Recently I read an article on the Sydney Morning Herald about the cost of paying for private education for your children. They aren’t getting any cheaper that’s for sure. Regardless of whether you want to send your children to private school, saving money early is the key to having enough funds to base your decisions not on financials but instead on the best possible outcome for your children.

Here is my savings plan for my future children, which starts as of right now.

I am going to start saving now

As of today, I am going to put away $50 per week into a high interest savings account that is exclusively for my children’s education. Whether it is books, private schools, public schools, school clothes or simply stationary – my goal as of today is to dedicate a small portion of my money towards my future children.

Starting to save money now means big future returns

So what does saving $50 per week mean? Assuming I am 10 years away from having children enter high school, here is what the savings will mean for me (assuming an interest rate of 5%)

• After two years I will have saved $5,466.13
• After five years I will have saved $14,761.30
• After seven years I will have saved $21,779.10
• After ten years I will have saved $33,712.91 and earned over $7,712.91 in interest.

What if we start getting a bit creative with the savings amount?

Imagine what $75 or $100 per week could do? You might not only have enough money saved for their education, you may also have a little left over to give your children well rounded trips overseas with the family to educate them above and beyond the school system.

This is nothing new and many of you will just say ‘DUH!’ – but my biggest fear is that one day I will have kids and be deciding where they should be going to school only to be constrained by not having a dollar in my savings account for them.

Thinking ahead means I hope to avoid this situation and leave them with the best possible decision on where they go to school based on merit, not financials.

Budgeting and dieting are often spoken of in the same breath. More often than not, what’s good for your hips (as well as your belly, thighs, and butt) is also good for your hip pocket (or, to as a wise woman, modern-day bard Shakira said, your ‘hips don’t lie’).

Improving the state of your body and your personal finances takes some discipline, but with by cutting out a few everyday expenses you can go a surprisingly long way towards tightening up your budget while trimming the fat (literally!)

Store lunches

Most of us know that shopping when you’re hungry is a bad idea. Nobody wants to end up with a trolley full of Nutella, Coco Pops and Pop Tarts. The same idea applies to your work lunches. If it gets to lunch time and you’ve got nothing packed, you’re likely to buy something that’s overpriced and unhealthy. If you get sick of sandwiches, or you’re afraid of your colleages making fun of you because you don’t eat your crusts, then make some extra dinner the night before and bring leftovers. It’s much easier to look forward to a bowl of leftover curry than a tuna sandwich.

Coffee

Cutting down on coffee, and the precious caffeine it offers, is something that takes a lot of willpower, but pays off highly. Seeing as getting out of bed in the morning can be nigh on impossible without coffee, picking up a percolator or coffee press, rather than buying takeaway every morning, will save you a lot in the long run. And if you take sugar with your coffee, cutting down will do good things for the belly.

Sports drinks

Since before even the days of the ancient Greek Olympics, humans have had access to a thirst-quenching, calorie-neutral miracle liquid. It’s called water. Sports drinks are an expense that can be very easily cut from your consumption, and doing so will save both your body and your teeth from the high sugar content they contain.

Anything near the register

As a rule of thumb, if you’re in a store and an item is stocked anywhere near the register, then it’s something you can afford to go without. Little purchases like chocolate bars add up, can come to form a huge hole in your budget, and add a lot to your waistline. Bring an apple from home instead, it’ll give you more energy and keep you full for longer.

If you’re going to go for it, then go for it

It’s human nature to want to treat yourself or someone else occasionally, which means that you should carefully factor treats into your budget. If you don’t, you’re more likely to lash out and waste your good work with an impulsive buy, or an eating binge.

Treating yourself to a fortnightly dinner outing, and making an occasion of it, is much better for you than buying fast food a few nights every week, and won’t end up costing you any more. Likewise if you’re a chocolate fan, don’t cut it out completely, but try dark chocolate instead of milk chocolate. It’ll take less of the dark stuff to satisfy any pangs of chocolate longing, and as a bonus, it’s also an appetite suppressant.

For more information on losing weight, visit our friends blog on how to lose weight fast.

Reality Versus Perception

According to an article in the Huffington Post, Baby Boomer parents almost universally expect their children to be as financially successful as they are, yet don’t expect it in the near future. Indeed, about 41% of parents are supporting their grown children (between 23 and 28) in some financial sense and 30% don’t expect them to reach financial independence by the age of 30. Conversely, 86% of Baby Boomer parents say they were financially independent by 25. I’d love to claim rose coloured glasses on this one, but the reality is that my parents, like most people I know, were married by my age. They had bought a house, they both had jobs and were looking to start a family. It is, without a doubt, more independence than I could claim I or any of my friends have.

