For expectant parents, the joy of an unborn child can make them feel like doing somersaults or leaping tall buildings. The sobering views of a new child start to come in as the news of the pregnancy wears off, maybe with a friend’s offhand comment that a child costs a lot of money. The excitement turns to worry when considering food, clothing, security, savings, school, tutors, piano lessons, cell phones, college, but we’re getting ahead of ourselves. A baby does cost a considerable amount of money until he/she reaches adulthood.

A recent MSN money article analyzes the cost of raising a baby from birth to 17 years of age. The cost relates to how much the parents makes on average. The following paragraph sums up the breakdown of estimated costs.

Though not as steep, the figures for lower-income families are just as unsettling: $204,060 for families earning $45,800 to $77,100 and $148,320 for families making less than that. That breaks down to nearly $16,290 a year from birth to age 2 for families in the $77,100-plus income bracket. This is no back-of-the-envelope guesstimate. The survey involves interviews with about 5,000 households, four times a year. [Source: MSN Money]

So a baby can cost as much as $200K until the parents send him/her off to college. The cost relates to housing, food, education, and medical expenses. These four areas validate MSN’s estimates or drive the costs lower depending on how each family responds to certain needs.

The housing cost was calculated by adding 100 to 150 square feet of needed house space for each baby in a household. This meant some families had to upgrade their homes, which meant more mortgage costs and probably accounted for the majority of the cost in the $200K figure, unless you’re feeding your child sushi and caviar regularly.

To reduce costs for a baby the housing variable should be the number one priority. Many families can make do with what they owned before a baby came into the picture. Now one child doesn’t necessarily equate to a need to move situation. Afterall how much room can a stroller, toys, and carriage take up? The question comes when the child gets older and wants more space. At that time, a move might be considered in most households.

The education variable can be different for many families. The variable is really dependent on whether the child will be placed in a public or private school. Of course public schools are affordable, but private schools often times offer better standards.

How then can parents shave some of the 200K from their spending. The biggest way would be to not upsize a house. Make do with what you have. This would save the most, with education and smart necessity spending coming in next. The best advice would be to not spend money you don’t have. If you plan on buying a bigger house, save for it. In the end, the 200K would be worth it, but saving some along the way could make the journey that much more enjoyable.

I wonder at times if it’s even possible to save money when you go out to eat. Who wouldn’t complain about some of the restaurant prices nowadays. A meal for two can often top forty to fifty dollars. A decent quick meal costs almost ten dollars, without dining in the restaurant. And forget about ordering a large pizza for under twenty bucks, at least not with breadsticks or many toppings. It’s frustrating to those of us inept in the kitchen, and even more so for those of us trying to save for anything important like college, a car, retirement, or just for security. Let’s take a look at a few things we can do to save money when eating at a restaurant. I’d love to hear from you as well.

1. If you’re going to a new area of town, a new city, vacationing, etc. then do some research online before stepping foot into a greasy steakhouse. Sites like Yelp.com can help you decide if the food is worth the money. What’s worse than spending forty dollars on a meal? Spending forty dollars on a meal you hated.
2. A meal is meant to be shared in many cultures. With the servings Americans receive, it’s no wonder we have an obesity problem. Couples can afford to share an entree and appetizer and still be too full for desert, which we don’t recommend buying, unless it’s your birthday, then by all means.
3. Coupons are you friend. Many restaurants have menus, store hours, and discounts all found on their website. A quick Google search should pull up any coupons the restaurant may have available. You might also check the various cutout coupon ads in papers and on newstands. These can help you find a deal for the single outing.
4. Don’t be afraid to ask for the specials. The specials usually have the best deals in a restaurant. A special might also be the best meal in an unfamiliar restaurant. It’s the safe choice.
5. Order the lunch portion rather than the dinner. The difference may mean three to five dollars, but if your whole family does this then the meal just got cheaper.

Do you have any ways you can think to save money at a restaurant? We’d love to hear it in the comment section or in our forums.

