Money Matters: Budgeting for kids can be an exhausting endeavor that feels like trying to cross the street, and every time a bus full of “Mom and Dad I need this for school, or sports, or whatever” runs you over without a second thought.

Because of this, we are here this week to act as that dashing and polite young gentleman to help you across the street avoiding those buses along the way.

Let’s take a look at budgeting for kids’ expenses.

Survey says: The average cost in America to raise a child from birth to 18 years old is a staggering $375,000! That isn’t including college or weddings, or “hey I crashed my car for the 3rd time” (which hey, if this is you maybe make junior buy his own car).

Here’s what’s on that portioned plate today:

 😎 Our Favorite Resources
👍The BIGGEST budget categories for a child each year
👌 Simple tips you can start immediately to budget effectively
🤷‍♀️ What’s up for next week

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💵Budgeting

As usual I want to give a shoutout to EveryDollar. My wife and I have been using the app for about 3 months now and still love it.

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Last week we talked home repairs and how to plan for them. Check that out here

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"Parenting is the easiest thing in the world to have an opinion about, but the hardest thing in the world to do." — Matt Walsh

Today’s Main Event

Biggest Budget Categories for Children

It should come as no surprise that food is where you’ll spend the most money over time. So let’s start by upsetting that cart of apples and see what’s inside!

Food

This topic could easily be a series of articles, so to make it short and sweet I’ll start with the average amount of money spent per age group!

• School Aged (5-12): According to the USDA the average monthly amount spent for food on school aged children is $150-$300. With an additional $55-$65 if they are partaking in school lunches and snacks.

• Teenagers (13-18): As expected teenage boys eat more than girls and on average eat about $90 a week in groceries. While the average amount for teenage girls is around $71 a week.

• Adults (19-50): These numbers don’t change very much in adulthood as adult men need about $88 a week for food and adult women need about $74 a week.

Now before you start trying to add all these totals up, the USDA has already done the math for you.

Here are the average amounts to aim for per month based on different income needs (These are for a family of 4):

• Thrify Plan: $969 a month

• Low Cost: $1053 a month

• Moderate: $1306 a month

• Liberal: $1578 a month

While having these numbers for your budget is a great start I want to share some tips to consistently bring those numbers down without having to go on a hunger strike.

But before we get there let’s look at other categories for children’s expenses.

Clothing

A study from 2021 estimated clothing costs for school aged children to be about $779 a year…making up roughly 6% of a family’s yearly income.

This is for a single child and would obviously increase if you have multiple children.

I find this amount staggering and think that if you pick your spots wisely, then you could bring this number way down each year…

Allowing you to spend that saved income elsewhere.

But as before more on that in a bit.

Healthcare

Healthcare expenses come in at a whopping 9% of family income for a child, at an average of $1168 per year according to that same study in 2021.

This includes, out of pocket expenses, health insurance premiums, and co-pays and the like.

Considering the fact that your health insurance premiums are taken out before you ever get your paycheck, that makes this number a bit easier to deal with.

Make sure to plan though for little Bobby to do his best Evil Knievel impression by jumping is bike over his two neighbor friends…

Sports, Entertainment, Personal Items, and the rest

This last section is a catch all for all the yearly remaining items throughout the year.

The “Mom, can I have that pleeeeeease” stuff.

At $909 on average per year (per child), this makes up about 7% of the average family income.

Some of these things are necessities like hair cuts, toiletries i.e soap & deodorant, and other personal items.

Which hey, are optional in some peoples minds but if that’s you, please stand downwind from the rest of us!

Sports and other extracurricular activities are likely the biggest money pits around. I’ll share my tips for that here since the big tip list is coming up next anyway.

• Budget for the extracurriculars year round. If you save a little each month then its much easier to handle when the season starts.

• Shop second hand: Kids attention spans change like the wind, and there is always a parent on Facebook selling their kids stuff from last year. Keep your eyes peeled and scoop up these deals when possible.

• Talk to other parents in the community: For some activities there may be a community bank of gear that can be used by those having trouble covering expenses.

• Fundraisers: If you are feeling that entreapeuner itch, then take the opportunity to teach your child a bit about money. Have them do a car wash or something along those lines to raise money for their gear.

Simple Strategies to Easily Build Your Budget

Alright lets get cooking and start off with the tips for the food category since its the largest portion of the money pie.

Food Budget Tips

• SHOP BUDGET: Y’all have heard me say it before but I’ll continue to harp on this one till the sun explodes, shop at Aldi or Walmart. They both consistently have lower prices than most other grocery stores.

  • If you must shop at your fancy pants Kroger or wherever, at least do it on sales days. Every store has them, but you gotta be on the lookout.

• Plan your meals: Take time to put a weekly menu together and then shop for the ingredients to make it happen. This will let you make less decisions through the week.

  • We dive further into this topic in this article.

• Make a list: Build in some fun snacks that you like on fun nights but once the list is made don’t deviate from it while in the store.

• Eat your leftovers: Food waste should be viewed as throwing your money directly in the trash. I’m realistic, sometimes this happens…but keep it to a minimum.

• Shop more often: If you notice some grocery items a perishing before using them all, buy less of them more often. Sometimes I stop on the way home from work and it only takes me 10 extra minutes to grab what I need for the night.

• Order Online: This one can be tricky because of fees. However, if you find yourself always buying items not on the list, or you are short on time. Use an app/service to shop for you and have your groceries delivered.

Clothing Tips

• Shop out of season: This one can be a little awkward to start BUT try and start to shop at the ends of each season when the clothes go on sales.

  • i.e buy all your shorts and teeshirts at the end of summer and winter jackets at the end of winter.

• Shop budget: I HATE going to Gabes BUT…that doesn’t make it one of the best places to find good clothes for cheap.

  • Places like Gabes, Payless or Shoe department, or even Wal-Mart are always going to be cheaper than name brand retailers.

  • Also, don’t forget about yard sales. People get rid of the nicest things in yard sales and you’ll pay a few dollars for a pair of Nikes.

Healthcare

• This one is a bit tough to really plan for because some kids need more medical attention than others.

• The one tip I will give is to just set an amount each month in your budget for medical expenses. On months you don’t need it, put that money into savings and note how much you have.

• Then on months where your kid decides to test his new parachute designs, you can dip into that fund to cover the difference.

• Some employers offer this exact idea as a health savings account which can provide additional benefits depending on the program. So look into that if available.

Until Next Time

What’s Up Next Week

Final Thoughts: Budgeting for children can be a daunting task if you don’t plan for it. But, if you just find some approximate numbers that you can expect and plan for them throughout the year, anyone can avoid the stress of unexpected expenses.

Check back next week for a deeper dive on Healthcare budgeting with Jim.

Stay focused but live the life you have now!

Peace out,

Nico & the Hootsquad

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.