Debt Free

As parents, we adore our kids. Well, there was that time with the toothpaste and the spray paint…… Anyway, as much as our little darlings add to our lives, the one, inescapable truth is that they’ll cost a bundle of money over the years. The expenses are unending; food, clothing, medical, school, X-Box 360….you know. You know how I love U.S. Government figures, and here are some more. According to recent estimates from the U.S. Department of Agriculture (Why would they do this study instead of HUD, Dept of Education, or the Social Security Administration??), if your family gross income is $65,000 or over, you can expect to cough up about $250,000 to raise each child between birth and the time they’re 18.

It would be nice to make that number even smaller without taking food out of their mouths, compromising their medical care or education, or foregoing family outings to Disney Land. That being said, many children actually cost their parents far more than that. That’s because the growing trend in America, and probably other countries around the world, is for children to be supported by their parents far beyond 18 years of age. Many parents pay for all or part of their children’s college education and their living expenses while they’re in college. Still other kids just don’t seem to move out until they’re 21, 22 or even later. Parents give these kids autonomy, food and cheap or no rent; what’s their incentive to leave?

If you’re a parent paying for some of these post-adolescent expenses, they can cost you as much as the first 18 years. If your kids are going to college, you could at least hope they’ll get a great job upon graduation. According to a Money Magazine survey taken last month, the most lucrative college degree was Chemical Engineering. Average salaries for recent Chem E grads were $59,361.

For those not able to foot the bill to attend MIT or CAL Berkeley, U.S. News’ top ranked chemical engineering schools, a great choice would be the number 3 school, University of Minnesota in Minneapolis. A year of tuition and fees for the coming academic year, assuming you’re a resident of MN or one of the neighboring states, is about $10,000. To this you’ll have to add all other associated expenses such as books, food, lodging, insurance, car and maybe a few cents for entertainment. Figure you’ll spend about $20,000 for every year junior studies chemical engineering at U MINN. It could easily take 5 years to graduate from such a grueling program, so there’s $100,000.

Here are some ways you can ease the financial pain of your loving children, weather they seek high education or just sponge off you for a while. Tons of stuff has been written about how to save money on your younger kids, from shopping at thrift stores to encouraging hand me downs from friends and relatives. Here’re some ways to save when they’re a bit older.

1 – Save Money on Your Kids – Give them some in depth, personal, financial education. Few high schools offer any sort of education on personal finance, even though one could argue it’s one of the most important life skills, certainly more important to the majority of kids than wood shop or ceramics.

Due to poor results of national personal finance tests given to some of the nation’s high school students last year, this may change in the future. Some legislators are on board with a push to get schools to offer personal finance education. With the impact this could have on our national economy, it would seem logical that more legislators would take up this cause (probably why some are having trouble doing so). In the event this push takes some time to gather momentum, it may be incumbent upon you to give your kids this knowledge on your own. The money they save will be your own.

2 – Save Money on Your Kids – Encourage entrepreneurism in your kids. One way to save money on your kids is to get them to make some, preferably a lot. In addition, this will help tech them money management and business skills that will serve them, and you, later in life. Who knows, they may even do well enough to hire you!

3 - Save Money on Your Kids – Set an example for them to follow. If you’re always spending, guess what? Right, they’ll grow up with those same talents. Instill values in them early on that include fiscal responsibility and saving money. Although that bit of advice may sound like moralistic preaching, it’s actually very self serving. Would you rather they save money, or ask you for some?

4 – Save Money on Your Kids – Teach them well so they stay on the straight and narrow. Again, this may come across as moralistic preaching, but think of how much it can cost you if your little hooligans get in trouble. You could be out a small fortune. Attorney’s fees, fines, court appointed classes, restitution, etc. could all conspire to suck your retirement fund dry.

This is even more important due to a trend toward fining and otherwise legally penalizing parents for their children’s mistakes concerning the law. So even though you may say “If they get in trouble, I’ll make them pay their own court costs and fines”, this won’t matter if the judge fines you. Get them into sports or other activities to keep them out of trouble.