Sound Money Matters will be silent next week. I will be on vacation and decided that rather than rushing to write advance posts or find a bunch of guest posts, I’d simply let the blog have a vacation, too. Of course, that also means that I’ve been in a vacation planning rush so that I can “maximize my downtime,” as it were. Here are my tips for a frugal, relaxing vacation.

Keep a Standard Packing List
Before every trip, I make a list of what I need to pack. After a recent trip, I took that list and typed it up into a Word document. That is now my master packing list that I can update for each particular trip. It saves me at least half an hour and because I created it over time as I thought of things, I know it’s complete. No more leaping out of bed the night before the trip when I realize I forgot to pack my allergy meds!

Research Activities and Restaurants Ahead of Time
Obviously, you should leave some of your time for relaxing or spontaneous activities, but it does help to do some preliminary research on the options and plan a loose itinerary. If you’re on a special diet like me, it’s especially important to research allergen-friendly restaurants ahead of time. You might even call ahead to make reservations for a few meals.

Look for Coupons in Advance
About a month before you leave, look for online coupons for activities and restaurants in your vacation spot. JD at Get Rich Slowly recommends buying an Entertainment Book for the area, which will come in handy if you can manage to mostly eat at locations that offer Entertainment Book coupons.

“Plan” to Relax
For some trips, I plan a full itinerary. For example, our Irish honeymoon involved driving across the country, so most of our trip had to be planned in advance. However, when we went to Belize, we had a few ideas for what we wanted to do and also “planned” to spend a day on the resort property. That morning, we wandered around the property’s wild areas, went horseback riding, then my husband went into town to buy some Christmas presents while I got a massage. He returned to pick me up, then we went into town for dinner and to finish up our shopping. Since we weren’t overly scheduled, we actually returned home relaxed, even though there were a couple days when we had to get up at six a.m. for day trips.

Don’t Check Email!
My upcoming trip is sort of a working vacation at a conference I’m attending for a personal interest, so I will probably check my email once a day, but I didn’t check email when I was in Belize. I didn’t even give anyone at work the name or info for the resort. My husband gave the info to his office, but we realized at the end of the trip that the room was under my name and they had no record of his name (we don’t share a last name). So, he was effectively out of touch. You know what happened? Nothing. We returned home to discover that no crises had occurred. So, no matter how important you think you are, your clients, employees, employers, etc., can do without you for a week or two. Really. Heck, the governor of a whole state managed to skip town without leaving contact info and his state got by just fine (except for the ensuing scandal.)

Just a little advance planning and a commitment to relaxing (an oxymoron, I know, but it’s something we Americans aren’t good at), you can have a frugal, relaxing vacation and come home ready to return to the office.

This morning, Money Saving Mom pointed me to an article on Yahoo Finance that provided eight reasons why you shouldn’t use coupons.

As you can imagine, I got as feisty as MSM did! This article is completely ridiculous. So here are six reasons you should use coupons.

Coupons Save Money on Must-Have Items
Yes, sometimes I do buy toilet paper on supersale without a coupon, but I can usually find a coupon that will save me big bucks when combined with a sale. It’s not like I could stop buying toilet paper, so I might as well save money on it.

Coupons Help You Try New Products
I have tried new products, or new brands of products I already use, because I had a great coupon. It tends to be for things like cleaning products, not for packaged food that I don’t really have a use for. For example, I got a coupon for a green cleaner that I wanted to try, and I needed an all-purpose cleaner. Coupon+sale=a chance to try something new without spending a lot of money.

Some Coupons Get You Free Goods!
I’ve received free orange juice, free shampoo, free toothpaste, and a variety of other products free by combining a coupon with a sale.

Coupons Help Manage Food Costs
If you’re trying to save money on food, but want to buy more fresh, whole foods, then coupons can help you manage the costs of any canned, frozen, and packaged goods you need to buy. That leaves more room in the budget for locally-grown produce and grass-fed meat.

Coupons Save Money on More than Groceries
In addition to the usually food, personal care, and paper products coupons, I’ve received coupons to clothing stores, restaurants, and local services. If you need to buy new clothes or want to go out to eat, a coupon is a great way to get what you need or want while still saving money.

Coupons Make Splurges More Affordable
If you want to buy something expensive, for example a pair of Droids and the new phone plan to go with them, using coupons to save money in other areas makes that manageable. One of the big reasons we still manage to save money after buying a house, and even avoided debt while my husband was on disability, is because we’ve found so many ways to cut costs. Coupons are one of those ways.

