Almost every time I read an article about funding your child’s education, it turns into a discussion about saving for college. Coverdell plans, 529 plans, how to handle the FAFSA - all of this stuff is standard personal finance fare. But all of it overlooks the first eighteen years of your child’s life - the period in which most of their education and learning will actually occur.

I watch my two year old right now and I see him learning all the time and building skills for the future. I have nieces and nephews ranging from age six to age fifteen and they’re all learning all kinds of things. Every single one of these children would benefit from some extra emphasis on their education right now.

Overlooked Opportunities
There are countless opportunities to improve your child’s education and growth right now instead of further down the road. Here are some ways you can invest immediately in your child - figure out ones that work for you and try them.

High-Quality Day Care and Preschool
Put $20 less a week into college savings and instead get your child into a better child care opportunity. Paying for a preschool that can give your child educational growth opportunities is well worth the extra cash you put in.

The question of daycare or no daycare is one I’ve covered before. Some parents may find it better for one of them to stay at home with the children, at least until they’re in school - it depends on your situation. Either way, a top-notch preschool or great day care or a parent staying at home are all expensive.

Private School
When your child enters school, most likely you’ll send them to the local public school without skipping a beat, but you might want to consider rerouting some of that educational savings into the cost of private school. Private school is an issue I’ve discussed before as well - my take on it is that it depends wholly on the quality of the district you live in.

I’m lucky to live in one of the best school districts in one of the best educational states in the country - I live in Iowa and found out about the quality of my local district at IowaSchoolProfiles.com. Thus, the benefit my child would get from private school versus public school is much less than the benefit that would be found by a student in a poor public school district.

If your choice is between putting your child in a poor public school district and saving $8,000 a year for college, or paying $8,000 a year for private school tuition, you might want to strongly consider the latter. It will set your child up to succeed later on with better test scores and a stronger education before they even get to their standardized tests.

Educational Opportunities
Several times during my school years, I had opportunities for educational growth that I was unable to take advantage of because of the cost. There would be $200 or $500 or $1,000 fees involved and my parents were simply unable to help with those costs, and so I missed out on things like taking advanced coursework, traveling around my state to speak, helping with at least two large national conventions, and other opportunities. Perhaps most painfully, I missed out on an opportunity to participate in a summer program at a technical institute in Germany for advanced math students - I really wanted to go to this and even applied without my parents’ permission, but there simply wasn’t enough money. I still remember throwing away that acceptance letter without telling anyone about it.

Having the money available to give your children great educational opportunities, especially in junior high and high school, can transform a good student into a great one, fueling their passions and letting them explore the world.

Travel
I’ve found that the opportunity to travel has taught me so much about the world - and so much about myself. Even just traveling within America, I’ve witnessed an incredible amount of diversity: different lifestyles, different foods, different cultures, different people, and so on. When you go international, your mind spreads even further and you begin to realize how much diversity and how many opportunities there really are out there.

My childhood never exposed me to such diversity, unfortunately, and that caused a pretty steep learning curve when it came to interacting with and understanding people from different cultures later on in life. Luckily, I had a number of friends from different cultures who were very understanding, particularly a group of Chinese students who “got” that I was just clueless, not hurtful, and if I said something completely wrong, it was borne of misunderstanding.

I’d rather my children be exposed to the diversity of the world much earlier than that, and to do that we’re going to travel significantly in the future. I plan on lengthy trips to international locations, particularly with the goal of spending most of the time off of the beaten path.

Exploration of Interests
When I was in school, there was one child that was oozing with natural musical talent. He’d do stuff like drum out complex rhythms with his finger on the table, he could sing quite well, and during music class, he intuitively began to pick up the piano in just a few minutes. When he was asked to join the band, however, he declined. Why? I later found out it was because he knew his parents couldn’t afford the instrument.

That’s not a situation that I’m ever going to allow my child to have to live through. There will be money for them to explore their interests, whether it’s music or physics or chemistry or engineering. If they start showing passion for something and growing in that direction, we will support that growth.

Benefits of an Earlier Emphasis on Educational Spending
All of the above are educational costs that sometimes get overlooked in the rush to save for college, but they can all set the table for your child to do very well academically and personally. Here are a few benefits of pointing at least some of your educational savings in the direction of helping them grow earlier on.

