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Book Excerpt

Savings are a family affair Add to ...

Two incomes don’t necessarily mean a larger bank account for the family when you consider additional costs associated with full-time work. To gauge if one of your incomes is helping your family’s bottom line, take your income and then subtract the following costs to see what you’re really bringing home each month.

• Childcare costs. This one is a biggie. Childcare costs constitute the largest spending category for working parents. If you’d like an alternative to daycare, make a list of people you trust to take care of your children and approach them with a plan to see if they could care for your kids. Or approach your employer to see if options such as flexible schedules, telecommuting or job sharing are available. If flexible schedules are possible, try to overlap your spouse’s schedule and yours as much as possible, so childcare costs are kept at a minimum. Unless your job pays well, childcare costs alone might prevent you from returning to work full-time.

• Clothing costs. If you’re working in any sort of office environment, the price of clothing will be higher compared to more casual work, but you can save by utilizing the money saving tips in chapter eight.

• Dining out and lunches. Try your best to brown-bag and take last night’s leftovers for lunch if there’s a microwave available for reheating. Otherwise, these meals out will cost you big bucks over time. Add these costs to your list.

• Transportation. It might be extra gas money to get you back and forth every day. Or, it might be a public transportation pass or parking charges once you arrive at work. Add on any additional transport costs to your overall list of expenses.

If you’ve discovered that your income after additional costs barely exists, consider benefit packages including medical insurance and retirement plans and then discuss if it makes sense for both of you to work. This will obviously need to be a well thought out decision, but having the facts at hand might make it an easier decision overall. Cold hard numbers can take the emotional impact off almost any major decision a family needs to make. You might also find you can get just as much financial benefit from working only part-time (less childcare needs and fewer lunches out), if your family really needs the secondary income.

Savings Ideas for New Parents

That adorable little bundle of babyhood in your arms is enough to melt any heart, especially yours. Unfortunately, your finances may be melting just as fast at the additional strain of baby-related costs. Here are a few savings tips from moms in the know. Keep in mind that frugality is more about what you don’t buy, rather than what you do purchase—a frugal mind-set means getting by with less. Advertisers work overtime to get new parents (or grandparents) to spend on unnecessary stuff. What babies really need is unconditional love, warmth and comfort, food to fill their tummies, and some clothing and diapers.

• Clothing. Infants and toddlers grow out of clothes lightning fast! Plus their clothes go through some serious wear and tear with spills, stains and frequent laundering. So, be open to secondhand clothing—either at secondhand shops or by receiving hand-me-downs from friends and family. Secondhand is an especially nice option for special-occasion outfits that will be worn only once or twice. As soon as your child outgrows an outfit, do one of four things with it:

  1. Put it in storage for a younger sibling if you plan to have more children.
  2. Give it to a friend or family member for her child.
  3. Take it to a consignment shop for resale.
  4. Put it aside for a garage sale. If you plan to have a garage sale, try to have one every year. The clothes, toys, furniture and other baby accessories will still be in style, so you will get more money for them and they will sell faster.

• Diapers. Some parents swear by cloth diapers and insist that they’re better for the environment and for the baby. And they can be easier on the pocketbook. But, be forewarned that they also mean a lot of additional work—extra laundry duty, for one. If you’re going the route of disposable diapers, it’s more important than ever to learn to shop the sales. A great sale price (plus a money-saving coupon—which often can be found on a manufacturer’s Web site) can easily save you 30–40 percent off the regular retail cost. Many moms also say that it’s a newcomer’s mistake to fall for the “pricier-the-diaper-the-better” mentality. Try some of the less expensive versions and save 40 percent right there and then. This is one product that might be far less to purchase when buying in bulk. Visit your local big box stores (such as Costco in the U.S.) and compare the price per diaper versus buying at the supermarket or drugstore.

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