We have seen tremendous success with our gas card giveaway contest. We try to keep the contest as simple as possible, so ultimately it’s you, the reader, who benefit. You can win $25 sent through Paypal or a gas card through the mail — the choice is yours. Every email subscriber automatically receives on entry per month. And new this month, we’re offering each blog post that links to our gas saving articles five entries. That’s right, five entries for a blog post linking to our articles! Here’s the rules.

Gas prices may have dropped from the all-time high, but we know you could still use some money for the tank. We decided to keep up with the $25 Gas Card Giveaway. You can join our previous three lucky winners by simply following the contest rules, which really aren’t that difficult.

Contest Rules:

The rules are simple. Each visitor has two ways of entering the contest.

1. 5 Entry Tickets: Link in a blog post on your site the words save gas articles with the following link: http://www.savemoney.com/transportation/gasoline.html. It should appear like this: save gas articles
2. 1 Entry Ticket: Subscribe to the Save Money Blog’s RSS feed via email. The signup box on the right column makes this process very simple. Only verified emails count - so be sure to respond to the initial email.

Each person can gain up to 6 entry tickets!

On November 1st we will tabulate the contest entries, assign a number to each one, and visit the random.org number generator to select the winner. The winner will be mailed a gas card for $25 or given an equal amount via Paypal. Anyone in the world can win, just follow our easy steps to enter today!

As September rolled to a close, gas prices reached prices above $3.50 throughout the country. We figure our contribution to one of our readers each month means less money going out the door for gas and more money going to the bank. So every month we tally the number of email subscribers, add up all the blog posts for the month, and randomly select one entry as our lucky $25 gas card winner!

This month saw many entries…if you didn’t get a chance to enter, you can enter in October’s contest. The lucky winner for this month will be contacted via email. And the winner, according to the random.org number generator is…

129

The lucky winner has an email address like this:
te _ _ 00 @ _ _hoo.com. Congrats on your $25 gas card!

Every email subscribers has a chance to win $25 every month! Stay tuned for more ways to save money and a load of great content coming your way in October. Congrats to our winner!

The economy has turned us into private analysts bent on securing our own futures. We may switch stock buys, move to more safer investment solutions, and call out our friends and family who speak on the side of resurgence in the US economy. The troubled financial times bring out a renewed interest in many of our debts and spending habits. A recent San Francisco Chronicle article reported on the state of the US economy.

The first fallacy of spending money in order to save it (you’ve saved XX dollars by shopping Safeway, says my grocery receipt) is that you can’t save money you don’t have. We are not saving by spending. We may be buying something more cheaply, but make no mistake: We’re still spending money. [Source: SFGate.com]

We need to focus on our own saving habits and on our spending habits. While the two habits become intertwined, we should have a separate plan for each in order to stay on top of our financial well-being. Let’s assume we seek out the savings on a flat screen TV, finding a deal more than 10% less than the best price anywhere else. The question then becomes, ‘Should I buy this TV, even though it’s considerably less than the same model elsewhere? Do I need it?’ Just because something is a good deal doesn’t mean its a necessary deal.

We live in a society where marketers and advertisers seek to tap into the buy now pay later mentality. Just because I can walk in and buy a fantastic new queen sized bed with no interest until 2012 doesn’t mean I should do that.

The problems with our economy seems to stem from our credit hungry ways. As individuals we can stop the bleeding by simply waiting until we can afford the items. We need to look not at just the savings, but also at our spending habits in order to heal properly the financial problems.

We talked about this in our last post — Keep Your Money Safe from Investment Failures. The US economy has not seen this type of bank failure since the great depression. Other such markers of the trying times crop up in the stock markets. The stronghold of our financial endeavours, banks, seem to be teetering in a market squashed, mortgage, short selling nightmare. We trust our banks, but so did thousands of others in the few that went the way of the dodo.

MSN Money has an article online named Bank crisis: 10 things to know now. The article explains telling signs your bank may be ready to go belly-up. In part they dispell some errant thinking too. Even if the bank fails you’ll be protected by FDIC, which was recently expanded to cover Mutual Funds (wow!).

