Here's how to still make retirement possible after having kids
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- How to Have Kids and Still Retire on Time By PresenterMedia.com
- This, according to the USDA, is what parents in an urban, Midwest setting will pay extra, per year, once they have a child. •Here’s What The Experts Say…
- • Four years of tuition, room, and board in today’s dollars at a four-year, in-state, public university will run $72,000 • New grand-total = $358,000 •Don’t Forget About College
- •Here’s How You Can Buck The Trend
- • The average American household has 2.3 cars • Of these, at least one is some form of gas guzzler: an SUV, minivan, or pick-up truck. • Apparently, the addition of a child adds $2,200 in transportation costs per year—probably a combination of a bigger car and more driving. •Major Expense #1: Transportation
- There are so many ways to save here: 1. Buy a used hybrid as your only car before having a child. A Prius can very comfortably fit a family of four! 2. Live close to work to make this more practical. Commuting is ridiculously expensive! 3. Bike more as a family for short-term trips: it costs nothing, is environmentally healthy, a great family activity, and encourages a healthy lifestyle. •The KISS Solution to Transportation
- Let’s factor in an extra 200 miles of driving each month (2,400 in a year) and that’s the only increase associated with having a child. With your 50 mpg hybrid and $4.00 gas, that’s roughly $200 per year. One-Year Transportation Savings=$2,000 New Total Cost Over 22 Years=$334,000 *7% of cost shaved off so far •Overall Savings?
- • The total cost for child care can vary wildly. In the rural areas of some states, it can be as little as $3,500 per month. In urban centers in the Northeast, it can run as much as $19,000 per year. • The USDA lumps child care and education (private school tuition) into one, and over 18 years, the average family pays $3,800 per year. •Major Expense #2: Child Care/Education
- • Investigate if it’s feasible for one parent to stay home for the first couple of years. • If that’s not possible, move near grandparents or other family members (aka free babysitters). • Send your kids to the local public school. As a former teacher, I can tell you that parents are every bit—if not more—influential as the specific school your child attends in their future academic success •The KISS Solution to Child care/Education
- Let’s assume you live near family that can help look after the little ones, and send your child to the local public school. One-Year Child Care/Education Savings: $3,800 New Total Cost Over 22 Years: $266,000 *26% shaved off so far Overall Savings?
- If we assume that your child goes to a four-year, public university, the average cost for tuition, room and board currently runs $18,000 per year. Over four years, that comes to $72,000. •Major Expense #3: College
- From Foolish colleague Morgan Housel: • For the first two years of college, have your child take care of their general education needs while attending community college, living at home, and working in their off time. • Then, transfer those credits to your in-state four-year institution, and have your child use the money they earned the previous two years on room and board. •The KISS Solution to College Costs
- Average yearly tuition at a community college runs $6,200 for two years, while tuition at the four-year university will be a total of $17,000 for the last two years. Total College Savings: $49,000 New Total Cost Over 22 Years: $160,000 *39% shaved off so far •Overall Savings?
- • The average American family will save in the ballpark of $1,000 on taxes with an extra dependency exemption • There are also tax credits for child care, but we’ll look past that now. • Kiss those dinners out with expensive alcohol tabs good-bye. • The average married couple with kids under 6 spends $200 less per year at restaurants than they did before they had kids. Keep that habit up as time goes on! •But Wait, There’s More
- • Though you could easily cut back even more on eating out, your savings—including the tax break—would look like this: One-Year Savings: $1,200 New Total Cost over 22 Years: $195,000 •Overall Savings?
- • Live near your family, your job, and your schools— this saves you tons in both transportation and child care costs. • Send your kids to public schools. • In this case, we eliminated 46% of potential costs associated with having kids. • That being said, everyone’s situation is unique, and won’t necessarily mimic these numbers. •Key Takeaways
- If you really want to maximize your retirement, make sure you’re optimizing all the government gives you in Social Security by checking out our special free report: A Simple Social Security Strategy to Take Advantage of a Little-Known IRS Rule •And one more thing…