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5 Money-Saving Tips for Your Wedding

Preparing for the big day? Here are some areas where you can cut costs.

The moment you get engaged, everyone wants to know: When is the wedding? Engagements can be simple when compared to weddings—unless you are eloping or having a courthouse ceremony. If you are wedding planning on a budget and your plans don’t include hiring a wedding planner, here are some money-saving tips for your wedding:

The dress

2018 national average: $1,6311

Not wearing your grandmother’s gown? Buying used or renting can be a cost-effective way to save money on your wedding. Because wedding dresses tend to be worn once and then preserved, they are usually in “like new” condition when sold secondhand. Many websites offer pre-owned wedding dresses from major designers for when you are wedding planning on a budget.

Save money on your wedding by shopping for dresses secondhand

“We find it very rare that a bride finds sentimental value in her veil or headpiece unless it is an heirloom,” says Brittany Haas, CEO of Happily Ever Borrowed, an accessory rental store. “Accessories are generally an expensive afterthought,” she adds. “For example, the veil is something that you generally only wear for 15 minutes for your wedding day. Brides have so many more romantic things to spend on than an object only worn for 15 minutes.”

Local consignment stores also frequently carry wedding dresses, and sometimes a formal evening gown can double for your big day, which can help you save money on your wedding.

One Last Frog, suggests brides, “Shop at wholesale stores for a high quantity of decor and flowers. Typically, wholesale stores are more open to negotiation and will give you a better price for the quantity of items or flowers a bride will order.”

And once you have your flowers, if you have bridesmaids willing to help out, you can easily put together bouquets to help cut back on wedding costs.

The reception venue

2018 national average: $15,4391

Most wedding guides will tell you reception venues charge less if you get married “off-season” in January, February or March, or during the week instead of on the weekend. The main way to really save on your venue and cut back on wedding costs is to keep your guest list low (100 or less). A smaller guest list can help you save money on your wedding by lowering the cost for food, tables, chairs and drinks.

When comparing the prices of different venues, consider that going with an all-inclusive venue can be a good money-saving tip for your wedding, says Joyce Scardina Becker, designer-in-chief of Events of Distinction. “The reception site and the vendors may have prearranged financial agreements, making it easy and more cost-effective,” Becker says.

The caterer

2018 national average: $70 per person1

Sit-down or buffet? “Many couples think that buffets are less expensive than a sit-down plated meal, but this is often not the case,” Becker says. “Many times buffets are more expensive because you have to offer more choices and you cannot control the quantity of food a guest takes. So you should check with your caterer before deciding on a buffet versus a sit-down dinner.”

If you’re wedding planning on a budget, food trucks can be an alternative to cut back on wedding costs, while providing a memorable guest experience.

When it comes to alcohol, Becker suggests:

  • Having a short cocktail hour—make it 45 minutes
  • Avoiding salty hors d’oeuvres (they make guests thirstier)
  • Uncorking bottles only as needed (a wedding planner or event organizer can control this)

Additionally, if your venue allows you to bring your own alcohol, wholesalers tend to offer lower prices and typically allow you to return any unopened bottles for credit. Bringing your own alcohol could help you save quite a bit of money on your wedding.

The photographer

2018 national average: $2,6791

One of the easiest ways to cut back on wedding costs is to limit how long your photographer stays. If you’re getting married in the off-season, you’ll likely find better deals than those getting hitched in the summer and fall.

An often overlooked money-saving tip for your wedding: Contact local college students studying photography who are interested in expanding their portfolio. Some experienced photographers may also have assistants who charge less, while still providing good service.

Happily (and financially) ever after

While looking for ways to save money on your wedding may not sound romantic, it may be the best gift couples can give themselves in the long run. Utilizing these money-saving tips to cut back on wedding costs can mean more savings to put toward other financial goals as a couple—goals like buying a home, starting a family, saving for a child’s education or building an emergency fund.

​Source:

1. https://www.theknot.com/content/average-wedding-cost

Source: discover.com

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How to Afford Youth Sports on a Budget

Keeping your kids active in sports doesn’t have to derail your household budget.

