It’s no secret that raising a kid is expensive.
According to the U.S. Department of Agriculture’s latest estimate, raising a child in a middle-income family for the next 17 years now costs roughly $241,080, up 2.6% from the previous year’s report. Perhaps even more disturbing is that this whopping expense only includes basic necessities like food, shelter and child care, and the costs can run even higher if you make more than $105,000 and live in an urban area.
The upshot is that it can be hard to stash away money — especially into non-retirement and non-college-related savings accounts. That’s why today’s hint is three creative ways to make saving a little extra money easier.
1.) Pay a bill to yourself each month. I love this concept, which I came across on the blog GetRichSlowly. The basic idea is to stash away something in savings each month just as you would pay any other bill, and prioritize paying yourself over the other bills. As the post notes, “make the first bill you pay each month the one to your savings account.” And you could do this strategy in the form of an automatic investment, or manually do it each month if you want to vary how much you pay yourself.
2.) Consider banking one salary – or a set percentage of one salary. Back in 2010 0n The New York Times’ Bucks personal finance blog, I wrote about a clever saving strategy used by some family friends, a couple with two incomes. They saved one of their salaries entirely (the smaller one) and used the bigger salary to pay for everything else. While this exact approach may be unrealistic for many parents, saving a set percentage of one salary should be more feasible and would offer a good way to budget for living on less. But what if you’re not part of a two-income household? Then, you could consider banking any proceeds from a side job, as one of the commenters to my original post suggested.
3.) Set aside your spare change. As Cameron Huddleston suggested on Kiplinger, “toss spare change in a jar.” While this approach certainly won’t lead to significant savings, “every little bit helps,” as the Kiplinger writer pointed out. My husband and I have always had such a jar (well, actually a basket) where we throw our spare change, and when we recently exchanged it for cash, we had saved at least $40.
As for me, I recently had to turn off an automatic monthly savings investment I had set up pre kid because setting aside so much was making it hard for me to cover child-related expenses. This is why I’m now trying the first option from the list above. Just like I pay bills each month for everything from water to wireless service, I’ve added manually paying my savings at least a bit to my monthly bill list.
What are your favorite strategies for stashing more money away?