Yes, you have to take a few minutes to flip through the circular and clip the coupons, but it’s really not that much time. I file my coupons at the same time that I pull out the expired ones, which is also when I plan my menu and make my grocery list. Simply match coupons to list and you’re done planning your coupons. Is that really so hard?

So, it finally happened. I committed the most unfrugal act of getting a smartphone. However, I still managed to squeeze a bit of frugality into it, even though it’s a big budget change.

Not only did I buy a smartphone, but I had to break my current contract and pay a $70 termination fee to do it! However, buying my husband a replacement phone for four months would have cost $40, so it’s really only a net loss of $30. It’s worth it to get our phones now.

Why I Got a Droid
As you’ll recall, my old phone broke back in January, right before my husband’s surgery. Although I had wanted an iPhone, AT&T made me cry, so I vowed to abandon them when my contact was up. Until then, I bought a cheapie phone that got me through.

Except, that both my husband and I were experiencing work-related reasons as well as personal reasons for needing smartphones with email and web access. Still we waited.

Then his phone broke. In the exact same manner as mine. Note to AT&T – when phones of the same model break in the exact same place for multiple users, this is a design flaw and you should issue a recall, not ignore the issue. This is why you lost a customer for life.

So, with the iPhone off-limits (not to mention that the recent news about iPhone 4 troubles didn’t make me lust for one), I looked around for the best alternative. Enter the Droid. Folks, it is awesome. I did my research and settled on Verizon phone service. We went to the Verizon store to look at the various Android phones. We then waited until July 15 to look at the Droid X, because if we’re going to do this, we might as well get the best available at the time.

As it turned out, a Droid X barely fits in my hand, so that was out. The HTC Incredible was unavailable for at least three weeks and I needed the phone by the middle of next week for an upcoming trip.

How I Made My Unfrugal Purchase Slightly Frugal
There was one other reason we opted for the Droid by Motorola rather than the Droid X or Incredible – it was buy one get one free. This was a savings of $250 over buying two Xs or Incredibles.

We also opted for a family plan with a minimal texting plan rather than the full talk and text plan. We studied our minutes and determined that we use more than 700 minutes, but less than 1400 minutes a month. We previously only paid for 700 because we had tons of rollover minutes with AT&T, so we were sad to lose that deal, but the 1400 minute plan does come with unlimited calls to 10 Friends and Family designees, so we can make it work.

So, our phone cost is jumping from around $95 a month to $189 a month, however, we still get $90 in reimbursements from our employers.

And folks, I’m not sorry I did it. I love this phone. Seriously love it. It will make my life easier in so many ways.

If you have a Google reader RSS feed or spend any time online, you’ve probably seen the ads for Groupon (the one with the photo of those gorgeous cookies!) I finally signed up for it a few months ago and took advantage of my first groupon about three weeks ago.

How Groupon Works
Groupon makes a deal with a local store (or sometimes a national store/service) to present a coupon that is good for a certain amount of dollars off a purchase or service. Restaurants, bakeries, spas, and local stores are common Groupon offers. For example, a restaurant might offer a $20 Groupon that is good for $40 off a restaurant tab.  In order for anyone to get the deal, a certain number of people have to buy the Groupon. If that threshhold is met, the Groupon is activated the next day and typically good for 12 months, but they will state it clearly if there is an earlier expiration date. Most Groupons meet the threshhold and your card isn’t charged unless it is.

There is only one offer per day per city, although you will see a “side deal” on the site. You’ll only get one email with the primary deal, though.

If you want to be sure a deal will go through before you buy it, look at the box below the offer price on the left. It will tell you how many have been bought. If the minimum has been exceeded, it will say “The Deal Is On” and tell you what time the minimum was exceeded (and what it was.) If it hasn’t been exceeded, it will tell you how many more need to be bought to activate the deal. You can buy Groupons as gifts if it’s just a few away and you really want the deal! Just be warned that you can only use one of them for yourself. You really do have to give the others away.

Why Pay for a Coupon?
Most of these coupons are great deals. I’ve rarely seen one that was more than double the face value, so if you pay $20 to save $40, your total savings is $20. Yes, you did have to pay, but paying $20 is still cheaper than paying $40.

How to Sign Up
Signing up is easy. Simply choose your geographic area and then provide an email address. You’ll get an email with that day’s offer six days a week (no offers on Sunday.)

If an offer is something you want to buy, then you complete a full registration with billing details so they can charge you. You only have to do this once.

