some income. If they are old enough to seek employment, make sure you all are discussing their own personal finance goals weekly.
Keeping this at the forefront of their minds may be annoying to them, but children require positive reinforcement. Repetition is key and they will thank you later for all of the valuable information you provided. Saving doesnât have to be painted as this laborious, boring topic. Understand, children will make mistakes â but didnât we all?!
Create an environment that helps them build a money mindset
The power of analysis and critical thinking are some of the most influential skills to have and put to good use. Creating a safe space for your children to ask questions, make good choices, make not-so-good ones and learn from them is the most fulfilling thing we can do as adults to help mold their impressionable and sharp minds. How many of us were reactive versus proactive about money? No matter where you fell or fall today on the spectrum â we can use everyday happenings to help them understand the future is just as important as the present.
Letâs say your child wants to buy something. The first step would be to ask them questions like, âHow much is this item? Why do you want this item? What can this item do for you? Do you want to save up so you can purchase it?â Allow them to think these answers through; this helps them process the value of obtaining the product. Next is the saving process. This physically helps them show the âwaiting periodâ â the time you identify an item and the actual time period it takes to acquire the funds to purchase. Sometimes, during this process, they may identify something else theyâd like or completely scrap the product altogether. During this waiting period, you can also ask questions like â âWill you have money left over after this item is bought? Has anything changed about what youâd like to buy?â These critical skills are important and will help shape their ability to be sure in their decisions or pivot. Finally, the thing theyâve been waiting for â buying time! This is the gratification period where theyâre able to see their ability to save and the outcome of their hard work.
Be the change you wish to see
All of the examples previously mentioned not only help our children, but they help us too. Removing finances from the taboo list now creates a new audience â our kids. They become our overseers, to help challenge us on our own financial decisions. This is a win-win for everyone involved. When it comes to family outings, vacations, or any planned functions â incorporate the children in these exercises. Money can indeed be a family affair and a constant teaching lesson for everyone!
The post Making Finances a Family Affair appeared first on MintLife Blog.