As a mom to twins, I can tell you first-hand that having kids is life changing! It's definitely expensive, and most certainly requires that you readjust your finances to accommodate their needs. However, you CAN have children and still manage your finances well. And you CAN build long-term wealth while providing for your children's needs. You just need to plan accordingly.
So whether you have babies or small kids, there are lots of clever ways to save money so that you can still meet your financial goals. Here, we'll walk you through how to do just that. And if you have any clever ideas for saving money while raising kids, share them with us in the comments!
How to save money with babies and kids
When you first start having kids, you might need to adjust how much you save. But that doesn't mean you should stop saving money or contributing to your retirement accounts. Quite the contrary—it's more important than ever now! And remember, every penny counts toward your overall portfolio.
Assessing your current lifestyle can make a big difference in how much your finances need to change once you have a baby. For example, you'll be spending lots of time taking care of your beautiful new bundle of joy. As such, you might not have as much time to watch as much TV so do you really still need all those extra channels? It's an easy way to save an additional $20 - $60 every month!
1. Start that 529 / college savings account
Give your child the opportunity to get a head start financially by starting a college savings account as soon as you can. The 529 allows you to save for their college tuition with considerable tax savings. Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, as long as you use withdrawals for eligible college expenses. See specific details on the SEC website here.
If you aren't sure about investing in a 529 account, set up an independent account in their names where you save money over 16-18 years that'll go toward their college education.
2. Always buy clothes on sale
Babies outgrow clothing quickly! Most of the time, it's not worth buying full price. The good news is, there's always a sale on baby clothing. And because you know they are constantly growing, you can purchase larger sizes as well. However, keep in mind that sales are tempting! The point of shopping on sale is to save money—not to spend twice as much because those adorable clothes are on sale.
3. Accept gifts given and help offered
When you first have a baby, lots of friends and family will want to help you. They will offer to help you with babysitting, bring you gifts, or cook your meals. Take the help! You might be able to save on hiring a nanny or on sending your baby to daycare right away.
The great thing about baby gifts and hand-me-downs is that most people tend to give you stuff you'll actually use. You can save a ton of money as a result of the gifts you get since you won't need to go out and buy them.
4. Make your own baby food
A food processor, some Pinterest baby recipes, and fresh organic fruits, veggies, and grains. That's all you need to whip up some amazing meals for your little one as they transition into eating solid foods. And since you can make these meals in bulk and freeze them, you'll save a ton on baby food. Plus, you'll know exactly what you're feeding your baby.
5. Use coupons
One thing I realized is that baby coupons are everywhere! From furniture to clothing to food, there's pretty much a coupon for almost everything. All it takes is a quick Google search for the best coupon sites or sign up to be on your favorite store's mailing list.
6. Make sure your little one is insured
Ensure that your little one is added to your health plan within the allocated timeframe so they're not stuck without health insurance! All those well visits add up, not to mention all the sniffles and scrapes that can happen during that first year.
7. Eat more meals at home
Trips to the ice cream shop and your favorite fast-food spot add up fast. Cut down these visits to once a month and enjoy meals at home with your children instead. Make it fun by having ice cream at home or popcorn and pizza night. These are things you can buy for a fraction of the cost at the grocery store ( or make at home yourself with ingredients from the grocery store).
8. Try out the farmers market
Most people don't realize that farmers' markets can be a lot cheaper than the regular grocery store - by as much as 40% because they have much less overhead than the big brands. And the best part is that at the farmer's markets, you can buy the freshest locally grown and also organic foods - saving money and supporting your local farmer's community at the same time.
9. Substitute toys and video games with home games and activities
Toys and video games can get really pricey. Instead, limit how much you buy and substitute them with activities at home and with home-made games. There are a ton of ideas that can be found online on websites like pinterest.com.
10. Don't move house right away
A lot of times the next step after having a baby or two is to move into a bigger space. However, moving can be expensive and your bigger space could cost you more money that could be used to bulk up your savings account if you can wait for a year or two. However, if your move will save you money, then you should absolutely do it!
It might seem difficult to save money with children but with a few changes, it's definitely possible! Already parents? What other things do you do to save money now that you have children?