I subscribe to two deal emails – one for Los Angeles and one for the smaller area of Los Angeles where I live. Most cities only have one list, but Seattle, San Francisco and Washington D.C. all have two or three more. Other areas like New York have a different setup for their different lists. Frequently the deals will be the same across all of the areas in a metro, but occasionally there are different deals.

If you’re planning a trip, you might start checking that city’s deals for any restaurant, spa, or hotel deals that could be interesting.

Other Ways to Find Groupon Deals
Sometimes a national deal will only be advertised in a few cities, but anyone can buy it. This happened with the deal I bought. I also subscribe to a couple of coupon blogs. Frugal Coupon Living posts alerts when great national Groupons are available. In my case, it was an Indianapolis deal.

My Groupon Experience
As I said, I found out about a deal in another city on a blog. It was $25 for a $75 coupon from Wine Insiders. I did a little research and discovered that they had 12-packs of wine for as low as $108, with free shipping. I would have to pay tax, but the final cost would work out to $5.70 per bottle. That’s slightly less than I pay for a bottle at Trader Joe’s, so as long as a bottle was worth more than $5.99, it was a good deal.

I jumped on the deal, and the next day I received an email that it was active. I went to my account and printed the Groupon. Even though I had 12 months, I knew I would forget to use it, so I ordered my Mystery Mix 12-pack within two weeks. The wine arrived about four days later. I researched the bottles and found that the cheapest was $9.99 and the most expensive was $19.99. That’s an average savings of $4.45 a bottle.

I’ve only been tempted by a couple other offers, but have only purchased one. If you like to eat, shop, go to the spa, or try new exercise facilities, give Groupon a try. It’s just one email a day that could save you big bucks!

Note: I’ll get $10 if you use the link above to sign up and then later buy a deal.

The USPS recently announced that they want to raise the price of stamps AGAIN. Now, technically, they’re only allowed to raise the price of stamps in accordance with the inflation rate, but this 2-cent increase is far more than the inflation rate.The Postal Commission will have to approve the increase, but you may be wondering why this keeps happening and what can be done about it.

Why Does the Price of Stamps Keep Increasing?
There are a few reasons why the price of stamps keeps increasing, but the internet is the primary one. Now that we send emails rather than letters and pay and receive bills online rather than by mail, the postal service’s first class mail service has rapidly dwindled. Most of the mail they deliver is junk mail, which commands a much lower rate than first-class mail.

The second reason is competition. FedEx and UPS have taken most of the package business away because many people simply don’t trust the post office to deliver their most important packages on-time.

The third reason is it’s just plain expensive to run a mail service. Several people have proposed privatizing mail service, but the simple fact is that no private company wants to deliver mail to every home in the U.S. It requires a huge workforce, which isn’t cheap. It also requires many offices, trucks, and other equipment. UPS and FedEx would have to charge astronomical rates to deliver magazines to every home in the US with the same efficiency as the postal service. It has to be done by the government because no one else wants to.

Should We Hoard Stamps to Fight the Increases?
When the price of the Forever stamps rises with inflation, you’re not really saving money because it costs the same in today’s dollars as it did to buy the stamps with yesterday’s dollars. However, when Forever stamp prices rise faster than inflation, you should consider buying a few extra books of stamps. They’re coming out with holiday Forever stamps this year – buy a few extra books.

Of course, that will only keep the cost of mailing a letter low. When the post office raises the price of stamps, they also raise the cost of shipping packages. Usually, the USPS is still the cheapest way to mail a package, as long as you don’t mind a little leeway in the delivery time. So, even if you hoard Forever stamps, you really won’t save that much money unless you never, even send packages and send a lot of cards and letters.

Personally, I’ll buy a few extra books if the increase goes through, but only 2-3. If I buy more than that, I’ll have to store them somewhere, which means I’m likely to forget I have them. Instead, I’ll stick with the convenience of buying a book of stamps when my old one runs out. It doesn’t cost that much more and I use them so infrequently that I can spot the post office a few extra cents to ensure that I keep getting mail.

Yellowstone National ParkOne of the best trips my husband and I ever took was our National Park loop. We started in Sedona, where we stayed two nights, then we traveled up to the Grand Canyon National Park for two nights. From there we proceeded to Bryce Canyon National Park for another two, and then finally hopped over to Zion National Park for two more nights. Even though we accidentally went during monsoon season (why didn’t any of our Arizona friends warn us?), it was a fantastic trip made even better by its affordability.

