How to Save Money with Kids

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When I talk about early retirement, people start challenging the financial considerations relating to accommodation and food. Once I am able to demonstrate that $3,000 a year is enough to nicely feed one person, the discussion usually shifts towards kids’ expenses and their future education.

It’s a thought that every parent has and it is only natural to wonder if there will be enough money to raise your children in happiness and provide sufficiently for them. As parents ourselves, we would not take any risk that might put our kids into financial needs.

However, going through the process of raising children, we realize that child rearing doesn’t need to be nearly as expensive as we were led to believe! I understand every parent wants the best for their kids, but maximizing the amount of money you spend on them actually isn’t the way you do this!

Diapers and Wipes

When I was born, everyone was using cloth diapers. You would wrap a piece of cloth around the baby with a couple of safety pins and – voila – An affordable nappy! Eventually, disposable diapers emerged and quickly became the norm; they saved parents a lot of unpleasant work and time, and are extremely convenient to use.

However, in recent years there has been an increasing trend to return to cloth diapers. This is because using them is actually a better choice for the baby’s bum, the environment, and the wallet! This is largely because of the improvements cloth nappy companies have been able to make in recent years. Most modern cloth nappies (MCNs) mimic the design of disposable nappies and make them (almost) as convenient to use. And there are already lots of good articles and reviews about this topic.

The main reason people shy away from cloth nappies is because they don’t want to deal with the “mess”. Unfortunately, there is no way around “mess” with babies, whether you use cloth or disposable diapers. Some things just can’t be contained! Ever heard of poo-nami? Eventually, you will get urine or faeces on you. I’m sorry if I’m the first to break that to you!

In fact, we’ve barely had any leakages with our cloth nappies – Certainly far less than our “disposable” peers. We use BumGenius 4.0 diapers and they are absolutely incredible. They are functional and come in cute designs. Unless the diaper shifts (because the baby is sitting awkwardly in the pram or carrier), the mess stays put!

But that’s not the only reason we are happy with our choice. We’ve noticed that our son gets a skin rash every time we use disposable diapers (e.g. when travelling). That makes it not just an environmental and financial choice, but also a comfort choice. We like the idea of having cotton against his skin. No plastic, no synthetics, no chemicals.

In line with that philosophy, we also make our own reusable wipes using natural flannel material soaked in camomile tea, lavender oil, tree oil and olive oil for skin protection and good smell (but there are many different options). It works extremely well, both in terms of removing dirt and smells.

The best part, of course, is that we are saving a lot of money with reusable diapers and wipes. Most children would use about 6500 diapers, assuming 6 nappies a day for 3 years. Buying a brand name like Huggies or Pampers will cost around $3,000 when bought in bulk. Buying generic brand diapers will still run at about $2,000.

In comparison, cloth diapers costs around $30 a piece and you will need about 20 of them for an upfront cost of $600. Even as we factor in the costs of laundering, it would still be half the cost. And the gain becomes even larger the more kids you have!

Kids’ Clothes and Toys

You can spend hundreds of dollars on clothes and toys that your child either never wears (our baby grew out of his 0-3 months clothes a week into his life!) or never plays with (why do they always seem to love the box more than the content??).

The fact is that young kids don’t appreciate expensive things. They don’t understand brand names or character franchises until we teach them. We learnt that the hard way when we tried to show him Goofy and he thought we were excited about the tree next to Goofy – Because he had no idea who/what Goofy was and just loves being outdoors.

Branding only works when you are exposed to it and our kid wasn’t! So before you start spending lots of money on presents, think about what your baby wants and needs. Often you’ll find that someone is a couple of years ahead of you in the parenting cycle and is more than happy to hand off their old stuff to you for free or at a bargain price.

If you need something that none of your friends or family are trying to get rid off, try a secondhand market, charity shops or low-cost stores. Places like Freecycle and Gumtree can have real treasures. The fact is, young children outgrow and stain their clothes so quickly, it is not worth investing in them. Otherwise you will only get upset when they want to play in the dirt – And that’s not fun for anyone.

Food and Childcare

Like many parents these days, we have also returned to basics when it comes to baby food. We steam and blend food ourselves to ensure it is fresh and free from preservatives and other chemicals, as well as having low salt and sugar content. This makes sure that baby starts out with healthy eating habits and lays the foundation for a good diet.

It is also much cheaper to cook your own food than buying pre-packaged foods. You can start out making small amounts and freezing them in ice-cube trays, giving baby a few cubes at a time. As the appetite increases, you can shift to making smaller portions and freezing them in containers or bags.

It is easy and I wouldn’t want to give my baby anything else. Besides, when we travelled to the US, we tried to give him packaged food. He wouldn’t eat it. None of it. We tried lots of different varieties, but he knows it’s second grade. So, there clearly is a notable difference.

Childcare is a killer in most Western countries – Australia is no exception. Not only do you spend months and months on waiting lists, after paying a deposit for the privilege, but when you finally get in, you probably don’t get the dates you want (having to start and pay for your child weeks or months before you really want to) or the days you want (only getting 2-3 days rather than full-time).

In fact, for children under the age of two, there are few discernible benefits from attending childcare. They don’t need the daily social exposure – They get sufficient interaction by playing with you, visiting friends and attending playgroups – So why are we killing ourselves to get our kids into childcare?

We made the personal choice to hire an au pair. You pay about half the price and get one-on-one personalized care. You can ask the au pair to do things a specific way, tailored to your individual child’s needs, giving them home cooked food in your home, playing with educational tools that you provide, and continue using cloth nappies (which most daycares will not do!).

It means that the au pair can build a relationship with the kid who gets sufficient attention, is responded to, and can be kept on its personal schedule (it’s not too noisy, or hot, or the staff is too busy). It also means fewer sick days, as the child doesn’t need to be removed from care everyday s/he gets sick.

Children on the Cheap

In short, saving money with kids doesn’t necessarily mean making sacrifices. It may actually mean making better personal choices in line with your philosophy and lifestyle. It’s not “cheap” to hire an au pair so your child can have the one-on-one attention it needs in the early years. It’s not “cheap” to use cloth nappies because they are better for his/her skin. It’s not “cheap” to use hand-me-downs.

These are sensible choices that benefit not just your wallet, but also your child’s well-being. So, why are we so negative about saving money? In the end, you can use this money to do something that really matters – Spend quality time with your child! And that is what really matters, what will be remembered, and what will form memories for years to come.

They don’t care whether they got the Batmobile for Christmas. But they will care whether you were there to tuck them in at night. Doing right by your children isn’t about material goods; it is about love, memories and happiness. And – as they say – the best things in life are free!

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Monkey Master

My wife and I are currently living in Sydney, Australia. We plan on becoming financially self-sufficient in 2015 so we can retire at 35. We are regular working people, trying to be smart about saving money and generating passive income. I want to share with you how we reached that decision and how we are planning towards financial independence. Continue Reading.

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