The frugal parent

Kids are expensive, that's no secret. But you don't need a lottery win to raise a child

You’ve just had a baby and are loving maternity leave — cuddling and tickling and watching your little one grow and learn. However, there is a dark side to life on leave: Your income is reduced, and the urge to buy, baby, buy is everywhere. It’s not that your little angel needs all the stuff that catches your eye, but, well, isn’t that outfit just irresistible?

No, it’s not. Just ask Gail Vaz-Oxlade, a finance expert famous for dishing out no-nonsense advice on TV’s Til Debt Do Us Part. She puts couples through finance boot camp, giving them the tools to dig themselves out of debt and reconcile what they want in life with how they spend their cash.

“People see babies as the next best reason to go shopping,” says Vaz-Oxlade. “I’m not saying you shouldn’t buy the things you want for your baby. Please, be my guest — but only if you have the money. Don’t put a $1,000 stroller on your credit card because that’s not buying it.”

Deciding between needs and wants can be challenging at the best of times, never mind when you’re sleep deprived or stressed. Julie Jaggernath, director of education for Vancouver’s Credit Counselling Society, says our changing attitude toward debt doesn’t help. “People used to save money and buy things with cash,” she says. “Then credit came into play, and people used it with the intention of paying off the debt as soon as possible.” Now, carrying debt has become an expensive way of life for many families. “We see friends with new cars, the expensive stroller, money to go out for lunch, and we wonder, ‘If they can afford it, why can’t we?’”
Make money management a priority

Vaz-Oxlade is consistently shocked that so many people don’t pay attention to how much money they bring in and dole out each month, and rely on credit to make ends meet.

Fess up — does this sound familiar? If so, making money management a priority now will take the fear out of planning for your family’s future and set your mind at ease over the arrival of next month’s bills.

The first step is to find out exactly where your money is going. For one month, write down everything you spend — from gas and groceries to that blueberry muffin on the way to the office. At the end of the month, you’ll see in black and white what you’re spending where.

Says Vaz-Oxlade, “If you discover you’re spending more money than you make, you have two options: Go back and cut things out, or make more money. That’s it, that’s all you can do. There’s no magic.” The alternative is to fall deeper and deeper in debt each month.

Next, put your money where your mouth is. If you’re having trouble coming up with the dollars to invest in an RESP for your child, but are spending $250 a month on cellphones, you have some decisions to make.

“Be sure what you say you want and what you do are the same things,” says Vaz-Oxlade. “For example, if staying at home with your children is the most important thing in the world to you, then there are other things you’ll have to give up. If you don’t have money to put into an RESP, then the reality is that you can’t start that investment until you free up money from somewhere else.”

Jaggernath agrees that many new parents feel bombarded with everything they should be doing. “Take a step back and decide what you can afford right now,” she says. “Circumstances will change over the years and you can revisit your plan as these changes happen.”
Cut corners

Vaz-Oxlade suggests that a great way to cut corners is to become a more conscious shopper. “A lot of people unconsciously buy things because it’s just rote for them. On the way to work, you buy a coffee. At the grocery store, you pick up a magazine. You go to buy wrapping paper, but while you’re at the dollar store, you buy 20 bucks’ worth of crap.” Keep a list of things you need and when it’s time to shop, don’t stray from the list.

When it comes to baby gear, look to other moms before you head to a store. You can get almost everything you need for a baby second-hand, and often for free, if you have friends or relatives with older children.

Vaz-Oxlade promises that it’s liberating to create a budget, and stick to it, because you’ll always know exactly where you stand. Never again will you wonder where you’ll get the money for next month’s hydro bill because you spent it at the grocery store.

You’ll also rest easier if you have a rainy- day fund, for unanticipated car repairs or occasional expenses like weddings.

“Having everyday savings is the only way to avoid getting into debt, or not incurring more debt,” says Jaggernath. You can kick- start these savings by eliminating extras, like switching to a bank that doesn’t charge service fees or bagging your lunch for the office. Jaggernath also suggests topping up utility bills by five or 10 dollars a month to create a cushion for a time when it’s needed, and socking away GST credits, tax refunds, gift money and the two extra paycheques a year for people paid biweekly.

People also forget how much they have in their cupboards and freezer,” adds Jaggernath. “Pull out the items that migrated to the back and revise your shopping list down to what you truly need, leaving that money to use elsewhere.”

A little bit here and there adds up, and many find that living on less becomes addictive as they watch their savings grow.

There’s another bonus, says Jaggernath. “You may not see it now when you have to decline your toddler’s request for a toy, but you’re teaching your child good money management habits that will last a lifetime.”

Eliminate your debt

In the financial hole? Gail Vaz-Oxlade offers two strategies to climb out:

• Get a consolidation loan. Shop around to find the lowest rate you can, then have the financial institution combine your debt into one monthly payment, with a goal of having it paid off in less than three years.

• Get aggressive with debt repayment. If you don’t qualify for a consolidation loan, here’s your best strategy: Make your minimum payment on all your debts, but make extra payments against the debt with the highest interest rate. Pay five or six times the minimum payment on that debt and, once it’s paid off, roll that payment on to the next most expensive debt, and keep doing that until all debts are paid off.
10 little ways to save BIG

Parents share their best dollar-stretching tips

Make your own baby food It’s so easy, and the savings are huge: Steam or boil the food, then toss into the blender, adding cooking water for the desired consistency. Pour into ice cube trays, freeze, then transfer to freezer-safe bags.

Shop for points Use credit cards that give points for purchases, or shop at stores with rewards programs. Redeem them for necessities like gas and groceries.

Swap and save Kids grow out of everything so fast; check out second-hand stores and garage sales for clothes, toys, books and more, and trade with other families. You can also sell back some items. Be sure to check the Todaysparent.com Virtual Garage Sale.

Power down Use solar-powered outdoor lights and energy-efficient ones inside; wash in cold water and use a clothes line or rack for drying. Put plastic on the windows in the winter and wear a sweater and slippers instead of cranking up the heat.

Choose generic The quality of store-brand diapers, wipes and many other household items has greatly improved in recent years.

Think ahead Check toy sales and end-of-season clearance racks and stock up for holidays and birthdays (for your own kids, as well as parties they attend).

Price match Find a store that will match the price of identical items on sale at other stores to save yourself the gas (and temptation) of shopping at multiple places.

Dine in Instead of meeting friends at a restaurant, have a potluck at someone’s house after the kids are in bed. It’s about the conversation, not the location, right?

Clip and save Find coupons online, request them from the companies whose products you buy, swap them with other parents. Here are some places to start:

save.ca
smartcanucks.ca
gocoupons.ca
momsbudget.com/coupons

Eliminate temptation Doing laps around the mall with your stroller is a great way to get out in bad weather, but after an impulse purchase or two, as well as lunch or a snack, what damage is it doing to your wallet? Plan a mid-morning playdate instead.

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