The National Park Pass
If you’re just going to one National Park, the entrance fee is $20 per car ( a few parks are $25). The pass is good for seven days, and doesn’t matter how many people you have in the car. If you’re arriving on foot, bus, motorcycle, or horseback, it’s $10/person (a few parks are $12), also good for 7 days.

If you’re visiting more than four parks on a single trip, or plan to visit more than four parks this year, spring for the America the Beautiful pass, which is $80 for one year. If you’re over the age of 62, a lifetime pass is just $62! If you have a permanent disability, the lifetime pass is free.

All of my relatives have ordered their passes when they turned 62. There’s no reason not to and the funds support our National Parks.

Camping in National Parks
Most National Parks offer camping. The few that don’t have camp sites inside the park have commercial campsite nearby and operate shuttles to those campsites. We ran into the problem at Bryce. However, the external sites were reasonably-priced and very close to the park. We actually got to camp in a teepee!

Of course, National Park campsites book up fast. Most use to reserve campsites, although the more popular campgrounds sometimes have their own reservations systems. The key to snagging a reservation is advance camping trip planning.

If you can’t camp, look into cabin sites or nearby private campgrounds. You can also try local hotels or motels, which may be more affordable than a hotel in a major city.

There are many advantages to camping however:

  • Food is cheaper because you cook it yourself
  • No taxes or additional fees except the reservation and entrance fees
  • Roasting marshmallows over a fire
  • Relaxing around a fire
  • Seeing stars and hearing wildlife

In addition, most parks offer Ranger activities for kids and evening talks and campfires. There’s never a lack of things to do in a national park! Once you’re in a park, you can usually use the park shuttle to get around, so you can leave your car at the campsite, which saves on gas (and helps reduce pollution in our National Parks.)

Top Ten National Parks
If I’ve whet your appetite for a National Park vacation, consider these ten most popular parks:

  • Yellowstone National Park
  • Grand Canyon National Park
  • Yosemite National Park
  • Grand Tetons National Park
  • Great Smoky Mountains National Park
  • Rocky Mountain National Park
  • Zion National Park
  • Cuyahoga National Park
  • Acadia National Park

Still not convinced? Check out these Yellowstone National Park pictures. That ought to get you in the mood for an affordable camping vacation!

My trip cost less than $800 for nine days for two people. That included food, gas, a national park pass, six camping nights, two nights in a hotel due to monsoons (seriously, a warning would have been nice), and a $180 rental car because neither of us wanted to take our cars. Four people only would have cost an extra $100 for food.

Another interesting post from LearnVest this week: What should be in your wallet?  This will, of course, vary by person, but they offer a few pointers for paring down your wallet. You don’t want the exploding wallet a la George Constanza!

However, I had to disagree about some things they suggested for wallets, because I either don’t need them or keep them in my purse instead. If I kept everything in my wallet, it wouldn’t close.

What’s In My Wallet
My wallet has slimmed down significantly since most of my store cards have been cancelled, but it’s still got quite a bit of stuff in it:

License/ID: Obviously my driver’s license needs to be in there because I drive. Even if you don’t drive, you should always have ID with you because it could be needed in an emergency. Behind it I have my organ donor card and a change of address card because California doesn’t issue a new license when you move.

One point of contention with the LearnVest article though. They said, “Stores have the right to ask for an ID when you use a credit card, so you need to have one ready to show them.” Although some state laws do permit the request, it’s a violation of the store’s merchant agreement with Visa and Mastercard to require ID. They can request, but can’t make showing ID contingent on completing the transation. Requesting ID protects the store, not you. The signature is considered your ID for the transaction.

Emergency contacts card: My husband and I printed emergency contact cards that we keep behind our licenses. In case we’re in accidents and are separated from our cell phones, any emergency workers who find our wallets will know how to reach our spouses/relatives in an emergency.

Credit cards: LearnVest recommends only carrying one, but I carry three. One Amex, one Visa, one Mastercard. I mostly use the Amex, but I rotate the other two at stores that don’t take Amex. Their recommendation is to use a Visa or MC branded debit card if a store won’t take your primary Amex, but that really wouldn’t have worked when I had to buy $1400 worth of furniture! I recommend carrying at least two cards, just in case a card is rejected for credit card security reasons, as happened to me at Cost Plus while buying furniture.

Debit cards: Again, I carry two. One for my regular checking account, one for my business account. I could probably stop carrying the biz account card since I only use it to deposit infrequent checks, but I know I’d forget to bring it when I did finally have to deposit a check.

Retailer Cards: I’m down to Goodyear at this point, so that card stays with me. When your car has 150,000 miles on it, a service emergency can happen at any moment!