Your child says she wants to learn to play soccer. You see it as a great opportunity for her to be physically active and build confidence. (And okay, maybe a small part of you is harboring dreams that she’ll become the sport’s next superstar.) You decide to sign her up for a local soccer league but there’s just one hitch: the cost.

According to the 2017 State of Play report published by the Aspen Institute, a nonprofit think tank, nearly 72 percent of children aged 6 to 12 played at least one team or individual sport in 2016. A survey conducted by the brokerage firm TD Ameritrade found that in 2016, the typical sports parent spent between $100 and $499 per month, per child, on elite youth athletics. Dishing out more than $1,000 per month, per child, is not unheard of, according to the study.

With costs that high, you may be wondering how to afford youth sports on a budget, or if it’s even possible. It is, if you are prepared. Having a game plan for spending can keep kids’ sports from draining your budget.

Consider these five tips if you’re wondering how to afford youth sports without going broke:

1. Take new sports for a test run

Playing a sport involves a commitment of both time and money, which can end up being wasted if it turns out to be the wrong fit for your child. Amy Boyington, a mother of two and founder of The Work at Home Mom, a blog focused on helping moms balance career and family, imposes a simple rule when her children express interest in something new.

“I let each of my children try whatever sport they want, but with one condition: They’ll try a budget-friendly version first,” Boyington says.

How to afford youth sports without going broke? Test out a sport before committing to a full season

For example, her son recently wanted to give basketball a go. After researching local options, including the YMCA league, Boyington signed him up for a low-cost program sponsored and run by a local family. For a $25 fee, her son received a t-shirt, basketball, jump rope for training and eight weeks of instruction in basketball basics.

Compared to the $50 YMCA fee Boyington would be charged as a non-member, she felt the family-run league offered more for the cost and was better suited to testing out the court. And it’s well below the $1,143 per year a 2017 TIME magazine story reported parents spend on average to keep their kids active in basketball. The article bases that figure on survey data collected by researchers at Utah State University, including a 2016 study, which found that families spend an average of $2,292 per year on their children’s sports participation.

If you have beginning athletes, finding cost-effective leagues and practices is a great solution for how to afford kids sports without going broke, while still giving them the freedom to explore new things.

2. Do one thing at a time

Ground rules about how many sports children can play are necessary to keep kids’ sports from draining your budget. That’s especially true if their interests or abilities tend to veer toward pricier activities. The TIME report’s analysis of the Utah State data points to lacrosse, hockey and baseball as being among the most expensive youth sports. Mark Aselstine, an El Cerrito, California-based father of two, limits his children to one sport per season, which has been crucial for saving money.

Wondering how to afford youth sports on a budget? Focus on one sport at a time to keep costs down.

In the Bay Area, where his family lives, baseball registration fees for their local Little League can range from $125 to $225, based on the child’s age. That doesn’t include a $100 required deposit, or an additional $25 fee for late registration. You can see how the costs for just one sport can add up, especially considering that uniforms, practice equipment and travel expenses are extras that Aselstine has to account for. Since he’s focused on how to afford youth sports on a budget, he says he’d only consider making an exception for a second sport if it’s something his kids can do without paying a fee, such as tennis lessons included in their after-school program.

Boyington has adopted a similar policy for how to afford youth sports on a budget. As a result, she reaps more than just a money-saving benefit. Limiting her children to one sport at a time eliminates the stress of trying to make it to every practice and game. More importantly, “it gives my kids a chance to really involve themselves in that sport, giving it their full dedication for the season,” she says.

If you’re trying to keep kids’ sports from draining your budget and your child excels at more than one activity, you’ll have to decide how to accommodate that in your budget. If they’re enjoying sports played during different seasons, you can still keep the focus (and budget) on just one at a time. When sports run concurrently, you may choose to prioritize the one they’re most interested in or that’s least expensive. If they’re going to be involved in more than one sport at a time, choosing the lowest-cost leagues or programs could be a good option.