Improved test scores are the direct result of many positive childhood factors: travel, music, a better school, and a better preschool all contribute directly to improved test scores later on. Those test scores can help your child win scholarships, get into a better school, and line things up so that they can chase their dreams.

Improved problem-solving skills and self-reliance are also the result of good activities, particularly those that are self-directed. Educational opportunities where your child can take the lead and really get excited are worth their weight in gold - not only do they learn material, but they learn life skills, too.

Discovery of passions and interests early can also help the child figure out what they want to do with their life so they don’t make bad (read: expensive) educational choices in college. Going into college without a clue about what you’re doing has a huge cost - it can tack years onto the college experience and can often result in people being unhappy with their careers and going back to school. Helping your child discover their passions earlier on can really help, and you can only do that by fueling their interests and personal growth.

Think Different: Start a Separate Education Fund
My wife and I have a solution to this problem. We’re starting a separate “education fund” for each of our children and putting a bit each month into this fund, almost as much as we’re putting into their college 529s. Later on, when opportunities for them come up, we’ll use this money to pay for it - they’ll never lack in terms of being able to take an educational trip or explore a new area of intellectual interest.

We view this as an investment in them, just as a college savings plan is, but it’s one that will bear fruit sooner and it’s one that we’ll use throughout their childhood, not just when they’re leaving the nest. In the end, we believe this strategy will help them become better adults than just funding their college education will be.

What kind of investment? For now, the fund is merely a savings account for each of them. Eventually, we may consider other investments, but they’re likely to be rather conservative - the riskiest move we would make would be to buy a broad-based index fund.

A few weeks ago, I posted an article written by Carrie, a close friend of my wife who has been using cloth diapers for her daughter, Elizabeth, since the baby was born. The analysis of cost that Carrie provided was a huge hit (67 comments as of my writing) and convincing enough that it got my wife and I to attempt cloth diapering on a small scale with our daughter, who is about six months old. Here are the notes on our real world experience as parents used to disposable diapers trying out cloth diapering for the first time in an effort to save money.

Our Current Diapering Costs, Financial and Otherwise
Since our son was born, my wife and I have used high-end disposable diapers (namely, Pampers Swaddlers/Cruisers) largely because of their convenience: they’re very easy and quick to put on, almost never leak, and have no maintenance cost or effort whatsoever. Here’s more information about our disposable diaper buying process if you’re interested.

Over the long period of raising our son and our daughter (our son is just over two and our daughter is six months), our total cost average for disposable diapers comes out to 26 cents a diaper.

However, for us there’s another cost. Disposable diapers are one of the worst things you can put into a landfill - and we certainly do produce a lot of them. To us, the environmental damage caused by disposables is a real cost, one that bothers us and we’re committed to changing.

Selecting a Cloth Diaper
The biggest factor that drew us to using Swaddlers/Cruisers is their convenience and quality - they’re easy to put on, easy to dispose of, and rarely leak. It minimizes our time with every single diaper change, and that saved time gradually adds up like interest in a savings account.

When we decided to dip our toes into cloth diapers, we looked at several different options and eventually went with bumGenius. These diapers are designed to effectively replace disposables - and they’re amazing. They’re constructed so that anyone who can handle putting on a disposable can immediately pick up a bumGenius and know exactly what to do. There’s no “plastic pants,” no confusing process to put the diaper on, and our daughter seems to be quite happy with them on (except at first she would sit funny while wearing them because they’re proportioned differently than disposables). So far, we’ve seen no leakage at all.

However, these diapers are expensive. They’re available for $17.95 a pop at Amazon - if you dig around, you can shave maybe a dollar more off of the price. That’s a significant investment, and so we bought only three for our test run.

Challenges
Just to make things clear, if we’ve previously spent $0.26 per disposable diaper in the past and are now using bumGenius at $17.95 a pop, it would take 69 uses of the bumGenius just to get down to the cost of the disposable - and that’s not including laundry cost. If you go this route, realize that the number of washings you have to do to recoup your cost versus disposables is very high - but what you get for that price is much greater convenience per diaper change.

Putting them on and taking them off is easy, but what about the washing process? Following the directions led us to using a separate load for just those three diapers so far - basically, we just rinsed them quickly to get rid of any solid waste, then ran them as a normal load of laundry except with additive-free laundry soap and a second rinse cycle. We then dried them normally, and we calculate that this complete process costs about $0.08 all told. That extends the “break even” point out to approximately 80 uses of the bumGenius diapers to get them down to the price point of the disposables we normally use. My estimate is that we could wash about 25 of the bumGenius diapers in a single load if we were to scale up, which would help.

