Facing Family Finances

Facing Family Finances

By the time your child leaves the nest, the U.S Department of Agriculture estimates that he'll cost you about $230,000. That's a lot of money and can put a strain on any family. In fact, 57 percent of divorced couples in the U.S. say money was the cause of their marital problems. To prevent problems stemming from money issues, it's important to learn about the major expenses that your family is likely to encounter, then plan accordingly.

New baby, new expenses

According to Kiplinger's Personal Finance Magazine, new parents with a healthy dose of baby-fever can spend in excess of $6,250 getting ready for the stork. While Uncle Sam lets you deduct about $1500 per year for child care, finding the rest of the money will require couples to be clever with their money.

Young families will also have to make some important decisions about housing. That convenient apartment downtown may not make sense when you've got a child running around. With a growing family, choosing where you live becomes a lot more complicated. All of a sudden you need to know about the schools in a prospective community. Should you rent or buy? Is the neighborhood safe? Will the commute mean you need to buy another car?

A family affair

All right. Your kids are a little older now, and you've gotten the hang of the family finance game. This is a perfect time to start teaching your kids how to be smart with money. While financial skills aren't something kids will necessarily learn in school, they're a critical part of your child's future. Not to mention your present.

As your kids get older, consider encouraging them to get part-time jobs where they can earn their own money. By launching a small entrepreneurial venture -- such as house cleaning or landscaping -- your kids might uncover hidden talents and skills they never knew they had. Also, volunteer opportunities can help kids gain valuable work experience, even if they don't bring home the bacon. While your kids are still young, you may want to explore joint-checking accounts or other ways you can help teach your kids the basics of financial responsibility.

College quest

As high school graduation approaches, those families who have college-bound kids have to really start figuring out how they're going to deal with those college tuition bills. If your family has gotten a late start on saving for college, don't panic -- aid is available. In 1995-96, about 50 percent of college students needed financial aid -- an average of $5,000 worth.

To make sure the amount your child will owe upon graduation isn't too burdensome, encourage her to choose her school wisely. Some things to look into include:

• Co-operative education programs that alternate academic and paid work experience.
• Accelerated college programs where your child can complete their requirement in three years.
• Two-year community colleges where tuition is relatively inexpensive compared to four-year schools.