3. Know the numbers upfront

If how to afford youth sports on a budget is top-of-mind, get a complete breakdown of the costs before signing up so you can plan your budget in advance. That includes what you’ll pay for registration fees, uniforms and equipment, as well as extras like team photos. Boyington suggests looking for cost-cutting opportunities once you get a complete list of expenses.

“I’m not afraid to ask about things I can go the cheap route on,” she says, “like parts of the uniform that I might be able to purchase a budget brand for instead of the name brand.”

Taking advantage of early registration discounts is another way to keep kids’ sports from draining your budget. It may seem like small savings, but it’s money that can be set aside to use for other sports-related costs.

4. Choose used if possible

How to afford youth sports without going broke could come down to the items that are needed to participate. In the TD Ameritrade survey, 44 percent of parents said equipment was the major expense associated with their child’s sports. Twenty-six percent cited the cost of uniforms.

Consider baseball, which ranks as one of the most popular youth sports, according to the Aspen Institute. A complete youth catcher’s kit—including helmet, chest protector and shin guards—can run as much as $350, according to the retailer BaseballMonkey.com. Bats can easily land in a similar price range, and cleats can add another $10 to $60 to the total. It may seem difficult to keep kids’ sports from draining your budget when you still have to consider the cost of the standard game uniform, gloves, hats, practice gear and a bag to hold everything.

When the question is how to afford youth sports without going broke, the answer may be buying used as often as possible. But, Boyington cautions, some leagues won’t allow you to substitute used uniforms or equipment for new ones. In that scenario, she recommends seeking out leagues such as those run by the parks and rec department, a local church or families—like the one her son participated in—that have more flexible rules about used equipment.

“These leagues understand people like me who want to get their kids involved in activities in the community,” she says, “but can’t afford to spend thousands of dollars every year to do so.”

These types of programs can also yield additional savings if you’re able to get a fee waiver or a discount on equipment and uniforms by volunteering as a coach or team parent. Other alternatives to buying new if you’re trying to figure out how to afford youth sports on a budget include renting equipment or participating in fundraisers to help pay for uniform costs.

Aselstine offers another tip: Look for leagues that offer equipment swaps.

“Our soccer league has an awesome barter system the first day of sign-ups,” he says. “Bring a set of cleats, take a set of cleats. The same goes for uniforms.”

Aselstine estimates that the swap saves his family $100 per season on equipment and uniforms.

5. Consider the long-term benefits of elite sports

Investing big bucks in an elite or travel team requires some serious thought, especially if how to afford youth sports without going broke is a concern. Boyington says she would only allow her children to play if they’ve been involved steadily in the sport for several years, and they’re old enough to contribute in some way to the cost with a part-time job.

Before allocating a large part of your sports budget to an elite sport, consider what the benefit is to your child and whether the costs are justified. In the TD Ameritrade survey, for instance, 54 percent of parents said they were hopeful that elite play could lead to an athletic scholarship, and 42 percent hoped their child would eventually go on to play at the Olympic or professional level. The percentage of parents of former players whose children actually got a scholarship, turned pro or became an Olympian was much lower, however.

Weighing the probability of future play, alongside the cost and your child’s long-term interests, can help you decide what’s reasonable to invest to keep kids’ sports from draining your budget.

Source: discover.com

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Financial Planning for a Baby: The Costs of Raising a Child

This infographic breaks down some of the expected—and not-so-expected—costs for your budget.

Babies are one of the miracles of life. Also miraculous is the growing cost of raising a child, which is why financial planning for a baby can be so important. From birth, through childhood, to adolescence (oh, the fun times) and into young adulthood, having children means a range of expenses. New expenses. This is where financial planning for new parents comes in.

If you’re planning for a child or about to welcome a new addition to the family (congrats!) and you want to prepare for a baby financially, here’s a breakdown of the expected—and some of the not-so-expected—costs to consider for your budget:

Financial Planning for a Baby Infographic

Although the numbers associated with raising a child can be eye-opening, and perhaps intimidating, it’s not that difficult to prepare for a baby financially. It just takes some organization, forward thinking and careful financial planning for a baby. That means spending less while raising a family and saving wisely with your online savings account. By planning ahead and being prepared, you’ll make financial planning for new parents look like a breeze and enjoy the ride of parenting.