Are We Going To Scale Up?
After using these three diapers several times, I think we’re both happy enough with the process that we’d be willing to scale up to a much larger number of these diapers - with one caveat. It entirely depends on whether we are going to have a third child. With just the two children we have, we’re not fully confident that each diaper would get the 75 or so uses that it would require to reach the break-even point. With a third child, our scale changes - we would definitely reach the break-even point with a lot of room to spare.

Recommendations for New Parents
If you’re an expectant parent out there wondering if cloth diapering is worth the added hassle, my conclusion (having used disposables for years and now trying bumGenius) is that it’s definitely worth it, but that with more cumbersome cloth diapers, it would probably not be worth the effort. My suggestion, if you’re on the fence, is to request a few bumGenius diapers as a baby shower gift, then mix them in with the disposables. If you find the cloth ones work just fine for you - something we just now discovered is true for us - then scale up and go to primarily cloth diapering.

Over the long haul, the financial savings is real, even with expensive cloth diapers, and the environmental savings is quite real, too. It’s a frugal choice that I think my wife and I are both happy with.

One of the most controversial subjects that I often touch upon is that of daycare. Some people are adamantly opposed to even suggesting the topic, stating unequivocally that taking your child to a daycare is a detriment to them. Others speak very positively about it, looking at it as a way to balance a child’s experience, enable more family income, and allowing parents to be refreshed and focused on their children.

Is daycare really necessary in modern life? If both parents intend to work professionally outside the home, particularly when the child is under school age, daycare often becomes a necessity. But is the financial freedom gained by both spouses working balance out with the benefits and drawbacks of daycare? It’s a good question that’s bound to open up a big can of worms.

What Constitutes Appropriate Care for Children?
I think there are four things that really need to be addressed for care of a preschool-aged child:

Love, or a deeply caring provider A small child deserves someone taking care of them that loves them, or at the very least has a deep sense of caring about their happiness and well-being. A caring individual will give the child attention, console them well, and develop a bond that’s vital for emotional growth.

Basic personal needs A child needs food, diaper changes, a clean place to be, medical care, and so on - the nuts and bolts of sustaining health and life.

Socialization A child needs to interact with a diversity of people in order to learn to interact with others of all shapes, colors, and sizes. Establishing a comfort level, both with peers and with older and younger people, not only brings deep fulfillment to children but builds in them basic social skills and self-confidence, both of which are needed in the real world.

Education and experiences A child needs someone to learn things from, from the basic stuff of how to brush your teeth to a trip to the fire station to see how the fire truck works. The world is full of richness and vibrant life that a well-rounded child needs to be exposed to.

Obviously, the biggest asset a stay-at-home parent brings to the table is love. There is no stronger advocate for a child’s all-around well being than a concerned parent - no paid provider can really compare to that. Also, a stay at home parent can provide basic personal needs at a high level, likely equal to or better than a daycare can.

A daycare provides that basic care element quite well, and by their very nature provides a rich environment for peer-to-peer socialization. Good daycares go beyond that, providing fulfilling experiences for a child that, in some cases, can’t be matched at home. However, a baseline daycare does not provide for a child as well as a stay-at-home parent can.

Parental Needs
Statements like that are often enough to fully convince people to become stay at home parents, but they’re not the full story. The parents themselves have issues of their own to manage:

Money needs Many households simply can’t make it if both parents aren’t working. That’s the economic reality today. To state that a “poor” family shouldn’t have children - an argument I’ve heard before - is patently ridiculous, as a loving family that wants to have a child should have all the opportunity in the world to have one.

Emotional needs Being a parent is emotionally and personally demanding. Many people need a diversity of experiences in their lives in order to be able to survive. Many parents are able to devote a few hours a day of uninterrupted love and attention to their children, but after that period, they’re emotionally spent, and further time leads to conflict. This is human nature - no matter how much you love a person, no one has infinite patience.

Fulfillment needs For many people, working outside the home gives them a deep sense of personal fulfillment, one that when balanced with caring for a child makes them a very complete and fulfilled person. That complete and fulfilled person is a person who will be a stellar parent for a child.

Finding the Right Balance
Balancing all of this stuff isn’t easy. Parents everywhere have to make some difficult decisions, and different parents are going to come to different conclusions. Stay at home parenting is the right answer for some situations. For many others, daycare is the right situation.