Membership Cards: I keep my Blockbuster card and my Costco card in my wallet, but other cards have a different home. I also keep my library card in my wallet in a prominent pocket because I use it almost every week.

AAA/Roadside Service Card: Another must carry. If you’re a member and drive a car, you should always have it with you. You can’t use it if you don’t have it! AAA members can also use it if they’re a passenger in a non-member’s car, so there’s no reason to remove it for a road trip where someone else is driving.

Health Cards: One more must carry. Actually, for me, it’s three cards. Medical insurance, dental insurance, and FSA debit card.

Business Cards: One of mine and one of my husband’s.

Cash: I’ll be honest. There are times when I run out of cash. Before my husband had surgery, he went to the bank each week and then I’d take enough money for the farmer’s market out of his wallet. Any leftover went into my wallet. I rarely spend cash, so after a while, the total will get up there. Other times, I’ll spend all the farmer’s market money at the market and not have any leftover. After a while, my wallet starts to empty out. I have to remember not to let myself be cashless! Fortunately, there’s an ATM for my bank in my office park, so I can replenish if I’m going to a team lunch or happy hour.

What’s Not in My Wallet
LearnVest recommends a few other items that aren’t relevant for my life, or that I’ve found a different solution for.

Frequent Flyer Cards: Rather than put them in my wallet, I put them in my address book so I can look them up when I’m booking travel. I also registered at each airline’s website. All you have to do is sign on to the website to get your number. You can always go back and add your number to the flight record later if you forget.

Club Cards and Gift Cards: Rather than keep my CVS card, Ralph’s card, Vons card, and all manner of gift cards in my wallet, I keep them in a zipped pocket in my purse. That way I can easily access them, but can still close my wallet. Actually, I keep my grocery store cards in my coupon folder because I can use my phone number to get the discount if I need to run out for one or two items. The card isn’t really necessary unless you want it to print out the points you’ve earned.

Are you a keeper of a slim wallet or do you let it fill up with junk before finally emptying it?

I mentioned some of the new rules that were put into place with the CARD act, so you may be wondering, “Will these new rules affect my credit score?”

In a word, no. Of course, it’s not entirely that simple, but the rules were not intended to improve your credit score. They were intended to improve the credit atmosphere and curb lender abuses. Some of those may help your credit score, but that’s mostly incidental to the true purpose.

New Statements May Impact Your Balances
If the new statement designs encourage you to pay off your balances faster and reduce your debt to credit ratio, then your score will improve. So in a way, you could say it’s because of the CARD act, but it‘s also due to you getting your act together.

New Fee Limits Won’t Impact Your Score
Late fees themselves aren’t factored into your credit score. Payments made more than 30 days late are, but that has nothing to do with late fees or overlimit fees. The new rules don’t limit acreditor’s ability to report late payments.

New Interest Rate Rules Won’t Directly Impact Your Score
The new interest rate and payment rules won’t directly impact your credit score, but a lower rate and new rules that payments over the minimum must be applied to the highest rate balances may reduce your debt faster. Lower debt equals a higher credit score.

Tighter Lending Standards Might Impact Your Score
There are two ways that the tighter lending standards imposed because of the new rules could impact your credit score:

Your credit limit is reduced because you’re deemed too high a risk. If your limit is greatly reduced and you still carry a balance or use more than 30% of your available rotating credit, yes, your score will go down.

You make more credit applications and are denied. If you have to keep applying for credit because you don’t qualify under the tighter standards, your score will also suffer. If you’re rejected, you’d be better off fixing your credit and budget issues than you would be applying for credit with another company.

New Ads for Free Credit Scores
Aside from the CARD act, the FTC also imposed new standards on the free credit report companies. They now have to be clear that they’re offering credit monitoring for a monthly fee and the credit reports are included in that. Instead, most sites now offer a free credit score with a free trial of credit monitoring.

The new credit card rules weren’t targeted at credit scores, but if they help you better manage your credit and pay down balances, then your credit score may see a boost. Just don’t expect it overnight!

Yesterday marked the first day that banks had to ask your permission before automatically opting you in to overdraft protection when you open a new account. They have until August 15th to beg existing customers to keep the coverage, at which point everyone who doesn’t actively choose it will be opted out. Some banks, like Bank of America, are abolishing their overdraft protection program altogether. As for the rest, don’t fall for the queries asking you to sign up, because most of their arguments just fall flat.

