A newsletter of simple ideas #37 -- May 2001
Having A Baby, part 2: Saving Money Raising Baby
In the first part of this article, I described how my husband and I decided that one of us should stay at home and raise our daughter. In this part, I'll go over the tricks and techniques we use to keep our spending low without depriving her. The article is broken into several of the categories mentioned in the USDA report on average spending on children in the US.
Money-Saving Tip:Eat Ethnic. Whether you learn to cook it at home or eat out, you can often save money by looking at authentic ethnic cuisine. The staples in many ethnic traditions are simply cheaper than staples in old-fashioned, down-home American cooking. Rice, lentils, beans, and vegetables of all sorts are much less pricey than the beef that makes up a good portion of the American menu. Spices such as curry, garlic, ginger, clove, cumin, and so on are used well and in quantities that make them affordable. My favorites include Mexican, Indian, Vietnamese (nothing like Pho for a good but cheap meal), Chinese (though it can be really expensive depending on what you order and where), and Ethiopian. |
Housing: In Seattle, housing is extremely expensive and we knew we’d have to make some serious compromises in this category. Before graduate school, we had rented a home in Magnolia, an affluent neighborhood, which was also home to a retired member of Pearl Jam who one day, declared "it’s free money day" and handed out $100 bills to everyone at the coffee shop next to the bank where I worked. I, of course, managed not to be there at the time. It was the kind of neighborhood where the residents referred to the main shopping street as "the village" and the shops that lined the street were all privately owned, without a single chain store in sight.
After graduate school, we moved to Greenwood, a neighborhood behind a Fred Meyer, up the street from an all-ages dance club, where cars without mufflers were the norm and yards choked with weeds held blackened plastic swing-sets that children never played with. Every other house seemed to have one of those white-plastic rocking horses mounted on springs that had rusted to the frame. The neighborhood was safe, though, and we were able to rent a small house for about 25% less than in Magnolia, saving about $200 a month.
Food: I believe this is an area where many families spend far more than they realize every month. When my husband and I both worked full-time, we always packed our lunch for work, but almost never cooked our dinner at home. If we did eat at home, it was usually pre-packaged convenience food that we could have made more cheaply ourselves. Things like lasagna, cookies, and bread; foods that are extremely easy to make at home, but always came from the store. Worse than that, we ate out three to four times a week. Friday night was almost always spent in a bar trying to artificially unwind from the stresses of the week. We would often spend $70-80 on dinner and a bar tab every Friday. When I added up the cost of all those dinners out (including fast food) it totaled more than $700 a month.
Transportation: We needed a new car. The 1978 Chevy Nova with the removable back seat and missing back window we'd driven for years wasn't exactly what most people would consider a child-safe vehicle. Luckily, just as we started the hunt through the want ads, a friend offered us his used Nissan Sentra for $1000. It was 17 years old, but it had been carefully maintained and only had 90,000 miles on it. We ran the risk of having to pay for tons of repairs, but because I knew the maintenance history of the car, I felt confident taking the chance. Luckily, in the year we've had it, we have only had to make one unexpected repair, which ran less than $100. By buying a used car and paying for it up front, we saved the average American car payment of $261.47 every month, as well as the additional comprehensive insurance we would have been required to carry on the vehicle. With just liability coverage, our insurance is a low $40/month.
Clothing: When I first started buying clothes for my daughter, I came up with a policy: I would never pay more than $9 for an item of her clothing. I have broken this rule a few times for things that I felt were either terrific quality or good wardrobe staples, but for the most part, I've been able to accomplish this goal. It has required planning and lots of legwork, but I have saved over $1000 in the last year by sticking to my policy. One of the most useful tools in this category is the internet. For example, at the end of the season Babygap.com marks down their merchandise dramatically. It's the same merchandise carried in the stores, but the selection is far more extensive because they can offer every piece of merchandise that is on clearance...they don't have to worry about floor space. I buy my daughter's clothes one year in advance. For example, when she was 4 months old, I had already bought most of her 12-18 month wardrobe. I have three large plastic tubs with lids that I use to store the clearance clothing I've picked up, and when the correct season rolls around I just bring out the appropriate tub. If she needs additional items to fill out her wardrobe, I buy them on Ebay, or at a local consignment or outlet store. Even if you have an aversion to used clothing, many of the items on Ebay are listed as "NWT", or "New With Tags".
Health Care: As a family we were paying $600 a month for our coverage through an HMO. We had no deductible and our coverage was 100%, but it was costing us $7200 a year. We researched and found that we could buy a policy directly from the HMO with a $500 annual deductible for the baby which would completely cover all of her well-baby visits prescriptions, vaccinations and any other expenses at 80% after the deductible was met. My husband and I could buy policies with a $1500 annual deductible that would cover our prescriptions completely and other expenses at 80% after that. These policies cost us $199/month. We saved $5000 a year, which was money we could have in the bank earning interest to cover potential deductibles rather than enriching the insurance company. Even if we had to pay the full deductible for all three of us every year, we would still have ended up $1500 ahead.
Child Care/Education: With me at home with our daughter, we saved over $8000 a year on child care.
Miscellaneous: This category includes entertainment and reading materials, and once again, the internet proved to be a valuable tool. There are literally hundreds of websites that carry discounted merchandise for children. They also have an interesting habit of going out of business. When Etoys folded, I bought a years worth of toys (worth over $700) for $120. It's also extremely easy to comparison shop at websites like smartthingfind.com and make certain you're paying the lowest price possible. Also, most children's toys are made of plastic these days and don't show wear after use. I often buy used toys, videos, and books through eBay or Amazon.com. The library is also a terrific resource. Every week I check out different videos and CD's for her and then change them the next week. This helps stretch the toys she owns, because she plays with them less often. I also found that parents with slightly older children are usually thrilled to give away the old toys that have been cluttering up their house. Garage sales are one of the best places to pick up toys, books, and videos. No one has been able to tell the toys I've bought at garage sales (once they've been wiped down with a little bleach and water) from her brand-new ones. We are also lucky enough to live 5 minutes drive from the zoo, so we bought an annual membership for $65 and go there whenever the weather is nice enough.
I have invested a tremendous amount of time and energy in finding ways to save money. I cook most of our meals, I even make our bread from scratch (with a bread machine...I'm not crazy). It has never seemed difficult, though, because I have the time to do those things. Not working full-time has allowed me to devote my energy to my family and home, but also to do things for myself. I have lost 20 lbs in the last year, I read a couple of books a week, I see my friends more often, and I'm learning American Sign Language. Most of all, I have a close, meaningful relationship with my child, which is priceless.
Quote of the Month
The way to happiness: keep your heart free from hate, your mind from worry. Live simply, expect little, give much. Fill your life with love. Scatter sunshine. Forget self, think of others. Do as you would be done by. Try this for a week and you will be surprised.
Editor's Notes
It is currently November 2001 but I'm only just posting the May 2001 Reasonably Simple. My intention is that during 2001, I will write and post a new article about every other week, so that by the end of the year, I'll be current again. I'd appreciate suggestions, guest writers, or anything else that could help me step up production this year.
You can contact me with your submissions, suggestions, or comments at:
Michael J. Coffey
PO Box 23221
Seattle, WA 98102
(206) 522-6224
Return to the Reasonably Simple index Go to the Ardea Home Page