Raising a family is expensive. Before my wife and I had our first son, I was terrified. We were decent at managing our finances, but I suddenly felt that I had holes in all my pockets. I'm sure other families feel this pinch and constantly look for ways to cut costs.
Try some of the following money-saving tips and use them to take charge of your budget.
1. Organize your grocery shopping. The more organized you are when you go grocery shopping, the more money you can save. Have a list of items you need, coupons in an envelope and a maximum budget. Don't take your three boys to the grocery store if you can avoid it.
2. Eliminate one service each year that you can do without. The potential here is almost unlimited. It can be a hardly used gym membership, a land line telephone service or cable TV. I also do this with my businesses, making sure I cancel tools or subscription services I no longer use.
3. Never buy off the shelf. Any time you plan to buy something, especially something fairly costly, you should always do your homework first. Surf the Web to see who offers the lowest price, if any sales are coming up, or if coupons are available. See if you can buy the same item secondhand. My wife and I save thousands of dollars when we built our dream home, paying less than half the initial price for our furniture.
4. Participate in - and use - your rewards programs. Sign up for them wherever possible, and keep tabs of your points. I recently signed up for a Southwest rewards card, and look forward to booking my first free flight soon. Use it wisely, and you can even get a family of five to Hawaii for free.
5. Never fly when you can drive. If the trip is within a few hundred miles, plan to drive instead of flying. For the price of a single airline ticket, you can rent a compact for a week. Sign up for discount clubs such as AAA to save money on hotel stays, car rentals, restaurants and travel attractions.
6. Sell what you no longer need. Instead of throwing away items you don't use, try selling them first to make some additional money. Have a garage sale once or twice per year, or try Craigslist or eBay. I sold a couch I bought at IKEA over six years ago for $150 using Facebook.
7. Buy clothing in thrift or discount stores. This is especially a good strategy for children's clothes, since kids outgrow them quickly. Thrift shops don't have the selection that retail stores offer, but you can often come across good quality clothes, sometimes barely used.
If thrift stores aren't your thing, then take a look at discount stores like T.J. Maxx or Marshall's. I still remember - and regret - buying a new tie at Macy's for $40 only to find the exact same tie at Marshall's a few weeks later for half the price.
8. Never buy new what you can get secondhand. You sell whatever you no longer use; others do the same. Before you make a major purchase, first look into garage sales and estate sales in your area. Surf online marketplaces, such as Craigslist. Best of all, the prices are negotiable. There's practically nothing you need to buy new again.
9. You probably don't need a new car - ever. Buy a used car for a few thousand dollars or no more than you have in your bank account. A new car, whose values drop right after you drive them off the dealer lot, means higher insurance premiums and ad valorem taxes. Although a used car requires more expenses on maintenance and repair, it costs less than the annual outlay you make for monthly payments on a new one.
10. Avoid being over-insured. The insurance you have should roughly match the reasonable possibility of a negative outcome. For example, you don't need $1 million of life insurance if you only make $50,000 a year. You don't need prescription drug coverage if all you ever need is an occasional antibiotic.
11. Give the gift of time. We often give gifts to people who we can't spend time with, either for a birthday or at the holidays. An outing, a lunch, a dinner or even a quick cup of coffee could be worth more to a person than a physical gift. It also works wonders for building up relationships.
12. Buy when things are cheap. This concept applies to not only investing, but just about anything. For example, since retail sales typically fall off in January, nearly everything goes on sale. Do the bulk of your buying in January rather than November and December. This also has strong seasonal application. For example, buy your winter clothing in late winter or early spring, once winter items go on clearance.
13. Take better care of your health. This is important for financial considerations. If you are healthier, you spend less on dealing with the fallout of common illnesses like cold and flu. You can save even more by avoiding controllable health conditions related to inactivity, obesity, smoking and other dangerous behaviors.
14. Shop with cash or debit cards, not with credit cards. With cash and debit cards you pay cash on the barrel, but with credit cards, there's always the possibility of spending more than you have. Yes, there are rewards programs that work in your favor with some credit cards, but interest potentially wipes out any rewards-based savings.
15. Save a minimum of 20% of your net pay. Saving is not about having money for its own sake- it's about eliminating the panic factor that often causes you to spend more than you need to. Having money enables you to save money in a way that living hand-to-mouth never can. It takes you out of the state of crisis management, and gives you control over your circumstances. And that's what you need to properly care for your family.
