The Costs Of Having Kids And Some Of The Financial Benefits
Having children can be one of the biggest blessings in a family. However, it is also a huge headache for family finances when there is no plan in place. Kids are very expensive. We have talked before about the costs associated with starting a family, but it does not simply stop there. There are so many more costs with kids as they get older, however, there are also other benefits which you can get as well. We will take a look at a few of these discussion points.
1) Cost Of The Extras
As kids get older, they start to get involved in other activities. These activities include sports, band, gymnastics, etc. The costs associated with these activities just to get started can be staggering. Sports gear per child can easily be in the $100’s of dollars. If you have multiple children in the same sport, your costs will easily exceed the $1,000’s. Playing in a band can be expensive too when you factor in the costs of an instrument for kids. This is all before the costs of traveling, uniforms, extra food, and time is included. Basically, it is not cheap to have your kids in these activities. However, there are many ways to cut costs and save some money. Consider some of the following ideas to help.
- Renting the sports equipment when applicable
- Check “use-it-again” shops to get the best deals on athletic attire
- Don’t waste money on the top name brands for everything (you will pay a larger markup price on name brand)
- Rent the instruments instead of buying them (when appropriate)
- Traveling can be expensive, but remember other parents are in the same situation. Try to share the burden together through carpooling.
2) The Benefits You May Not Know
Although there are little cost-saving benefits of having kids, there is very little in the sense of financial benefits. Most of the benefits financially will be seen in the form of tax credits at the end of the year. As always it is ideal to work with a tax expert (as I am not one) to see the full range of benefits having a child or children in your family can provide. One of the credits is the Earned Income Credit (EIC) which is typically geared toward lower income families. This credit on your taxes can range from $3,000 – $5,000+ depending on the total number of children you have. The next one is the Child Tax Credit. This credit will typically provide a $1,000 credit for each child you have under the age of 17 years. These two simply credits can be money back in your pocket or decrease the total impact of your tax liability at the end of the fiscal year. Again, be sure to talk to your tax advisor to discuss your options.
Having children is not cheap. It will be expensive, time-consuming, emotional, and just plain hard. However, having children can be a rewarding addition to any family. Understand most of the benefits will be love, affection, time, and watching them become the product of your parenting.