Why The Bounce?

Why kids are staying home, or returning home, is no real mystery. Debt from university, tight job market, a need to save a house deposit. The younger generations are a curious mob- outwardly, so fiercely proud of our independence, inwardly so happy that our Mums still put leftovers in takeaway containers for us. It is a growing trend, however, and one that can have a significant financial effect on parents.

What’s The Cost?

According to the Huffington Post, 85% of Baby Boomers are concerned about their financial security. 29% may never retire, and 22% fear they will outlive their retirement savings. Doesn’t sound quite the demographic to be able to have additional derivatives from their income. And on top of that, the survey the Post draws on from Charles Schwab found that 64% of parents believe their kids are not concerned about the cost of the financial burden on their parents.

What’s The Answer?

The answer doesn’t to be a barred door. Letting your kids crash in their old rooms is the natural thing to do, and it doesn’t necessarily have to cost you any money. As long as you are clear with them that they pay for petrol, contribute to food costs and will certainly not be getting any spending money. Your kids need to learn- or should understand- that you worked hard for your standard of living, and they will have to as well. Once you move out of home, the costs of ready-made meals become apparent. How quickly your finances drain when you eat out 5 nights a week, or buy copious amounts of wine, is a shock but a necessary one. Even if they are living with you, they’ll need to start appreciating those facts- as I know appreciate the costs associated with general warmth in the home. Retirement saving is inevitably the most important thing at this point in time, and your children need to understand that. Else they end up being sandwiched themselves, and having only themselves to blame.

After I picked the poor man up off the floor, we started worrying about how we would manage financially in the months ahead.

It is now several weeks later we’ve started our 7 month saving plan which will allow me to take 6 months minimum off work without too much suffering. However this experience has thus far demonstrated to me exactly how much money I was spending on naughty little luxuries.

Of all the things I loved to do of an afternoon, my favourite was to make a cheese plate, buy a bottle of wine and meet up with my girlfriends for a chin wag. Oh how I can no longer do that! No soft cheeses, no alcohol, minimal caffeine and after the past four weeks I have saved over $100 in my grocery budget.

Your spending should naturally drop

Instead of my $15 bottle of wine I am buying a $1 bottle of lemonade. Instead of my $15 cheese plate I take a $3 dip and a box of $2 crackers. Instead of a $4 coffee every morning I make an instant decaf coffee at home and drink it on my way to work. I don’t buy extravagant breakfasts on the weekend as I used to, the most I can handle is dry toast and water before 10am anyway. So I treat myself to a $20 foot massage once a fortnight, and even with that small luxury I’m still spending less than I used to on brunch with my friends.

Substituting is the key to saving

The key point for me during this time is that by simply substituting a few items in my regular routine I could stand to save thousands of dollars over the course of a year. Have a think about what activities you participate in where you could make a substitute to make a saving. For example; buying generic products instead of name brand; choosing water with a dash of cordial instead of juice; going for a walk instead of going to the gym; using takeaway food containers to store left overs instead of Tupperware; taking public transport instead of driving.

The concern of living on only 1 salary

In seven months we will be living on 1 ½ salaries for 6 – 12 mths and that has also struck us with fear. As such we have started a savings account and are putting $200 a fortnight into it as a contingency to help us through the months following birth. I thought initially that finding $200 a fortnight would be difficult, but there are two principles that have made this an easier task for me; firstly, the $200 comes direct out of my pay, before any bills are paid, before I whittle it away on something silly, I save for our baby first.

Secondly, by using the substitution principle in my daily activities I have found the additional $200 a fortnight in my existing budget. This contingency fund is also invested in a high interest online savings account at 5% pa, so at the end of 7 months we should be looking at over $3000 of savings to be used in case of emergencies. If (touchwood) we don’t require these funds it’s also pretty good start to an education fund for the little one, yet another successful substitution!

So are there hobbies, unlike horse-riding and professional go-karting, that won’t require you both to get extra jobs so as to afford them?

Music

Music can be an expensive hobby. The part where the kid asks for a grand piano for instance. Or the bit where your child claims that the violin you bought them “isn’t their instrument” and they’d prefer to be learning the tuba. While that can happen, it is one of the most gratifying and successful of hobbies and it needn’t be too expensive. Buy a really cheap guitar or borrow one from a music school. Get a harmonica, or a melodica.

