Parents: Can I Get Some Help With True Expenses?
My wife and I just had our first child 3 months ago so it's time to start adding some new True Expenses to the budget! Here's what I've got...
-Orthodontics around 9 y/o.
-Car at 16 y/o.
-College at 18-22y/o.
-Wedding at earliest will be in her 20s.
Those are the obvious ones. I'm sure I'm missing tons though. Any other ideas?
Thanks in advance!
Other items to include would be school supplies, school fees (in Canada, even though education is publicly funded, there are still fees at school). Rather than saying orthodontics, perhaps a medical category for any type of medical expenses that may come up (glasses, xrays)
Regarding a car - are you willing to pay for it in full? Will the child be required to contribute? If not contribute to the cost of the car, then perhaps fuel, insurance and maintenance? Often it is a great way to get them to understand financial responsibilities.
I am also including a link to a really great book (that is now a series) for helping to teach children about financial literacy. I found it a very different approach to allowances but it worked well for us to help. I wasn't as diligent back then about implementing but I found it super useful on the allowances alone. It is a Canadian author (CPA) but it will work universally. https://www.paullermitte.com/
PS Always be careful about assuming when weddings will be....
First of all, congratulations!!! Secondly, you're way ahead of me when I was at that stage, so another round of congratulations. My biggest piece of advice is to start saving for college now and refuse to take on any loans for education. Parent Plus loans are handed out like candy and as if it's just a fact of life. No! I made this decision and then between myself and my kids we made it work. The were RAs, got jobs on campus, got scholarships, you name it. One graduated from a private college with $5500 debt and the other graduated from a state school with NO debt.
By the way, my first son was paying off that loan with minimum payments which was like $50 per month and would have taken forever! I made him a deal that once he got it down to $3000, I'd pay it off. Now he's suddenly paying it down like gangbusters! 😄Of course, I'm able to make him a deal like that thanks to my own use of YNAB.
P.S. Many schools (now I'm talking about grade school and HS) now expect you to chip in for any extracurricular activities like sports and music so you'll eventually want to have some categories for that.
One general piece of advice is to let your kids learn and figure out some things for themselves (of course you can help them if they get stuck). In other words, don't do everything for them. (of course I'm not talking about babies! but as they get older.) My kids are now incredibly self-sufficient. Can do their own laundry, cook, did their own FAFSAs (college thing) and stuff like that.
Wow! I am in awe and wished I had found something like this sooner. You are doing great!!! I am just adding some other things to think about. I'm not necessarily saying you should be saving for all of these. Just ideas that might lead to you thinking of something else. I think you have to best things to save for already.
-Competitive sports; we spend about $4000 per kid per year for travel and things (This really could be any hobby: music lessons, debate camps, mission trips, etc.)
-Vacations - This may sound silly, but we love traveling with our family. And it is expensive!
-Retirement for yourself - sounds silly, but my parents have been a huge burden on us. I don't want to do that to our kids. I cannot imagine that you don't since you seem so forward thinking in budgeting.
Can I just say again, WOW!! Good for you getting this together now.