Maximizing daycare My wife and I concluded that the best solution for us was to find the best possible daycare in our area, one with providers who were adequately compensated and genuinely cared about the children, provided substantial amounts of fulfilling activity for all age levels, and had a full open door policy for parents to visit as they wished. Quite frankly, our standards were very high - we visited eight daycares and said no to all of them. The only daycare we found that really matched the level of care and experience we wanted for our child was an expensive one - it was also challenging to get a slot, as they are pretty rigorous about maximizing the space for each child and keeping the ratio of adults to children at a very impressive rate.

This was worth it to us. Our children get a great deal of education, interaction, and fulfillment at daycare - they are exposed to a lot of different concepts, often using a level of creativity that impresses me. Meanwhile, my wife and I both have the time to not only earn a good wage, but also to get the kind of well-rounded personal fulfillment in all aspects of life that we need to be the best parents we can be.

Maximizing staying at home On the flip side is a parent that chooses to stay at home. There’s a different set of demands here. The commitment of spending a full day every day with the child, the need to seek out socialization opportunities and have learning and enrichment opportunities as well, and the need to find personal space as well (which, when lacking, degrades your parental abilities).

It takes a special person to be up to those challenges, and it should be a goal that you set for yourself not just over the long haul, but every single day. If you can commit to that, then being a stay at home parent is probably the best thing that could happen to your child - but it’s not a commitment that most people are psychologically able to make.

In A Nutshell…
Children need a lot of care. They need to have their basic needs met, and they deserve much more: love and caring relationships, socialization, and additional enrichment and experiences. The answer to providing those things isn’t so easy, and it depends a lot on your set of skills and talents as an adult.

You owe it to your child to figure out what the best balance of these areas are for your situation. Never let a sense of guilt or disdain imposed by others because of your choice cause you to second-guess what you’re doing. There is no formula for the right answer, but if you look at the options available to you, look at your child’s needs, and look at what you need to be the best parent you can be, an answer will emerge that’s right for you. Don’t just settle for the quick, easy, or cheap answer though - be patient, listen to your own heart, and find what’s right for your situation. Make the choice that will give your child the best chance to develop into the kind of young person that every parent can be proud of, a well-balanced child with all the tools he or she needs to chase their dreams and perhaps change the world.

Several readers wanted a real-world analysis of the costs and benefits of cloth diapering. Luckily, my wife’s closest friend, Carrie, is cloth diapering her daughter Elizabeth and has contributed this lengthy analysis of cloth diapering. Carrie writes some notes about parenting and art at her personal blog, Dangerous Crayon. I have some notes in response to this that appear in th first comment. Take it away, Carrie!

Recently, when The Simple Dollar told readers to ask him anything they want, there were several commentors who asked for a cost benefit for cloth diapering. While there are lots of resources out there to analyze this, I thought I’d take a shot at figuring out in my own situation what the cost of cloth diapering has been over Elizabeth’s first year of life.

My methodology is a little hazy, but hopefully it’s decent enough to give a realistic analysis. If you have suggestions for other ways to provide a better view of the cost, please advise me, and I will report back!

The Background

All of our appliances are electric. I wash diapers approximately 3 times a week. My wash routine for the majority of the year has been: 1 cold wash and rinse, no extra rinse, no detergent; 1 warm wash and rinse, extra rinse with detergent, 1 cold wash and rinse, no extra rinse, no detergent, typically followed by 2 - 45 minute dryer cycles. I found this to be most effective for me. Some people do fine with a cold rinse, warm wash with 1 extra rinse, which could potentially reduce the amount of water and electricity used by almost half.

Currently, I change diapers about 7 times a day, making for about 50 diapers a week. Even though diapers were changed more frequently in early months, I figure this is a reasonable number to use, so that makes for about 2,600 diaper changes per year. On a side note, if it takes about 1 minute to change a diaper (ha, right!) then that means I’ve spent in the neighborhood of 44 hours changing diapers - that almost 2 full days of diaper changes!

My diaper stash is a mix of inexpensive (prefolds, pins, and cheap covers) and the pricey (pocket diapers). The way I figure it, I have about 53 diapers - 30 infant prefolds or fitteds that were used up to about 14 lbs, 12 premium prefolds we’re using now, and about 11 one size diapers that we’ve used all along. Over the course of the past year, we’ve purchased some disposable diapers, and we were give some as gifts. I figure we used about 360 disposable diapers - usually when we were gone on vacation somewhere, which, with all of our family and church activities, was in the neighborhood of 6 weeks. We also used them occasionally when diapers weren’t washed in a timely fashion.

