6 Tips from FreedomPlus to Help Parents Avoid Debt

Managing the cost of raising children can be difficult. The latest estimates from the U.S. Department of Agriculture show that it can cost more than a quarter million dollars to raise a child to age 17. Families can expect that cost to increase significantly when college expenses are added in. Considering how expensive it is to raise a child, it’s no wonder that it can be so easy to get into debt. FreedomPlus has tips to help parents avoid going into debt while managing the cost of raising children.

Keep food purchases within the budget
. After accounting for housing costs, food is the second biggest expense of raising a child. If you spend USDA’s estimate of $1,300 (for a family of four) on food purchases, you can find yourself struggling to meet your other bills and expenses. Decide how much you want to spend on food each month and work to keep your spending within that amount. This may mean more meals at home, eating leftovers, and packing lunches.

Keep your car even after it’s paid off
. While you may want to upgrade your vehicle as soon as you’re done with your auto loan, you’re better off including the extra money in your regular budget. FreedomPlus recommends using those freed-up funds to pay down your mortgage or credit card debt, to make it easier to afford other household expenses, or to build the family’s emergency fund.

Leave some room in the budget for unexpected expenses
. The more people you have in your family, the greater the chance for unexpected expenses. School-aged children may have special school fees or need money for unexpected extracurricular activities or social events. FreedomPlus suggests families include a certain amount of money in the monthly budget for these “surprise” expenses. If the amount goes unspent during a certain month, it can be set aside for another month.

Budget for seasonal clothes and shoe shopping
. Children outgrow clothes quickly and typically need an entire new wardrobe each season. Buy children’s clothing at a reasonable price and consider taking advantage of post-season sales. While you may not need to spend on clothes each month, FreedomPlus recommends allocating an amount each month to children’s clothes. You can put the money in a separate account, then withdraw from it when it’s time to go clothes shopping. That way, a seasonal shopping spree won’t ruin your budget.

Watch out for lifestyle inflation
. As your family income increases, you may feel tempted to raise your standard of living. But, remember that as you upgrade your life – buying a bigger house or car or taking on new monthly expenses – your budget gets tighter. It’s a better financial decision to keep your lifestyle the same, even after a raise, and use the extra money for college and retirement savings, suggests FreedomPlus.

Aim to pay your credit cards in full each month
. Carrying a credit card balance is easy, but it also creates the risk of getting into credit card debt. If you find yourself using credit cards to pay for basic monthly expenses, it’s a sign that you’re spending more than you can afford. FreedomPlus advises families in this situation to reassess their monthly budget to find places they can cut back to keep spending within the monthly household income.

Families who are already dealing with debt may consider professional help if they find themselves overwhelmed and unable to deal with their debt. The American Fair Credit Council (AFCC) may be able to help families locate a professional company who may be able to provide a viable debt solution.

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