Do not, under any circumstances get a recorder, they’ll inflict that on your during school term. Save yourself for the time being.There are enough music geniuses around in local high schools, it’s not hard to find one to teach your kid some licks and they won’t charge too much money. It’s like baby-sitting, a hobby and party trick all in one.

Astronomy

This may or may not turn into an article about things that I like doing, but I’m going to persevere. Astronomy is a fantastic hobby, although you might end up spending hours up, late at night, staring into inky darkness. And it can get expensive. But to buy a book on stars and a cheap telescope, or binoculars, is no huge cost and can be the start of a great passion. Let’s face it, you’ll probably end up out there, getting more excited than your five year old about Venus.

Making Clothes

Take dress-ups to the new level. For all the old clothes that no one wants to try on anymore, why not cut them up and make something new and fabulous? It costs nothing- you can print off tips or prints from the Internet and you already have materials, and for fashion-conscious kids, it can provide hours of entertainment.

Chances are it’ll be something that their grandmothers can help them with as well, and provide something to fill baby-sitting hours.

Veggie Garden

While it might take a bit of work on your behalf initially, and a small outlay for herbs and plants, a vegetable garden is the perfect hobby for boys and girls. They can plant whatever they want (within reason) and are wholly responsible for it’s upkeep. Start with easy plants like tomatoes. It gives kids a chance to get entirely muddy and play with the hose without getting on your nerves. Plus, you’ll get home-grown veggies provided they don’t kill them with too much love.

Magic Tricks

It doesn’t take anything but a pack of cards and lot of patience, and you can become a pretty classy magician. Point your child to magic tricks online, equip them with some cards, and soon enough they’ll have plenty of wild and wacky things to practice. And once they’ve conquered that, get them a juggling book from the library, three juggling balls and you won’t see them all summer.

Eating right

Is meant to cost more right? Well, in some ways it does. If you’re eating out, for instance, then MacDonalds is technically cheaper than a salad. But does MacDonalds really fill you up? Or are you left still grazing? In which case, it probably ends up costing you more. Healthy food has lower GI, which means it keeps you full for longer.

Which means you eat less and spend less. Sounds like a win-win.

There are plenty of ways to save money on a healthy diet- eat less meat for starters. Buy in bulk, and locally. Spend your Saturdays at the local growers’ markets and find the best bargains for food that is produced with love. Growing your own vegetables is another fantastic way to save money and have access to fresh produce.

If you can cut junk food from your diet, you’ll end up saving a lot of money. 3 o’clock chocolate bars, soft drinks and sausage rolls- they all aren’t hugely expensive until you add how much you have spent on them weekly. And they’re doing nothing for your health, mood or zest for existence.

Eat out less

Eating out is great. It’s nice to have a change, and a reason not to have to cook. Or to spend time with loved ones in a special local restaurant. But it costs a lot of money, and can often not be the healthiest option.

As anyone who has worked in hospitality would know, even the healthiest recipes can have hidden ingredients like salt, oil or preservatives. It’ll save your pocket and your diet if you can limit eating out to special occasions.

Move

I’m sure we’ve all heard a million times how great exercise is, so I’ll spare you the same old. We all know we should do it, and if we can go for walks or swim in the beach, then we’ll save money as well. It’s really pretty awesome. Enough said already.

Quit

A painful one I know, and one close to the bone for me as well, but smoking is sucking your finances and your health dry. Quit now, and save yourself a lot of money before the end of the year. Sit down and work out how much you spend on the habit, and think about what you could be spending your money on instead.

De-car your lifestyle

As soon as I have an access to a car, I use it at every opportunity. But my habit costs me money,, so with a bit of planning, it’s not hard to see how I can reduce my dependence on the gas guzzler.

Riding a bike or walking will make you feel great, and it’s just so free it hurts, Public transport will save you a fortune, even if it does take a bit longer to get to work every day. It’s healthier for you, the environment and your finances.

“You don’t make friends with salad”

But you do make enemies by filling the office with the smell of deep fried chips, scallops, sausage rolls, curried lamb takeaway, not to mention hurt your waistline as well as your back pocket. So what’s the alternative? How about a home-made wrap, zucchini slice for lunch? If you buy the ingredients for a tuna salad wrap, it will cost you around $8 for a week of wraps.

Zucchini slice costs around $6 to make at home and will last a week’s worth of lunches. Or microwave scrambled eggs for breakfast at $2-$5 a dozen? Do your research and be pro-active, if you prepare your meals ahead of time or better yet can prepare them at work, you’ll be well on your way to saving money and losing/ maintaining a healthy weight.

