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As you continue to practice good saving habits, pass them on to your kids.

Raising Kids On A Budget

The average cost of raising a child from birth until age 18 now stands at a staggering $245,340,1 according to the USDA. This is expected to rise along with inflation and the cost of living. If you’ve already had a child or two, this may be cause for alarm, but if you spend wisely and save diligently, it doesn’t have to be frightening. Here are a few simple ways to plan and save for your child’s future.

Start Planning for College Now

When you have a child, saving as much as possible will become a common theme in your life. The biggest expense to worry about is the cost of college tuition. While the price of higher education continues to rise, that doesn’t mean saving isn’t worthwhile. Use a guide to find out if your state offers a good 529 college savings plan2 and begin contributing to it. Even if you can only save enough for 25 percent3 of your child’s tuition, it will make a sizeable dent in any loans you or your child may need. As shown in that chart from Lifehacker, the sooner you begin saving, the better.

Buy Used, Save Big

As a parent, you’ll always want to give your kids the best that money can buy, but “the best” doesn’t have to mean brand new. Children burn through plenty of stuff as they grow. Financially, it makes the most sense to save every penny on these purchases by buying them used.4 Usually you and your child will never know the difference. This will also teach children good habits about saving and the value of money that will serve them well as they grow older.

Don’t Forget About You

The day-to-day expenses of children may put a strain on your budget. But don’t let it impact your own savings. Continue to build and maintain an emergency fund, perhaps an even bigger one that accounts for additional food, transportation and other costs. Make sure you max out your 401(k) at work, especially if your employer will match your contribution. Remember to continue to grow and maintain an emergency fund for a rainy day, and try to take a break once in a while. A vacation will give your whole family a mental health boost.

Pass It On

As you learn smart saving habits for yourself, start teaching your kids how to do the same. Forbes compiled a rundown of age-appropriate lessons5 on spending and saving responsibly from preschool to high school. Just because your child doesn’t have to worry about bills or credit card balances doesn’t mean they can’t begin learning about the do’s and don’ts of money management. Some of the simplest concepts have far-reaching implications, such as delaying gratification and the basic math behind compounding interest, and can go a long way toward teaching kids about personal financial management. As they get older, lessons get less abstract and more practical as kids begin spending their own money. Any advice and examples you’ve given them in the past will influence their handling of these new situations.

Having kids should be a positive, rewarding experience. That doesn’t mean it’s easy, especially when it comes to your finances; but with a bit of planning and a lot of saving, at least one aspect of raising children will be much easier.

The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®. 


1U.S. Department of Agriculture. Retrieved from: https://www.usda.gov/media/press-releases/2014/08/18/parents-projected-spend-245340-raise-child-born-2013-according-usda

2LaPonsie, Maryalene. (2022, Feb 8) Retrieved from: https://money.usnews.com/money/personal-finance/family-finance/articles/how-to-save-money-for-your-kids

3Allan, Patrick. (2015, Apr 27). Retrieved from: https://lifehacker.com/this-chart-shows-what-to-save-each-year-to-send-your-ki-1700512948

4Taylor, Andrea. (2015, Sept 1). Retrieved from: https://www.kiplinger.com/article/spending/t050-c000-s001-3-worst-things-to-buy-new-for-kids.html

5Payne, Kevin. (2023, Jul 5). Retrieved from: https://www.forbes.com/advisor/banking/savings/best-savings-accounts-for-kids/