Overdrafts Don’t Affect Your Credit Score
Overdrafts don’t hurt your credit score. That’s because checking and savings accounts don’t appear on your credit report. They’re not loans or debts, they’re cash, and therefore not reported to credit agencies.

Overdraft Protection Doesn’t Save You Money
The new rules only apply to ATM and debit card transactions, not bounced checks, so overdraft protection won’t save you money on bounced check fees. In fact, NOT having overdraft protection WILL save you money because your purchase or withdrawal will be rejected. So, just make sure you always have $20 in cash in your wallet or access to a credit card in case you’re at a restaurant and didn’t realize your balance is low.

Checks and Automatic Bill Payments Are Exempt
If you write a bad check, you’ll still get hit with fees. The same holds true if an automatic debit hits and you don’t have the cash in your account. So if you opted into OP to protect your mortgage payments, you might as well opt-out. OP doesn’t protect you.

Overdraft Protection Alternatives
So what you can do to avoid overdrafts from any source? It’s actually quite simple.

1. Track your spending and upcoming debits. Don’t rely on your ATM balance to tell you how much money is in your account. You may have other payments that will hit that same day and put you over the limit even if your debit cleared earlier.

2. Sign up for low balance alerts. Many banks offer a program that will send you an email or text alert if your balance drops too low. Then you can either stop spending money or find some cash to deposit into your account before you overdraft.

3. Budget. Budget. Budget. It’s that simple, people.

4. Use a credit card. If you have a credit card, then charging the purchase may be cheaper than a $20-$35 overdraft fee, even if you have to pay interest for a month or two. Of course, this assumes you can actually afford the thing you’re buying. If you can’t afford it, then no amount of overdraft protection will make it affordable.

So, have I convinced you that you don’t need overdraft protection? If you still feel you need it, then you also need to ask yourself some hard questions about why you can’t balance your checkbook and spend within your means. Is spending hundreds of dollars a year on overdraft protection really helping your budget?

Yesterday, LearnVest (a cool financial blog for women) offered a post about the true cost of a child to age 18, and offered some tips for preparing for a baby. The post includes a cool info-graphic that outlines the USDA’s tally. Learnvest says:

“Take a deep breath: According to the U.S. Department of Agriculture, a baby born today to a middle-class family will cost about $221,000 by the time she turns 18—not counting college! For more info, look at a detailed breakdown of child-rearing costs. Before you fall into a dead faint, remember that you won’t shell out that whole sum at once.”

Child Cost Breakdown
The biggest portion of the child expenses is housing, which you’d have to pay for anyway, however housing may cost more once you have a child. Many families opt for a bigger house. Most of us don’t want to be living in a one-bedroom with a two parents and a 15-year-old!

If you really think about, most of the costs the USDA details are manageable over 18 years. It’s just $12,777 a year. Obviously, children are most expensive in the early years when they need childcare unless one parent can work from home or become a stay-at-home parent. The expenses ease up a bit once children start school and are old enough to watch themselves. But that doesn’t last long, because then come the teen years, with cars, pricier clothes, and gadgets galore.

Preparing for Baby Costs
The next portion of the LearnVest post offered six tips for preparing for baby costs. The first one made people go nuts! It was: “Plan to have at least $20,000 in the bank at the outset.”

Most people were outraged at the very idea that they should have to save a lot of money for a baby. And it’s true, many families don’t. However, do you really want to start your new baby’s life by going into debt just to get her out of the hospital? Even if you have insurance, there will likely be some cost. Most insurance plans require a deductible. Some plans have an additional maternity deductible.

Then there are things like diapers, extra food for you if you breastfeed, formula if you don’t, baby clothes once the baby grows out of all that adorable stuff you received at your shower, medical insurance premiums, etc. Yes, you can save by choosing cloth diapers, breastfeeding, and making your own baby food, but there will still be expenses, even if you’re super-frugal.

That figure also includes childcare. If you already have childcare worked into your budget, then you may not need to have $20,000 in advance, but plan to spend around that much for first year expenses all together. Pay as you go is one option, and it works if you budget carefully, but it never hurts to have a little extra in ye olde savings account either!

My husband and I are heading in the general direction of parenthood and we’ve already started working on our budget and plans. So far we’ve: bought a house with room for a nursery/child’s room, made plans to replace my car with one that will fit a stroller/baby-seat, decided on cloth diapers, budgeted the cost of childcare, and decided to make our own baby food once it’s on solid food. And I’m not even pregnant yet! If you’re considering children, it’s never too soon to start planning for that event. Save now, while you can.

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