The article describes the procedure the regulators take after moving in on a failed bank.

Regulators usually shut down failed banks on Fridays. The FDIC then works all weekend to transfer insured deposits and most of the bank’s assets to the bank that’s taking over the business, or to a new entity created for just this purpose.

During the weekend you would have access to your account via ATMs. Worst case scario — you might be out of touch with your money for a few days, not much more.

It’s no surprise many of us don’t know how this process works. It’s been a while since bank failures became somewhat regular. In my own banking, I’m wary of bank changes. The losses creditors are taking in the mortgage front may be recouped by varying charges, monthly and irregular fees for things like overdrafts, etc.

All in all it speaks of responsibility, knowing where our banks stand, and we should also be keen on their changing procedures. Read the mailings they sent, but most of all keep saving and trusting in your bank, unless you have reason to believe otherwise.

In a world where economic uncertainty puts financial strains on a household, many families have to save for both retirement and their children’s educational future. Many families save upwards of $100,000 per child simply for education. If there are 18 years from birth to high school graduation, then you need a mature way to attain a savings for your child’s college education.

According to CollegeBoard.com, ‘About 56 percent of students enrolled at four-year colleges or universities attend institutions that charge tuition and fees of less than $9,000 per year.’ The student would also have living expenses to consider, which would be approximately $10,000 extra each year. So a total expense would average around 20K per year, with the average student attending for 4 1/2 years. The total cost for tuition and living expenses could exceed $90,000. When you make your plan for each child, it’s probably good to consider inflation as well, so a healthy $100,000 per child doesn’t seem too far fetched.

Now that we have the goal, we need to find a way to attain that number. Since we don’t have kids at the same time (unless you have twins, or triplets, or quadruplets!) we should be able to use a 18/XX year variable. Let’s begin for one child.

Doing the Math

18 years to high school graduation and $100K goal.

$100K divided by 18 years equals $5,555 each year.

$5,555 divided by 12 months equals $463 a month.

So to save $100,000 in 18 years you would have to save $463 a month. This is, of course, without interest.

How Much Would it Take with Interest Factored in to the Equation?

We’ll use the online savings rate of 3.5% currently being offered by HSBC. to save $100K in 18 years, a person would have to contribute at least $333 a month into a 3.5% savings account.

The $333 payment would actually pay for one child, so doubling the figure would give you a good idea of the cost for two.

Savings Interest Rate Makes a Huge Difference

Finding where to put your savings may make the most difference in the long term. Having the money in a high interest bearing account would benefit your monthly budget — you could save less and be guaranteed the same amount. It’s best to put in more than our stark figures though, since cost of living will likely rise between now and your child’s foray into college.

It’s not a secret that the wise ones among us save money for their future. Those who stow away savings can be among the more healthy and vibrant people we know in old age. Think about the opposite for just a moment. If you saved little to nothing throughout your life, then the golden years would actually be quite bleak, and less than golden.

I’ve heard some say that savings won’t matter because you’ll be old. The average person lives to be into their 70s and the average retirement age is a little over 65. This means anywhere from five to fifteen years living off what we save now and our social security. So even if you save a little from each pay day, your golden years will not be limited by shortsightedness.

A MoneyCentral article written by Liz Pulliam Weston describes the best advice on saving money. The money saving tips come from MSN’s money forums. They are some choice nuggest like "Pay yourself first" and "Think of the true cost." All of the advice was sound, but the one that stuck out to me as the most useful would be to "Pay yourself first".

Practicing Paying Yourself First

We likely pay a mortgage or a rent payment every month. We regard this money as sacred, right? When we calculate how much we’ll have to spend on groceries, gas, and entertainment we’ve already subtracted out the living space money. We don’t want to be living on the street afterall. We have to pay it. This should be the type of committment we have towards saving money.

How do we get to a point where paying 10% of our income to a personal investment becomes necessary? I like lists, myself. I write down the reasons why I should do something so I have a reference point when I don’t want to do it later on. You could create a list outlining why you should save ten percent of your earnings in a monthly period. Or you could try any other way you deem effective — whatever the case, save the money.