Source: discover.com

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How to Throw a Baby Shower On a Budget

With some creativity and help from friends, it’s easy to plan a baby shower on a budget that’s right for you.

If you’re at a stage in life when many of your friends are having children, or if you’re about to become a grandparent several times over, you could find yourself thrust into planning more than one baby shower. These soirees can get pricey if you don’t keep budget in mind from the moment you accept the role as host.

Fortunately, most baby showers are not expected to look like the over-the-top celebrity events that dominate news headlines. But you’ll still need to handle food, decorations and party favors, as well as finding a location to hold the event.

It is possible to plan a baby shower on a budget while still creating a beautiful and memorable event for the parents-to-be and their loved ones.

Here are four tips for budget baby showers that will be sure to impress your guests:

1. Set clear expectations

Latoya Scott shares money-saving tips on her personal finance blog Life and a Budget. She’s thrown four baby showers, two she volunteered for and two she was asked to plan. She’s never spent more than $200 on a baby shower.

If you're wondering how to throw a baby shower on a budget, start by talking with the mom-to-be.

Her number one tip before you begin to plan a baby shower on a budget is to set clear expectations with everyone involved.

“Most of the time, I’ve volunteered to host the shower because I love doing them,” she says. “In those cases, I ask a lot of questions about things they like and let them know upfront that I consider it to be fun trying to incorporate as many of their wishes and likes on a budget.”

When it came to the showers she was asked to plan, she wasn’t shy about telling the mothers-to-be that she needed to check her budget first to make sure she could afford to throw the parties. She returned to both with her $200 price point and asked if that was okay.

“Out of those two showers, one person agreed and the other person actually found someone who was willing to help me, and I didn’t mind at all,” she says.

2. Ask for help

Scott’s second piece of advice for those strategizing on how to throw a baby shower on a budget: Enlist your friends. That could mean setting up a co-hosting arrangement or assigning your friends different tasks.

“While I may handle the food, another friend may be completely responsible for games,” Scott says. “Another friend may handle gifts, and sometimes another will handle decor.”

Enlist the help of friends when you're trying to plan a baby shower on a budget.

Scott also suggests giving everyone involved a spending cap to ensure that you plan a baby shower on a budget. How she handles the spending cap depends on the group of friends involved, she says. Some friends use their money to cover their contribution, while others hand Scott cash to cover their share of logistics and let her plan away.

The exception is often food, since it’s usually more expensive than other ingredients to hosting a baby shower. In that case, Scott either has everyone pitch in for the cost of food or assigns the food to two different people instead of just one.

As for a location, Scott gets creative to plan a baby shower on a budget.

“I’ve been able to host showers at places for free because someone I knew lived in an apartment complex and I asked if they could use the apartment clubhouse,” she says.

She suggests local parks and recreation centers could also help plan a baby shower on a budget. Meeting rooms can often be rented for a flat fee or a three- to four-hour window, Scott says. If a few friends pitch in to cover that cost, that brings your personal expenses down.

3. Get creative with decor

Rather than buying disposable shower decorations, think long term for a tip for budget baby showers. That’s what Colleen Coughlin recommends. She is a clothing designer and founder of The Full Edit, a professional styling and organization company.

Coughlin recently planned a baby shower on a budget for a close friend and spent a whopping $0 on decorations. She made some of the decorations herself with materials she gathered from her clients. For example, she cut the letters for “BABY” out of a discarded silver sun protector for a car. Coughlin has also reused items from baby showers she has attended when she was determining how to throw a baby shower on a budget.

“I went to a baby shower shortly before organizing one where they were going to throw away all the decorations,” she says. “Since I knew I would be throwing a shower myself, I asked if I could take the decorations.”

One of Coughlin’s top tips for budget baby showers is to consider decorations that are gender neutral and can be reused, like those featuring orange, yellow and white. Coughlin suggests making a bunting banner out of bed sheets or old pillow cases you no longer use, then pinning or taping the bunting to the wall to decorate your hosting space.

