The new figures regarding how much it costs to raise a child from birth through high school are out, and before you read the figure you might want to sit down or maybe brace yourself against something sturdy.

So What is the Cost of Raising a Child? $291,570.

Don’t panic. Let’s put this into perspective. This amount of money is over a long period of time. Seventeen years of expenses will certainly add up, no matter what the expenses. Take, for example, my daily drive through Starbucks. I usually get myself a coffee and some juice or milk for my kids, so it’s usually a daily expense of around $6. If I do this every day for a week (and don’t splurge on a Venti or a cookie for my kids to split) the weekly expense equals around $42, $168 a month, and $2016 a year. So it may cost me nearly three hundred thousand dollars over seventeen years to raise my child, but when you consider I’m spending around $34,272 over that same period of time just to feed my coffee habit, I think the perspective becomes a little clearer.

In other words, everything costs a lot when you do it for seventeen years straight.

Yes, Children are Expensive

Don’t let the numbers throw you. After all, we all know that diapers and clothes can get quite expensive, and there are some baby items a parent just can’t live without, but there are plenty of ways to curtail these costs. Really, does your child need the most expensive brand of diapers? Have you looked around for FREE Diaper offers or FREE Diaper Coupons? Does your baby really need to sport the latest designer fashions? If you are in a panic over the estimated cost of raising a child, realize that the figure isn’t a promise; it’s just an estimate, and there are ways to reduce these numbers.

You should also keep in mind that the figure varies according to your income level. Parents who have more money tend to spend more money on their kids, so if you have a low income you may never reach the $291,570 figure even though you adequately care for your child for seventeen years. Likewise, if you have an enviable income level and you insist on spending with reckless abandon for your child, chances are you will exceed the $291,570 long before your child’s seventeenth birthday.

Yes, Children are Expensive. Yes, you will undoubtedly spend ridiculous amounts of money on your child at one time or another. Don’t let the numbers throw you into a panic, though. Oh, and don’t fall into the same trap as I have and wind up in the coffee drive-thru every day, because that’s not the smartest financial decision to make, with or without children.

Now that we have two children, my husband and I like to think we’ve figured a few things out. We know how to diaper the kids so that they (usually) don’t leak. We can tell when they’re hungry – and when they’re just acting up because they’re kids. But most of all, we’ve figured out a few ways to save ourselves some money – that don’t include asking the grandparents to buy them all the clothes, diapers and food that they need (although that would indeed be a money saver).

Here are a few of the things we do.

• Save up and make “bigger” items special gifts. We’d love to have a season pass to the zoo and to the local YMCA, but they’re not cheap. For holidays or birthdays, we’ve asked family and friends to give toward these memberships instead of buying clothes or other items. That way, the gift will be used – and appreciated – all year.

• Buy used items. This one is a real money saver for clothing and other items that we seem to go though quickly. Winter coats and other gear are especially nice to buy used, either at consignment stores specializing in baby items or second hand shops. Be cautious, however, when buying used cribs, toys or other equipment – inspect them carefully for signs of wear and make sure all pieces are there. In addition, be sure to thoroughly wash or clean any used item before the kids touch it. Never buy used car seats – you don’t know if they have been recalled or ever been in an accident.

• Buy in bulk. Purchasing diapers in bulk saves money. Better yet, switch to cloth diapers. They cost more up front, but we have saved a great deal of money in the long run with using cloth diapers – especially since we have used them on two babies.

• Make it yourself. Instead of purchasing baby foods in jars, I try to make baby food whenever possible. Steam some extra vegetables and blend them into a smooth puree for baby. Many play items can also be made at home for far cheaper than they cost to buy, such as play dough and finger paints from kitchen pantry items.

• Take advantage of Free Offers! You can find a wealth of free offers, samples, and coupons on the internet. Many sites, especially Babies Online, work hard to bring you the very best free baby deals available. Often times these deals are brought to you with zero obligation.

• Playgrounds are free. While it’s nice to have your own play equipment in the back yard, it’s not truly a necessity. We like to take the kids down to the neighborhood playground – not only is it free, but it’s also a nice way to meet other kids – and parents.

While having kids is by no means cheap, there are some ways to save money. What’s your favorite money saving tip?

When fellow blogger Tamsen Butler mentioned a baby who was getting professional pedicures once a week, my first reaction was: ?Wouldn?t it be better to take that $10/week and put it away for college??

Call me crazy, but I believe it?s never too early to start saving for college! Average college costs for a private, four-year school in 2007 ? 2008 are just under $24,000 (per YEAR), and academic scholarships are getting harder to come by. I know, because my niece and nephew are both entering college as freshmen next semester, with excellent grade.

Here?s a sobering fact? if you forego your $4/day latte habit (assuming you have one), or cut some other luxury out of your budget in order to set aside $4 day, in 18 years (not counting interest) you will have $50K in the bank.

Our baby isn?t even born yet, and this is on my mind. Along with buying diapers, paying off our car loan, saving for a house, investing in cord blood banking? all while maintaining my work-at-home status. Yes, kids are expensive.

My husband and I are both leery of conventional college savings plans, such as a 529 account. If your child doesn?t go to college, for whatever reason, and there?s no one else you?d like to name as beneficiary, you could face hefty tax penalties when you try to withdraw the money for another use.

