Budget Busting Babies: How To Save For The Future - WAFF-TV: News, Weather and Sports for Huntsville, AL

Budget Busting Babies: How To Save For The Future

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HUNTSVILLE, AL (WAFF) -

Lindsay Killian has a pretty good idea how much it will cost for her family to raise 1-year-old Addison, but $235,000?

 "I've heard these statistics before," said Killian. "I mean, that's shocking because that sounds like a crazy amount of money.

But that's how much the USDA estimates it will cost for a middle income family to pay the expenses for a child born last year over the next 17 years. That doesn't include college!

"It is so much more than I expected," said Mitch Marsden, a financial planner. He's a little taken aback. His daughter was born last year, and she's altered his advice.

"Take your first expectation about how much it's going to take to raise a child, and double or triple it at least," said Marsden.

Think he's kidding? Consider this. It'll cost $8,000 more to raise his girl than a baby born in 2010. That's how much costs went up in one year - 3.5 percent. 

The USDA's made these projections since 1960, focusing on seven key areas of expenses. Food, education, transportation and child care went up the most last year.

So, how do you cut down on those? For Killian, who also has an 8 year old and 11 year old, it's eliminating child care.

"I know a lot of people do mothers morning out," said Killian. "I haven't done it yet. I mean it's just another expense every month. So, she plays with me."

Not everyone can do that, but you can save on gas. That's the reason food and transportation went up significantly last year. Lindsay and her husband have a monthly gas budget.

Marsden suggests sticking to a grocery list. "If you try to get on a good plan with that, not only does it help you avoid making extra expenditures while you're shopping, but it can help you cut down on those extra trips," said Marsden.

School supplies? They can add up, especially if they include school uniforms. That's where Killian's found another place to save.

Luckily, they do consignment sales, even at school for uniforms every year, and that's something I do with my kids," said Killian.

Marsden sees even more ways to save some money, like tweaking your cell phone plan, bundling your home and auto insurance and changing the *withholding on your taxes if you're getting large refunds.

"You don't want to underpay because you could face a penalty," said Marsden. "But, if you're getting large refunds, consider increasing the allowances you claim, and it may free up a little bit of cash for month to month.

"You just have to decide what is important and what is not important," said Killian. "Also, learn that they don't need 50 toys for Christmas at this age because, it sounds cheesy but, they are going to play with the paper."

Copyright 2012 WAFF. All rights reserved.

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