4. Look around your house for party favors

When it comes to how to throw a baby shower on a budget, Coughlin could easily take home a gold medal. In addition to spending nothing on decorations for the baby shower she hosted, Coughlin also spent $0 on party favors for guests.

“You’d be surprised how many shower gifts are in your house already,” she says. “I gave away beauty products, plants and a Coach purse from a ‘The Full Edit’ client that I already had laying around. They loved it!”

For a party favor tip for budget baby showers, Coughlin points out that if you order makeup from certain companies, you may already have a collection of beauty samples you can use as party favors. If you happen to attend industry events for work, you may be able to use samples from swag bags as party favors. Coughlin is also not opposed to re-gifting items you don’t want to help plan a baby shower on a budget (exhibit A: that candle your distant cousin gave you for Christmas).

Plan a baby shower on a budget

As you can see from these tips for budget baby showers, with some creative thinking and a little help from friends, you and your loved ones can celebrate the miracle of life without going broke.

Source: discover.com

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Budgeting Tips for the Sandwich Generation: How to Care for Kids and Parents

If you’re part of the sandwich generation, having a money management plan is crucial.

Everyone knows that raising kids can put a serious squeeze on your budget. Beyond covering day-to-day living expenses, there are all of those extras to consider—sports, after-school activities, braces, a first car. Oh, and don’t forget about college.

Add caring for elderly parents to the mix, and balancing your financial and family obligations could become even more difficult.

“It can be an emotional and financial roller coaster, being pushed and pulled in multiple directions at the same time,” says financial life planner and author Michael F. Kay.

The “sandwich generation”—which describes people that are raising children and taking care of aging parents—is growing as Baby Boomers continue to age.

According to the Center for Retirement Research at Boston College, 17 percent of adult children serve as caregivers for their parents at some point in their lives. Aside from a time commitment, you may also be committing part of your budget to caregiving expenses like food, medications and doctor’s appointments.

Budgeting tips for the sandwich generation include communicating with parents.

When you’re caught in the caregiving crunch, you might be wondering: How do I take care of my parents and kids without going broke?

The answer lies in how you approach budgeting and saving. These money strategies for the sandwich generation and budgeting tips for the sandwich generation can help you balance your financial and family priorities:

Communicate with parents

Quentara Costa, a certified financial planner and founder of investment advisory service POWWOW, LLC, served as caregiver for her father, who was diagnosed with Alzheimer’s disease, while also managing a career and starting a family. That experience taught her two very important budgeting tips for the sandwich generation.

First, communication is key, and a money strategy for the sandwich generation is to talk with your parents about what they need in terms of care. “It should all start with a frank discussion and plan, preferably prior to any significant health crisis,” Costa says.

Second, run the numbers so you have a realistic understanding of caregiving costs, including how much parents will cover financially and what you can afford to contribute.

17 percent of adult children serve as caregivers for their parents at some point in their lives.

– The Center for Retirement Research at Boston College

Involve kids in financial discussions

While you’re talking over expectations with your parents, take time to do the same with your kids. Caregiving for your parents may be part of the discussion, but these talks can also be an opportunity for you and your children to talk about your family’s bigger financial picture.

With younger kids, for example, that might involve talking about how an allowance can be earned and used. You could teach kids about money using a savings account and discuss the difference between needs and wants. These lessons can help lay a solid money foundation as they as move into their tween and teen years when discussions might become more complex.

When figuring out how to budget for the sandwich generation, try including your kids in financial decisions.

If your teen is on the verge of getting their driver’s license, for example, their expectation might be that you’ll help them buy a car or help with insurance and registration costs. Communicating about who will be contributing to these types of large expenses is a good money strategy for the sandwich generation.

The same goes for college, which can easily be one of the biggest expenses for parents and important when learning how to budget for the sandwich generation. If your budget as a caregiver can’t also accommodate full college tuition, your kids need to know that early on to help with their educational choices.

