Because you will invest hundreds of thousands of dollars in raising your children, check out these tips on how you can save money.
01 November 2016
It costs a lot of money to raise kids. On average parents that have two children will spend $406,000 on each child.
You may well question the exact amount, but there is no denying the costs add up, from school fees and extra-curricular activities, to feeding them and putting a roof over their heads.
Whatever the case it is a lot of money, but as any parent knows, it’s totally worth it.
What many don’t realise, though, is that there are lots of ways you can make raising a child less expensive without spoiling the fun. Here are some places you could start.
Buy second-hand and save
There’s a lot of second-hand stuff that you can buy your kids to keep costs down. Things like school uniforms, sports gear and toys (especially when they are younger) can all be bought at discount prices.
Sites like Gumtree and eBay have a plethora of great second-hand and even new goods, sometimes at drastically discounted prices, while the likes of Sustainable School Shop, School Seconds and The Uniform Exchange all sell various second-hand school books and uniforms. Alternatively ask your school if there is a social media page for trading and selling second-hand school gear.
As a rule, when buying second-hand you should try to avoid paying more than one third of the retail price of the goods.
Musical instruments can often be borrowed from the school and music lessons, particularly when they are just getting started, can often be given by school teachers for free.
Skip the expensive birthday parties
The average at-home kids party in Australia costs around $2000, and that’s only the average! Some parents are spending tens of thousands of dollars on their child’s birthday party. But this doesn’t have to be the way.
• Party supplies: Most party supplies can be found at a discount store and they are much cheaper. You can get plates, napkins, cups, table-clothes and plastic-ware – all for a fraction of the price.
• Cake: Why not bake the cake yourself rather than buying one from a cake shop? A standard kid’s cake could set you back $150, but you could make one yourself for as little as $20.
• Entertainment: There’s no need to book a magician or a petting zoo which can all cost hundreds of dollars, kids can entertain themselves at a party but it just may take a bit of organisation beforehand. Be creative and go online and get ideas for a fun party theme, games and activities. They could all enjoy one organised set of activities together or you can set up stations where they can randomly choose what they want to do. Organising outdoor activities in the yard or a park may help keep your home from total havoc and, when they’re consuming copious amounts of sugar, it’s probably better they are outside running around anyway.
Have you thought about applying for a scholarship?
Don’t think that scholarships are just for kids who are talented at sports and high achieving academics.
Many schools offer scholarships for music or other extra-curricular activities. These can include anything from playing an instrument, singing in the choir, or even for those that are active volunteers or involved in community service.
There are also a range of scholarships that help lower income earning families to afford school fees. These scholarships may have a total household income threshold or require you to make a submission that will be considered by a committee. You may be required to provide additional paperwork to prove your income or other details to support your submission.
If you want to know where these scholarships exist expect to do research and spend time on applications. You can start by:
• Calling your school and other schools in the area, and asking what scholarships they offer
• Checking online and seeing what other organisations exist that may be able to provide assistance – then give them a call to learn more
• Talking to other parents and seeing if they’ve had any successes with applying for scholarships
Put money aside for university fees while they are still young
HECS debt can hang around for years, and your child may be still paying it off in their thirties or even forties. A great way to help out is putting aside a certain amount of money over a long period of time to pay it off, or at least put a large dent in it.
Compound interest over 18 years can really add up – even with interest rates so low.
According to ASIC’s Money Smart calculator, saving just $20 per week in a savings account at 2.6 per cent over 18 years would return nearly $24,000 when the child finishes school, of which $5,000 is interest alone.
That’s nearly half of the average cost of a degree covered.
If you’re looking for more ways to save money on raising kids, try talking to family and friends about how they did it – you might pick up some great advice.