We love them dearly, but children aren't cheap, and while they like to think they're adults, they keep gravitating back home.

Raising children seems to be getting more costly, whether you have a baby or a 25-year-old.Childcare fees are rising, iPods and mobile phones are now essential equipment for teens, and those in their 20s aren't in a hurry to leave home. If we waited until we could afford to have children, most of us would never have had them at all. You just make it work. But with a quarter of your income likely to be spent on raising children, the more you prepare the better off you will be.

 

Plan ahead

Conception is a good place to start. Get used to living on one wage before you have a baby, just in case you decide to take a break from the workforce to raise your child. This will prepare you for parenthood on a single wage, and with the extra cash saved by spending only one income you can build a handy emergency fund.

Most families with young children struggle to get on top of the mortgage and pay off the credit card each month. The last thing they want to think about is putting money aside to cover tertiary education and teenage expenses. But the earlier you start investing, the more time you give your money to grow. Take advantage of compounding, and earn returns on your returns. Putting as little as $100 a month into a managed fund or high-interest savings account for more than five years is a great way to build a nest egg for your children. Treat it as an expense in the family budget and contribute as much as you can.

It's also good to find out what help you may be entitled to. Visit www.workingforfamilies.govt.nz for more information on the Working for Families Tax Credit or help with childcare costs.

 

Put yourself first

It seems that as soon as our tiny bundles of joy are out of nappies, they're asking to borrow the car. We love our kids, and it would be fantastic to buy them a car or save a home deposit for them, but you can't shower them with gifts at the expense of your own financial future. Your children are going to depend on you for money for a long time as it is, so it's important they also learn financial independence and responsibility. The best gift you can give your kids is a good financial education, and the rest is up to them.

 

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