Join a food co-op

A food co-op is just a group of people who buy a bulk lot of meat and/or vegies and divide the cost among the co-op members. Do a search in your local area to see if one of these exist, if not – why not start your own? If you or a friend can spare an hour once a week to take orders and buy bulk lots of food, there are huge savings to be made. If your household is like mine where fruit sits on the bench till it’s a funky shade of purple, splitting 5kg of apples between 5 households and saving up to $2 a kilo is only one of the benefits to be made.

Choose a diet where you actually get to eat

If I had nothing to eat each day and only drank fluids I’m sure I’d lose a dozen kilos easily within a fortnight. I’m not sure about the 6-pack abs or bronze tan that the fad diets imply are a direct result of drinking their shakes though. A long time ago in primary school Healthy Harold taught us all about the food triangle.

To this day no better balance has been put forward by dieticians and I’m sure that’s because it works to keep us healthy. Have a balance of grains, fruit, dairy, meat and vegies each day. Not only are they good for you, but the raw products are very cheap to buy. Get creative and plan some meals using a mix of all these food groups.

Healthy takeaway

In the last five years there has been a lot of pressure put on fast food giants for healthier options and not only have they responded, but the prices are still reasonable too. Now this is still ‘fast food’ and I’m not recommending that you should have this as breakfast, lunch and dinner, but if you do need a night off cooking there are many fast food restaurants now where you can get a healthy meal for two for under $15.

Plan your meal choice before you go out and take the equivalent cash out with you – this will save you on any impulse purchases when the wonderful smells try to tempt you out of your money diet.

Pot luck dinners

My friends have been very good to me over the years and I am thankful they have put up with my incessant whinging about diets and money. One of the many ways they helped me in both areas was by taking it in turns to host dinner. Each Sunday we take it in turns to host dinner in our homes, whoever is the host for the night makes dinner for 6 people that is courteous to any particular diet we may be on at the time.

Last month I was trying out the Atkins diet and made broccoli chicken with parmesan and low carb jelly and cream for dessert. This cost me a total of $22 for 6 people and the following week I passed on an Atkins friendly recipe to the new host. Currently we have a friend on the CSIRO diet, the next Sunday dinner will be CSIRO friendly.

There are also many other wonderful diet programs and weight management programs with shakes you drink to shrink which set you back anywhere from $60-$100 per week. So aside from the gym, personal trainer, shakes, weigh-ins how else does one tackle this healthy-life concept without having to sell a kidney?

Unusual places

Let’s start at the library! Yes that’s right, you can lose weight in the library! There are dozens of books with diet plans, cookbooks, exercise books and DVDs that show you what you can do in the privacy of your own home and best of all they’re free (just remember to return them…fines cost money). Incidentally if you walk to the library and carry the books you can burn anywhere from 100-300 calories (depending on how far away your local library is!)

Have a look in the pantry

You’re kidding right? How do I get fit by looking at food? Have you got tins in there? A tin of tomatoes weighs approximately 400gms and two of them make excellent hand weights. Have you got a bag of spuds? Put a 2kg bag in a backpack and you have a medicine ball – no throwing this one though! Having healthy options in the pantry and having any junk well out of sight also helps maintaining a healthy weight

Read labels when shopping

Before I go shopping I plan a week’s worth of food out from one of the diet plan books I’ve borrowed from the library. I write a list of all the ingredients I need and then as I do the grocery shopping I look at the price first and then look at the labels on the back. I’ve found some of the more expensive brands also contain more preservatives, but some of the cheaper brands contain more carbohydrates, so depending on which diet you’ve chosen to follow, always check the labels.

Exercise

Check with your local community group what’s on offer. My local community group has free Wednesday morning pilates. The TAFE also runs yoga, belly dancing, Zumba and boxing classes at around $90 for 10 sessions. Do you have friends who want to get fit and lose weight too? Going for a run/walk together instead of the usual evening drinks can be just as social, beneficial to both of your health and best of all is free!

Do you like dogs? Place an ad in your local classifieds as a dog walker and get paid to exercise (check any licensing, insurance requirements with your local council first). If exercising at home is your preference why not borrow a DVD from the library, just make sure you have plenty of space, I had to bury a lamp after my Zumba DVD…

IF you really must join the gym

Why not look at our article on getting a cheap / discounted Fitness First membership? Can’t hurt to try and bargain a better price with them.

http://www.savingsguide.com.au/fitness-first-cheap-gym-memberships/

But that doesn’t mean I have lost all hope of raising children (eventually) that cost the earth. I’m not saying that Christmas will be a one day cessation of back-breaking child labour, but there are a couple of pointers I have found in my researchers (Nine MSN Money and … to be exact) that I thought I would share with y’all, whether you have children, are expecting or haven’t thought about it yet.

