We've all heard about the high cost of raising children — child care, education, activities, health care, car insurance, family vacations, weddings, larger houses and the list seems endless. Trying to budget for these increased costs and continue to save money can be a challenge. It is a particularly daunting task for couples who decide to attempt this feat on one income. If your desire is to stay home with children, but the goal seems impossible, think about the following:
- When you consider the "cost of employment," the salary you give up by staying home may not be as vital. Factor in the cash outflow for transportation expenses, a professional wardrobe, lunches out, child care and family dinners out due to lack of preparation time and you may realize that you haven't lost that much income.
- Children's activities don't have to break the budget. Many of the expenses associated with raising children can be reduced. For example, limit children to one or two activities per year and rent or borrow the necessary equipment for sports. Birthday parties can be held at home, and vacations can be "in town." Many adults would agree that some of their warmest memories from childhood were opportunities for family togetherness, not necessarily expensive trips and material possessions.
- Savings can still happen on a limited budget, if you search for ways to find extra money. For example, you can raise the deductible on your car or house insurance, utilize a flexible spending account (FSA) for medical costs, average your utility bills, avoid fees at ATMs or on credit cards, buy items on sale or in bulk, drop expensive services like premium cable and consolidate those high interest rate credit cards.
- Staying home can still result in earning an income. While you are spending time with your children at home, consider providing services for parents who work outside the home — birthday party planning, running errands, providing carpool or babysitting. Or you may be able to continue working part-time hours from home as a consultant for your current employer.
The bottom line is that it is possible to live on a reduced budget. It may likely take some adjustments and some concessions, but if staying home is your priority, you can make it work.
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