By Theo Thimou, Clark Howard
If you’ve got kids, you know there’s always a need for info about more ways to save money and protect your family!
These tips are written to help parents who have kids of varying ages all living under one roof…
Get a will done
First things first, if you’ve got kids you need a will. Why? For the simple fact that the state will decide who raises your kids if you’re gone!
You can get a simple will in place in about 15 minutes using the WillMaker software ($55) from Nolo.com. If you don’t like WillMaker,LegalZoom.com ($69) would be another way to get it done on the cheap.
Have a level term life insurance policy in place
Do you have a family that depends on you for income? Then you need life insurance.
Stay-at-home spouses have a special need for life insurance. Should a stay-at-home spouse pass away, the remaining parent would have to suddenly pay for childcare and everything else a stay-at-home parent does on a day-to-day basis. That’s why it’s essential the parent at home have a policy, in addition to one who is out earning income.
With level term life insurance, it covers you for a set period—typically 10, 15 or 20 years—and the rate never changes. That’s why it’s called “level.” You can comparison shop for a policy at Quotacy.com, PolicyGenius.com, 1stOptionInsurance.com, Insure.com,AccuQuote.com, or QualityTermLife.com. By shopping online, you avoid an insurance salesperson trying to up-sell you from level term coverage to whole life.
Use generic brand diapers and formula
Clark has long recommended generic formula and diapers. Generic formula is about half the price of the national brands and the Food and Drug Administration requires that it be nutritionally equal to brand names like Similac, Enfamil and Good Start.
Generic diapers, meanwhile, are available from supermarkets, warehouse club chains, pharmacy chains and so many more places. They’ll save you a ton over big brands like Pampers, Huggies and Luvs.
Want to save even more? Consider cloth diapers.
Get thrifty buying and selling kids’ clothes online
ThredUp.com is one of many sites that have given the idea of secondhand clothes and consignment shops an online mommy makeover.
With ThredUp.com, you order a bag online, stuff it full of your kids’ gently used clothes, and ship it postage paid back to the company. They pay 20% to 40% percent of the retail value of what you’ve got.
As a buyer, you can purchase a wide spectrum of clothing for 12 months to size 20 from ThredUp at discounts up to 80% off retail—all without leaving your home to go to a thrift shop!
Don’t buy life insurance on kids to save for college
Beware of pitches from life insurance agents claiming that the absolute best way to save for your kid’s college is to buy life insurance.
The idea is you buy a policy on your kid and then they’ve got life insurance down the road in the event of their premature death. When they make it to college age, there’s this wonderful tax loophole that allows you to borrow from the policy’s cash value to pay for college.
But the embedded costs in life insurance policies can be massive because they’re padded with commissions for the salesperson. Plus, if you can’t pay the premiums on a life insurance policy, the policy lapses and you’re wiped out; there’s no money there to tap for college.
Clark’s preferred alternative for college savings? A 529 plan.
Decide what you’re going to do about allowances
Clark has a bias toward allowance as a paycheck that is earned for doing chores. He gives his kids a dollar a week multiplied by their grade level as long as they complete their chores. So a first grader gets $1 a week, a second grader $2 a week and so on. The chores are detailed for them on a chore wheel so everybody knows what they’ve got to take care of in the house.
When it comes to younger children understanding money, don’t overlook the three jars concept that came out of the Christian fundamentalist movement. Each jar is marked with a red, green or yellow heart. One jar can be used to hold money for charity; another jar holds money for current spending; and the third has money for longer-term savings. This provides a very simple, clear and tangible lesson for children.
Read more: What’s the ideal bedtime for kids?
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