Talking over expectations—yours and theirs—can help you determine which schools are within reach financially, what scholarship or grant options may be available and whether your student is able to contribute to their education costs through work-study or a part-time job.

Consider the impact of caregiving on your income

When thinking about how to budget for the sandwich generation, consider that caring for aging parents can directly affect your earning potential if you have to cut back on the number of hours you work. The impact to your income will be more significant if you are the primary caregiver and not leveraging other care options, such as an in-home nurse, senior care facility or help from another adult child.

Costa says taking time away from work can be difficult if you’re the primary breadwinner or if your family is dual-income dependent. Losing some or all of your income, even temporarily, could make it challenging to meet your everyday expenses.

“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement.”

– Quentara Costa, certified financial planner

When you’re facing a reduced income, how to budget for the sandwich generation is really about getting clear on needs versus wants. Start with a thorough spending review.

Are there expenses you might be able to reduce or eliminate while you’re providing care? How much do you need to earn each month to maintain your family’s standard of living? Keeping your family’s needs in focus and shaping your budget around them is a money strategy for the sandwich generation that can keep you from overextending yourself financially.

“Protect your capital from poor decisions made from emotions,” financial life planner Kay says. “It’s too easy when you’re stretched beyond reason to make in-the-heat-of-the-moment decisions that ultimately are not in anyone’s best interest.”

Keep saving in sight

One of the most important money strategies for the sandwich generation is continuing to save for short- and long-term financial goals.

“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement,” financial planner Costa says. “While the intention to put others before ourselves is noble, you may actually be pulling the next generation backwards due to your lack of self-planning.”

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Making regular contributions to your 401(k), an individual retirement account or an IRA CD should still be a priority. Adding to your emergency savings each month—even if you have to reduce the amount you normally save to fit new caregiving expenses into your budget—can help prepare you for unexpected expenses or the occasional cash flow shortfall. Contributing to a 529 college savings plan or a Coverdell ESA is a budgeting tip for the sandwich generation that can help you build a cushion for your children once they’re ready for college life.

When you are learning how to budget for the sandwich generation, don’t forget about your children’s savings goals. If there’s something specific they want to save for, help them figure out how much they need to save and a timeline for reaching their goal.

Ask for help if you need it

A big part of learning how to budget for the sandwich generation is finding resources you can leverage to help balance your family commitments. In the case of aging parents, there may be state or federal programs that can help with the cost of care.

Remember to also loop in your siblings or other family members when researching budgeting tips for the sandwich generation. If you have siblings or relatives, engage them in an open discussion about what they can contribute, financially or in terms of caregiving assistance, to your parents. Getting them involved and asking them to share some of the load can help you balance caregiving for parents while still making sure that you and your family’s financial outlook remains bright.

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Affording a Second Child: How to Make Your Budget Work

If you’re welcoming a second child, your spending and savings habits may need a tune-up.

Having kids is anything but cheap. According to the USDA, families can expect to spend an average of $233,610 raising a child born in 2015 through age 17—and that’s not including the cost of college. The cost of raising a child has also increased since your parents were budgeting for kids. Between 2000 and 2010, for example, the cost of having children increased by 40 percent.

If you’ve had your first child, you understand—from diapers to day care to future extracurricular activities, you know how it all adds up. You’ve already learned how to adjust your budget for baby number one. How hard can it be repeating the process a second time?

While you may feel like a parenting pro, overlooking tips to prepare financially for a second child could be bad news for your bank account. Fortunately, affording a second child is more than doable with the right planning.

If your family is about to expand, consider these budgeting tips for a second child:

1. Think twice about upsizing

When asking yourself, “Can I afford to have a second child?”, consider whether your current home and car can accommodate your growing family.

Think twice about upsizing your car or house if you're concerned about affording a second child.

Kimberly Palmer, personal finance expert at NerdWallet, says sharing bedrooms can be a major money-saver if you’re considering tips to prepare financially for a second child. Sharing might not be an option, however, if a second child would make an already small space feel even more cramped. Running the numbers through a mortgage affordability calculator can give you an idea of how much a bigger home might cost.