Food shopping is not a family exercise

I was a master at this one. The sad eyes, the trembling lip and the finger, outstretched, pointing at a chocolate bar or strawberry milk or whatever. It’s not that I really wanted it, and I would have existed quite happily without it, but now I had seen it, I needed it.

Avoid this situation at all costs, because those mid-supermarket screaming matches are unpleasant for every one involved. Grocery lists are your saviour, so go at a time when you can stick to it. This means you can audit the health level of the food entering your home as well.

No name brands

There is an odd trajectory- when your child is young, brand names mean nothing to them. Then they go through this horrible decade or two decades where brand names are all that matter, and then come out the other end distinctly uncaring once more.

I like Alison Tait’s suggestion of making them pay the difference. If you were happy to spend $30 on jeans, and they can’t live without a pair that costs $100, don’t front up the extra money. Let them save and cover the costs- that way you are not costing yourself a bucket, and you’re teaching them a good lesson in financial goals and denial at the same time.

Check out the freebies

My parents took my younger brothers and I to Europe when we were kids (you see now how easily I have cost a million dollars). Obviously we were expensive baggage, but not in an entertainment sense. People working at art galleries, train stations, the occasional petrol station (a long story) would trip over themselves to give us free tickets. Maybe it was the blue eyes and pathetic expressions, but it works in Australia too. There are tones of free things organised for kids throughout the year- capitalize on them.

Yes Yes Yes No

I can’t say no, it’s a gift I plan to acquire before having children. If you have children, saying no is important. Money is not infinite, and the sooner they grasp that thought, the happier their lifelong finances will be. In the Tait article, she mentions how children can sometimes think that cash is simply dispensed by an ATM, with no thought as to how you earn it.

I’m not suggesting I’ll be giving personal finance advice to my toddler in between Sesame Street and Play School. But an awareness of the value of money, and the work ethic required to earn it, would be two lessons I would hope to teach my kids quick smart.

How have you saved money while raising your kids?

Organise

It’s not the first thing you think of. First, there are the excited calls to parents/ friends/ next-door neighbours/ anyone. Then there’s the whirlwhind of names, thoughts of redecorating, realization of the horror of morning sickness and a lot of general excitement.

Once all that is settled, however, its time for decisions about who you want to see about having a child and who you want to deliver it. Things are currently in flux in Australia, with legislation regarding homebirth currently being debated in the Senate. Public care should be entirely free, unless you need to cover the gap if your doctors don’t bulk bill.

If you go private, either with an obstetrician or midwife, you will have to pay for it and it can be expensive. If you have insurance, that should cover you to a large extent if you are going through hospitals. If you would like a midwife, you will probably have to go through independent midwifery and that will probably not be covered. Insurance for midwives is at the centre of the current argy bargy, so hopefully things will improve one day soon.

Work out

Since last year, things have improved for women requiring maternity leave. Your employer should be providing it as long as you are a permanent part-time or full-time worker. The advice floating about it that you can’t bet on being able to work every day of your pregnancy until your wheeled off to a bed or birthing pool. Morning sickness and fatigue makes the working week difficult, so leave some allowances in your budget.

Wear out

Who would have thought- all those years you’ve been longing for some new clothes, and now you have to buy ones that you can only wear for short periods of your life. Some clothes are capable of taking a pregnant belly, and ask the people around you (after all, most women probably have lots of clothes they can’t wear either). Stuff from K-mart usually looks nice and doesn’t break the bank. I can’t wait- some of it looks so comfortable but I don’t feel like I can justify wearing it until I actually am pregnant.

Know your future plans

There are benefits offered by the government for parents, or parents with small children. Make sure you find out what they are. Ensure that you’ve thought about childcare costs, and where you might like to send your child.

Treat yourself

You’re pregnant, so if there are a couple of spoilt moments here or there, then what’s the fuss? A friend of mine swears by massage, another by almond croissants. After all, you have a doting partner who is caught in a hilarious bind of half-joy, half-panic, and he’ll probably do anything you ask. Now is the time to take advantage of his unusual willingness to please. Eat organic, stay away from deli meats and revel in the new Earth Mother that is you.

What did you find were unexpected costs when you or your partner was pregnant?