Once we get past the initial ?first-year? childcare expenses, we will look into other savings and investment options and start a long-term account on her first birthday, if not sooner!

But I have already started a ?upromise? account, which places cash rewards into a college savings account based on purchases I make. It?s the same situation?if our child doesn?t go to college, we would have to name another beneficiary or lose the money. But since we?re not actually investing our own money into the account, we have nothing to lose. If I had to give the money to a relative, or even a close friend?s child, or find a way to donate it to a scholarship fund, I wouldn?t mind.

Granted, the savings doesn?t add up quickly. My sister noted that she received 10 cents in my nephew?s account for buying a bottle of ketchup. But with 19 years of spending ahead of us, I?m expecting we?ll earn enough to pay for books, at least. A whole year of college or even a semester? Eh. I?m quite realistic in my expectations for the program?that would be a lot of ketchup!

But free money for college? Just for shopping at stores and Web sites where I normally shop, buying things I normally buy, and eating at restaurants we love? I?ll take it.

I?d love to hear your investment ideas for college savings. Readers, how early did you start saving for your child?s college education?

Baby product manufacturers, especially makers of formula, frequently offer product rebates. I know I have about three product rebate forms filed away in a folder labeled ‘baby coupons,’ to use when my due date approaches.

According to the writers of the book Baby Bargains, if you check the box marked ‘plan to breastfeed’ on any pregnancy surveys, you’ll get even more formula coupons, rebates and other special offers. In my fifth month of pregnancy, I’ve found this to be true.

Rebates encourage new parents, who may not have developed brand loyalty or preferences, yet, to try specific products. However, four out of 10 people who purchase a product with a rebate available fail to collect the money due to them.

Manufacturers count on this, in fact, and often make rebate submission requirements very stringent. New mothers, with lots on their minds, are especially susceptible to forgetting to mail in a rebate form, sending it in with incomplete information, or missing the deadline. With the high costs of raising an infant, those little rebate checks can add up to significant savings. Make sure you get the money you deserve by following these steps:

• Gather all the information and paperwork required to submit the rebate. This is likely to include the product’s serial number, your original receipt, a UPC cut out from the box, and the rebate form. Make a photocopy of all the paperwork, including the completed rebate form, for your records before mailing. Be aware of rebates that require you to purchase two different products in order to collect the rebate. These rebates can offer even greater savings, but you must purchase both products and submit both receipts and UPC codes to qualify.
• Fill out the form legibly, in blue or black ink if specified. Make sure you include all necessary information.
• Don’t wait until the last minute to mail the rebate. Do it immediately when you return home from the store, so you don’t forget. Additionally, if you make a mistake in your submission, such as forgetting to include the UPC or receipt, there may be time to correct the mistake if you didn’t wait until right before the deadline to submit the form.
• Watch the mail; rebates can take up to 12 weeks to arrive. The envelope is usually small and often looks like junk mail. It helps to write the expected arrival dates of any rebate checks on your calendar; if the check is more than two weeks late, you can contact the company to check the status.

Single mothers – and their children – tend to be criticized in the press. When reports of delinquent children make the news, it’s always mentioned if the child is from a one-parent home.

The single moms I know are all wonderful mothers, and here’s a piece of positive news for single mothers. According to a study in the United Kingdom, single mothers are better at teaching their children the value of money. Single moms are also more likely to involve their children in household budgets and the day-to-day running of the house. Moms in the survey say it’s partly because they want their children to be able to understand why they can’t have a new Playstation game or Bratz doll this month.

Understanding financial matters, such as budgeting, paying bills on time, saving for education and rainy days, and curbing impulse buys, is a very underrated skill for children to learn.

All moms – and dads – can include your children in household budgeting and teach financial skills at some level. For toddlers and young children, parents can explain in the store that candy costs the same as a small toy or a hair bow, and that they only have enough money to buy one of them.

A way to explain saving, is to give them a reward, like a small coin to put in a jar or a sticker to go on a chart, in exchange for helping out with chores, and when they have saved a specified amount, say three, or five, they can use them to “pay” for a treat or an outing.

Is happiness linked to how we spend our money? Apparently yes, according to a recent study published in Science.

And shoppaholics would be surprised to hear the results – spending money on other people is more fun than spending money on one’s self. And, after you’ve spent money on other people, you gain more satisfaction in buying something for yourself.

Is this something new? I don’t think so. Ask moms with little children. I’m sure most of us would rather shop at Baby Gap outlets and toy stores than spend our money in high-end boutiques.

What is new is the effect of the so-called ‘prosocial spending’ – spending money to buy gifts for others and donating to charity. It seems that this type of spending is closely related to an individual’s overall satisfaction with his/her life.

This link between generosity and happiness is not dependent on income. It’s not the absolute amount that translates to happiness – it’s all relative to what you have. In fact, poor people tend to put a higher proportion of their income on prosocial spending than rich people. However, on the average, people tend to allocate about 10% of their monthly budget to prosocial spending, according to the researchers.

Philanthropic acts of donating to charity can make you happy but it’s not the only factor that’s involved. According to surveys, Americans are tops in terms of ‘per capita charitable donations’ but they are not tops when it comes to happiness. Less generous countries such as the Netherlands and the UK have actually much happier citizens.

Sources:

Science 21 March 2008:Vol. 319. no. 5870, pp. 1687 – 1688

Nature News, 20 March 2008