The Numbers

The total value of my cloth diaper stash is $705.53 *
Detergents - $51.00
Utilities (water and electric) $173.55**
Total cost for cloth diapering in Year 1 (2007) - $930.08

If one assumes that 50 diaper changes a week is a reasonable yearly average, then, if we cloth diapered exclusively, that would work out to 2600 diaper changes in 2007. Considering that we know we did about 360 changes less than that average, we will use 2240 as out number of diaper changes in 2007. That works out to about $ 0.42 per washed diaper in Year 1.($930.08/2240)

* This number includes ALL diapering items - prefolds, covers, snappis (replaces diaper pins) onesize pocket diapers, reusable cloth wipes, diaper pail and reusable liners, a diaper sprayer to remove solids from diapers, and a few other miscellaneous diaper accessories.

** To calculate utilities, I made a basic assumption that the increase in cost between 2006 and 2007 is all diaper related. The reality is that utility rates have increased, there was additional baby-related laundry, and we used the air conditioners more in the summer of 2007 than we had in previous years. I believe the actual cost related to cloth diapers would be noticeably lower. We used less water in 2007 than in 2006 because of changes in the number of people living in our home (1 adult was replaced by one infant) But, for grins, and because we had changes in people and fixed several plumbing leaks in 2007, I’ll go ahead and include a cost for water. In electricity, we used about 1732 kWh more in 2007 than in 2006.

Less than $1000 doesn’t seem to bad, but it doesn’t seem too far from what you might expect to spend on disposable diapers. However, one must consider that these diapers should last us another year, so the only additional expense in Year 2 should be utilities and laundry detergent. If we assume that the prices on those items will remain constant, then over the course of 2 years, the cost would be more like this:

Year 2
The total value of my cloth diaper stash - $0 - bought it all last year
Detergents - $51.00
Utilities (water and electric) $173.55
Total for Year 2 in cloth - $224.55

Not too bad. I think I can scrounge around and find that in pocket change over the course of a year!

Total for 2 years in cloth: $1154.63

If we assume 2240 diaper changes in Year 1, and lets assume that there will be fewer diaper changes in Year 2 (we’ll say on average 5 changes per day - 1825/year) then we would say that over the course of Year 1 and Year 2, there will be 4,065 diaper changes. That gives us a cost of$.28 per diaper change.

Comparing to Disposables

Since I haven’t used disposable diapers exclusively, I will have to estimate the cost for Year 1 and Year 2 diapers, based on the same changing habits. I went to my local big-blue-box store, and priced out diapers in the lower range - the White Cloud store brand. I priced at purchasing in bulk when possible, and since in real life we can only buy whole packages of diapers, I “bought” however many packages I needed to cover the number of changes, even if I ended up with extras. Since the cost per diaper of disposables varies depending on size, I reviewed Elizabeth’s growth chart to guess the number of weeks that she would have been in a given size, still using the 50 changes per week. (This, I think, is under-estimating since there are more diaper changes in the first few months.) I’m also assuming 2.5 wipes per change because my experience is that I’ll use one wipe for some changes, and 6 or 7 for the messier changes.

Year 1
NB - 100 changes, 3 pkgs (40/$6.97) - $20.91
Sz 1 - 100 changes, 1 jumbo( 88/$12.74), 1 regular pkg (44/$6.97) - $19.71
Sz 2 - 400 changes, 5 pkgs (80/$12.74)- $63.70
Sz 3 - 2000 changes, 24 pkgs (84/$13.98) - $335.52

Wipes (at 2.5 wipes per change) 6500 - 11 pkgs at (648/$11.82) - 130.02

And, just for fun - Diaper Genie 2 - $29.96 and 15 refills - $89.10

Once we figure sales tax in, this comes up to about $858.83 for Year 1, or about $.33 per diaper change (yes this is a little fuzzy, because it does not account for the extra diapers purchased in each size.)

