Thrifty Spending Issue 49

FEATURE ARTICLE:  Have a New Born in the Family? Here are Some Easy Ways to Save Money.

As the cost of the most basic goods and services have increased with the size of the American economy, so too has the cost of raising a child. The US Department of Health & Human Services estimates the cost to raise a newborn to the age of 18 to exceed $250,000 with the first two years to be the most expensive. The cost of clothing, medical care, child care and food add up very quickly. Here are a few simple ways to save.

Make Your Own Baby Food
Making your own baby food can be a nutritious and low cost alternative to purchasing commercial brands. Although commercial baby food is safe as well as convenient, it is also higher in starch, sugar and water then what homemade baby food. Additional resources on how to prepare baby food can be found at

Use Cloth Diapers
Using cloth diapers may generate concerns about diaper rash and allergic reactions. However, according to the Journal of Pediatrics, the report of rashes during use of cloth diapers is 10% less frequent then during use of plastic diapers. Even though the plastic diapers will hold larger amount of liquid and won’t need to be changed as frequently, the increased use of cloth diapers from changing still results in a savings of $25 to $55 per month.

Share Toys and Clothing
If friends or family with children may have baby toys or clothes that may be usable. Even if you receive a couple of outfits or toys, the savings certainly add up. Always remember that the first step in preparing a budget is knowing your expenses and what can be reasonably lowered. It is important to make sure that quality isn’t sacrificed, especially with children. Although the cost of raising a child can be high, the joy of a happy and healthy baby is immeasurable.

MONEY SAVING TIP:  Saving for School

  • Check out study supplements from the library. Don’t buy them.
  • Buy used text books.
  • Take advantage of free pens and pencils at business conferences.
  • Keep track of your pens and pencils. You ’ll spend less on them if you don’t lose them all the time.
  • Buy back packs that your kids can use for years. While they might think the Sponge Bob Square pants one is cool in 2nd grade, they probably won ’t think it’s cool in 4th.

Do you know how to Budget for the Holidays?

Thanksgiving will be here quickly and it seems within days Christmas will be here and we know what’s next. Remember last year when you were trying to figure out how you were going to pay for everything and you promised yourself that this year it would be different. It is time to make good on your promise and start planning. Remember that rent, car payments and groceries and other bills you have been paying for the last 11 months must be paid during the holiday season. So if you are going to buy gifts and hold a Christmas or New Year party this season plan for it from now.

Here are a few tips to help you along.

Take out your monthly budget form you have been using for the past year and review how you can reallocate money you can put aside for the holiday season. If you have been thinking about having a Christmas Party, you could have started saving from September. If you are spending $100 per month on entertainment expense you may decide to stay at home and set those funds aside for your party expenses. Tally it up and think hard about whether you can afford to spend that much. If the total figure makes you uneasy, think about areas in which you might cut back. Then stick to your budget.

If you’re buying gifts, start listing items that you plan on purchasing. It’s likely that you don’t know what everyone on your shopping list wants, so start asking. Many people will start their gift buying late in the summer when merchants are slow and the savings are substantial. You may also be able to buy items for your party long before the prices are marked up for the last minute shoppers. Try to buy gifts using cash and keep the credit card at home.

Don’t forget about such minor items as wrapping paper and holiday greeting cards. They’re not widely available yet, but they will be soon. Keep your eyes open for sales. If you start early, you can buy these items a little at a time and store them, instead of having to spend a lot of money all at once.

If you’re planning on serving guests, plan ahead. Things like cake mixes, spices, canned goods, and liquor can all be purchased a little bit at a time and placed aside until it’s time to use them.

Are you creative or artistic? Consider making some of your gifts instead of buying them.

Split the cost of major items with friends or family. For example, if someone you know wants a new TV, pitch in with two or three other people. It will save all of you money, and the person who wants the TV will be happy to get it.

Avoid the mall if you can. Everything is more expensive there. If you must go to the mall, look for sales.

If something is not affordable, don’t buy it. This is often easier said than done, but remember the holidays are not a spending contest, they’re supposed to be about spending time with people you care about. Emptying your checkbook won’t make them any more special.

Buy gift certificates. Let your friends and family get what they want. This not only helps you control how much you spend, you can avoid long holiday lines by purchasing them early.

Leave your credit card at home. You are more likely to make expensive purchases with your credit card than with cash. Credit cards make those expensive purchases even more expensive. For instance, let’s say your holiday shopping costs you $2,000. If your account had an 18% interest rate and you paid the minimum payment due, it would take you approximately 18 years and cost you more than $5,600 to repay. Don’t use your credit cards unless you can pay the balance in full when you get the bill.

During the holidays, it’s very common for stores to offer discounts to anyone who applies for their credit card. Don’t do it. First of all, an entry called an inquiry is made to your credit report every time you apply for credit. If you have too many inquiries, you can hurt your credit rating. Second, store credit cards come with notoriously high interest rates, so unless you pay the balance in full, your “discount” actually results in an unnecessarily high bill.

As you can see, planning ahead and shopping wisely can save you a lot of money and keep your budget intact. Start now!