Swapping your current car out for something larger may also be on your mind if traveling with kids means doubling up on car seats and stowing a stroller and diaper bag onboard. But upgrading could mean adding an expensive car payment into your budget.

“Parents should first decide how much they can afford to spend on a car,” Palmer says.

Buying used can help stretch your budget when you’re trying to afford a second child—but don’t cut corners on cost if it means sacrificing the safety features you want.

Families can expect to spend an average of $233,610 raising a child born in 2015 through age 17—and that’s not including the cost of college.

– USDA

2. Be frugal about baby gear

It’s tempting to go out and buy all-new items for a second baby, but you may want to resist the urge. Palmer’s tips to prepare financially for a second child include reusing as much as you can from your first child. That might include clothes, furniture, blankets and toys.

Being frugal with family expenses can even extend past your own closet.

“If you live in a neighborhood with many children, you’ll often find other families giving away gently used items for free,” Palmer says. You may also want to scope out consignment shops and thrift stores for baby items, as well as online marketplaces and community forums. But similar to buying a used car, keep safety first when you’re using this budgeting tip for a second child.

“It’s important to check for recalls on items like strollers and cribs,” Palmer says. “You also want to make sure you have an up-to-date car seat that hasn’t been in any vehicle crashes.”

3. Weigh your childcare options

You may already realize how expensive day care can be for just one child, but that doesn’t mean affording a second child will be impossible.

A tip to prepare financially for a second child is to weigh your childcare options.

Michael Gerstman, chartered financial consultant and CEO of Gerstman Financial Group, LLC in Fort Lauderdale, Florida, says parents should think about the trade-off between both parents working if it means paying more for daycare. If one parent’s income is going solely toward childcare, for example, it could make more sense for that parent to stay at home.

Even if this budgeting tip for a second child is appealing, you’ll also want to think about whether taking time away from work to care for kids could make it difficult to get ahead later in your career, Palmer adds.

“If you stay home with your child, then you’re also potentially sacrificing future earnings,” she says.

4. Watch out for sneaky expenses

There are two major budgeting tips for a second child that can sometimes be overlooked: review grocery and utility costs.

If you’re buying formula or other grocery items for a newborn, that can quickly add to your grocery budget. That grocery budget may continue to grow as your second child does and transitions to solid food. Having a new baby could also mean bigger utility bills if you’re doing laundry more often or running more air conditioning or heat to accommodate your family spending more time indoors with the little one.

Gerstman recommends using a budgeting app as a tip to prepare financially for a second child because it can help you plan and track your spending. If possible, start tracking expenses before the baby arrives. You can anticipate how these may change once you welcome home baby number two, especially since you’ve already seen how your expenses increased with your first child. Then, compare that estimate to what you’re actually spending after the baby is born to see what may be costing you more (or less) than you thought each month. You can then start reworking your budget to reflect your new reality and help you afford a second child.

5. Prioritize financial goals in your new budget

Most tips to prepare financially for a second child focus on spending, but don’t neglect creating line items for saving in your budget.

Sunny skies are the right time to save for a rainy day.

Start an emergency fund with no minimum balance.

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“An emergency fund is essential for a family,” Palmer says. “You want to make sure you can cover your bills even in the event of a job loss or unexpected expense.”

Paying off debt and saving for retirement should also be on your radar. You might even be thinking about starting to save for your children’s college.

Try your best to keep your own future in mind alongside your children’s. While it feels natural to put your children’s needs first, remember that your needs are also your family’s—and taking care of your future means taking care of theirs, too.

“Putting money aside when you’re expecting can help offset the sticker shock that comes with a new member of the family.”

– Kimberly Palmer, personal finance expert at NerdWallet

The key to affording a second child

Remember, the earlier you begin planning, the easier affording a second child can be.

“Putting money aside when you’re expecting can help offset the sticker shock that comes with a new member of the family,” Palmer says. Plus, the more you plan ahead, the more time you’ll have to create priceless memories with your growing family.

Discover Bank, Member FDIC

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Source: discover.com