If we pay ourself ten percent of our income over a thirty year period, that will account for a large chunk of money. Who wouldn’t want that?

Discussion Questions

• How do you stay on track with savings?
• Do you pay yourself first?

Our spending habits can drain our pockets, skim from our savings, and lead to late retirement. At Save Money.com we strive to provide you with the best advice on keeping money in your bank. We have found unique ways to help you save money on taxes, utilities, gas, and groceries. So why not talk a little bit more about our own personal spending habits?

A February article from USA Today focused on people removing small luxury purchases from their spending habits.

The murky financial outlook and recession fears are factors. Another driver: fear of being out of step with a cultural mind-set that increasingly says less is more. If your best friend and next-door neighbors are cutting back on little luxuries, shouldn’t you be, too?

So in the spirit of cutting back and saving money, we list ten luxury items that can be removed from our spending habits to save money.

1. The corner coffee latte or espresso drink. While downing a five dollar latte sounds appealing it can actually cut into your monthly savings. Why not do without the corner coffee and stick to homebrew?
2. Gas. Yes, we know you need to drive your car. Why not drive it less? A bike ride can do wonders for your overall health and cut down on gas costs at the same time.
3. Bottled water. Even if you buy one bottle of water a day, you still spend close to ten dollars a week. This ten dollars quickly turns into five hundred over a year’s time. Why not drink from the tap or find a water fountain?
4. Cigarettes. Are you still smoking? Really? Smokers waste more money and create more future debt for themselves with health costs. With health costs rising, why not quit smoking today?
5. Alcohol. While it’s good to unwind with friends at the local watering hole, a trip there can cost anywhere from a ten spot to over a hundred dollars. Alcohol costs can vary from city to city, but we’re almost certain there’s more you could do with the money.
6. McDonald’s and other fast food joints. A quick lunch hour should not be spend waiting in the drivethru lane at a fast food spot. Why not brown bag it for a while and save yourself some money. You’ll likely save anywhere from twenty to fifty dollars depending on how you eat.
7. Credit Card purchases. When you do have to buy anything, it’s best to use your debit card or some cold hard cash. Otherwise, you run the risk of running up credit debt so high you’ll only be paying interest.
8. Movie tickets. A movie can run close to ten dollars per person, depending on your local. Why not try renting a DVD?
9. Gym membership. Do you need it? You can run in the park, do exercises at home, build a gym in a spare bedroom, and find other means to exercise. Many use the gym for a social platform, which we don’t mind, but at least get the value from the membership. Once a month does not rationalize the cost.
10. Salon visits. A trip to the salon can run close to a hundred dollars. Why not settle for a trim this visit and leave the hair color to the celebrities?

Americans across the nation have felt the pangs of credit card debt at some point or another. The interest rates on credit cards can really be the culprit for many cases of debt. When you look at getting a new credit card you should really be looking at a few things.

1. Is there an annual fee?
2. What is the interest rate?
3. If I’m using the card for the introductory offer, what are the terms of the offer?

If you pay attention to these three things, then you should be able to save yourself some money in the long run. For instance, a credit card with an annual fee can be costly and detrimental to your overall savings ratio. There are many banks offering credit cards without annual fees. To choose one with an annual fee would not save you money over time. Be patient and wait for the right card to come along.

The interest rate will likely be the most important part of determining whether to use any card. An interest rate in the teens would be costly, while a rate in the single digits would be appealing.

Introductory offers come as incentives to use the card or to transfer balances. Many cards offer a low interest rate for six to twelve months of use. But you need to read the fine print on the offers. A lot of times, credit card companies will charge you all the accrued interest if you default, even if you were only late on your payment by one day. Other introductory offers require you to pay off the full amount before the end of the offer period. If you don’t pay it off, then they slap you with the full interest accrued during the period. Be sure you’re committed to sticking to the payment schedule if you choose to use a card for its introductory offer.

Our site has a lot of information regarding saving money. We can help you focus on how to reduce debt and to lower your credit card rates. Be sure to join in the forum conversations.