How Par­ents Can Cre­ate House­hold Budgets

Riverbank News - - MANTECA CENTENNIAL -

Rais­ing a fam­ily is no small feat. Along with the love and joy, there are some ob­sta­cles that must be sur­passed, in­clud­ing the fi­nan­cial in­vest­ment re­quired. A 2015 re­port from the Depart­ment of Agri­cul­ture found that mid­dle-in­come mar­ried cou­ples would spend an es­ti­mated $233,610 to raise a child born in 2015. Par­ents who find that fig­ure high should know that it does not in­clude costs in­curred af­ter chil­dren turn 18. So par­ents could be re­spon­si­ble for nearly a quar­ter mil­lion dol­lars be­fore they ever write a col­lege tu­ition check. The high cost of rais­ing a child only em­pha­sizes the im­por­tance par­ents must place on cre­at­ing house­hold budgets. A few dol­lars put away here and there can add up to sub­stan­tial sav­ings over the years. Hous­ing Hous­ing is many fam­i­lies’ most sub­stan­tial monthly ex­pense. When de­ter­min­ing how much they can af­ford to pay for hous­ing, fam­i­lies may come up with a fig­ure they’re com­fort­able pay­ing for their monthly mort­gage. But it’s im­por­tant that par­ents, par­tic­u­larly those who have never owned their own home be­fore, also take util­ity costs into con­sid­er­a­tion be­fore sign­ing their mort­gage agree­ments. Util­ity costs for sin­gle-fam­ily homes can dwarf the cost of util­i­ties in apart­ments. The U.S. Bureau of La­bor Sta­tis­tics’ Con­sumer Ex­pen- di­ture Sur­vey rec­om­mends peo­ple mak­ing hous­ing budgets com­mit 58 per­cent of to­tal hous­ing costs to mort­gage pay­ments, 21 per­cent to util­i­ties, just over 9 per­cent to fur­nish­ings and equip­ment, and roughly 7 per­cent to house­hold op­er­a­tions. Uti­liz­ing this for­mula be­fore tak­ing out a mort­gage can help fam­i­lies en­sure they are not scrap­ing pen­nies to­gether each month to meet their hous­ing costs. Food Food is another sig­nif­i­cant ex­pense, es­pe­cially for grow­ing fam­i­lies. The BLS notes that the average U.S. house­hold spends just about 13 per­cent of its monthly budget on food. Par­ents who ex­am­ine their spend­ing habits over the previ- ous year can look at how much they’re de­vot­ing to food and find ways to re­duce that fig­ure if it’s well over 13 per­cent. Re­duc­ing food spend­ing may re­quire more savvy spend­ing at the gro­cery store, in­clud­ing shop­ping sales or buy­ing cer­tain items in bulk when it’s ad­van­ta­geous to do so. Trans­porta­tion Par­ents may find this odd, but the BLS re­ports that the average U.S. house­hold spends more of its monthly budget (roughly 17 per­cent) on trans­porta­tion than it does food. Par­ents who want to trim their monthly budgets can opt for more af­ford­able cars and trucks, re­serv­ing their splurg­ing on lux­ury ve­hi­cles for later in life when their kids have moved out of the house. Mis­cel­la­neous ex­penses When cre­at­ing their house­hold budgets, par­ents should leave room for un­ex­pected mis­cel­la­neous ex­penses, such as health­care costs if the chil­dren get sick and cloth­ing and en­ter­tain­ment. With­out ac­count­ing for such ex­penses, par­ents may find them­selves tak­ing on po­ten­tially crip­pling debt in times of emer­gency.

Care­fully con­structed house­hold budgets can help par­ents sur­vive the of­ten ex­pen­sive costs of rais­ing a fam­ily.

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