Year 2

Assuming that children use fewer diapers on average per day as they get older, I’m pretending that Elizabeth would have about 5 diaper changes per day, for a total of 1,825 changes in a year. If that were split evenly between the next 2 sizes, then it would look like this:

Sz 3 - 913 changes, (84/$13.98) - $153.78
Sz 4 - 913 changes, (72/13.98) - $181.74
Wipes (at 2.5 wipes per change) 4680 - at (648/$11.82) - $94.56
11 diaper genie 2 refills - $65.34
Total cost in Year 2 after sales tax - $495.42, or about $.27 per diaper change.

Total cost to use disposable diapers for 2 years - $1354.25
Assuming 4,065 diaper changes over the course of 2 years, that gives us a cost of $.33 per diaper change.

If you were inclined to use more expensive brands - I priced out Pampers’ Swaddlers and Babydry style diapers - then you could expect to add about $90 in the first year, and about $100 in the second year, for a total of $1601.83 to diaper for 2 years in a more expensive disposable.

Conclusions

Year 1, Cloth - $930.08
Year 1, Disposables - $858.83

Year 2, Cloth - $1154.63
Year 2, Disposables - $1354.25

If I had opted out of a larger stash, and some accessories, I believe that the cost in Year 1 of cloth diapering would be on par with the cost of disposables.

Since most children are not potty trained by one year, I would say that cloth is cheaper, even when you have some of the more expensive diapers. Actually, for the money that I “save” by using cloth - $199.62 - I could have added more than 8 pocket diapers to my stash, and still come out on top.

Factors That Make Disposable Diapers More Expensive Than Calculated

The brand As I indicated above, if you go for a more expensive brand, it will cost you more. One of the reasons I opted for cloth is that I think there are health benefits to avoiding disposables. If I use disposables, my preference is brands like 7th Generation, which have fewer dioxins, and hopefully, are healthier for babies. Those brands are even more expensive than brands like Pampers.

The size of the package Some parents are cautious about buying in bulk, since it means you could be stuck with lots of diapers in the wrong size. Some parents don’t have the upfront cash to buy diapers in bulk, so they end up spending more per diaper when they buy smaller packages.

Frequency of changes While I used a 50 change per week average, the truth is, diapers should be changed more frequently for health. We shouldn’t be letting the disposables fill until they are falling off the bottoms of the babies. More diaper changes mean a noticeable increase in expense with disposables, while with cloth, more changes do not significantly impact the number of washes. More changes mean the cost per washed diaper keeps dropping.

The leaks The times that I used disposables, I found that they tended to leak more, which sometimes rendered clothing stained beyond public wear.

The garbage Although I haven’t personal experience with this, some people have reported to me that their garbage service charges more, because they set more bags/barrels of trash out on the curb.

Factors That Affect Your Personal Cost to Cloth Diaper

Your stash If you go with the cheapest end of cloth diapering - all prefolds, inexpensive covers, inexpensive detergents, then you will see a greater benefit. If you use the most expensive options - all-in-one diapers or pocket diapers, then your cost recovery will be much slower. If you buy a large stash, the diapers individually will last longer, but of course, the cash outlay for 48 pocket diapers is substantially more than that for just 24.

Your routine If you wash more often, or have more rinses, etc., then you’ll see greater utility costs.

The number of children The more children you have who will wear the same cloth diapers, the greater your savings.

And, if you’re not convinced that cloth is less expensive (aside from the potential health and environmental benefits), check out these sites:
Punkin-butt: Diaper Dollar
Cloth Diapers: Can I afford to cloth diaper?
Nicki’s Diapers: How much money can you really save?
Pinstripes and Polka Dots: how much will cloth diapers cost?

When I was young, I dreamed about a lot of things. I wanted to be a writer, writing things that genuinely changed people’s lives. I wanted to have children and be a father to them like Ted Arroway without the collapse. I wanted to visit lots of different parts of the world and see how people actually lived, beyond the tourist areas.

When I got a little older, I had to make some choices. I could be “financially responsible” and start preparing for some big dreams … or I could take the easy path and bust out the credit cards. I looked down both paths… and then I started buying stuff. I filled my home with DVDs and books and electronic equipment and other stuff I didn’t really need - and that I already scarcely remember.

I started feeling the regrets before I was even twenty eight years old. I had a pile of debts that pretty much locked me into my current career path. I had almost no time to become a writer. I had a child, but I wasn’t spending the time with him that I wanted because the need for more money fueled my activities. I obsessed over work (even to the point of interrupting planned family events) and when work was done, I played hard, too.

Soon, I began to realize I was trading my dreams for a pile of stuff. I was swapping all of the things I truly wanted to do for some minor experiences that didn’t really stick with me. I was broke every week, but the reason I was broke wasn’t because I was chasing my dreams - it was because I was buying a mountain of scarcely-played DVDs and video games and spending my spare time dumping my money into sports cards and other ludicrously expensive “hobbies” such as stocking my home with the latest electronic goodies.

I gave these things up. I made some changes in my life. I stopped spending on the silly things and started “spending” on the big dreams. I spent my spare time practicing my writing and spending time with my children, and “spent” my money socking it away in savings so that it could help me during the lean times of chasing my dreams.

When I’m an old man, I won’t regret not buying that flat panel television or that Lexus. What I might regret is the thought that I spent my money on stuff instead of on opportunities - opportunities to follow my creative dreams, opportunities to spend time with my children when they’re young, and opportunities to stop and smell the roses instead of running forever and ever on a treadmill without end.

For me, it was really a simple choice.

No regrets.

What’s your choice?

Both of my children have received a pair of savings bonds as Christmas gifts this year. While the gift is wonderful and very much appreciated, I am considering cashing them in and putting that money straight into their college 529 account. Let’s look at the pros and cons of the choices.

Why I Should Cash Them In

The cash value will almost assuredly be greater in the long run in a 529. As I discussed before with my own savings bonds, the amount of money one could make in another investment far exceeds the returns one could expect from a savings bond. By cashing the bond in now and moving the cash straight into my child’s 529, the return is likely to be much better than just sitting on the bond.

Since these bonds were given as a gift for the child’s future, it makes sense to maximize the return. Savings bonds are given to children with the intention of providing them with money later that, in theory, they’ll use responsibly. That’s the exact reason why I’m putting money into their 529 - to provide them with money that they’ll use responsibly in the future. Why not consolidate the money where it will get the best return?

Why I Shouldn’t Cash Them In

The gift was not a contribution to their 529. The gift that was given was a savings bond, not a contribution to a 529. A savings bond quite often is bought for different reasons - the money is being invested in the government, not into corporations, for example, and the bond money, when cashed, can be used for any purpose, not just education.

The bond offers a guaranteed rate of return - the 529 does not. Although the odds are good that the 529 would put more money in the child’s pockets in eighteen years than the savings bond would, the bond is the one that guarantees a rate of return. The other investment does not.

Cashing in the bond might be socially questionable. It’s the equivalent of taking a gift that’s just fine and exchanging it because it doesn’t match your tastes. For some, that’s completely appropriate - for others, it’s a questionable social move.

My Plan

In the past, I would have just shrugged my shoulders, stuck the savings bond in our safe, and not worried about it. This “solution” was mostly borne out of a fear of money management and also a fear of how to talk about money with others. Now, my solution would be somewhat different.

First, I would have a conversation with the gift giver about the reasons they gave the bond to the child. Did they want the child to use it for college? For something fun when they were older? Did they really not care that much - they just wanted to give a financially responsible gift? Maybe it was just a way to buy a government bond.

Based on that discussion, I might tell them about the 529 and (possibly) ask about whether they would want the bond to contribute to that. This is usually the best option if the gift was given without a purpose, or with just the purpose of paying for school - if there are other issues at play, I’ll usually just put the bond away. I usually explain how the 529 works, how I’m contributing to it, and answering any questions they might have.

Regardless, I won’t convert the bond and add it to the 529 without approval. Most of the time, honestly, the bond will likely remain as a savings bond. However, in the case of at least one of the bonds, I’m pretty sure I will be redeeming it and depositing it into their 529 account.

What it really comes down to is this: was the gift given to help a child with college? If that answer is yes and you’re able to have a healthy and mature conversation with the gift-giver, it might be worthwhile to see how they feel about it. Otherwise, don’t look a gift horse in the mouth - leave the bond as it is.

Now that life has settled down with two children in our home, my wife and I are starting to look at the decision to have a third child. Our plan always has been to have our children close together in age so that they can be peers to each other (roughly) during their school years, but we never quite hammered out how many we wanted to have, figuring we could cross that bridge when we got there, much as we did with the decision to have our second child.

We’ve arrived at that bridge.

Having enough love to spread around to more children isn’t really a problem. Our evenings (especially before 8 PM) and most of our weekends are completely centered around our children at this point, and the more, the merrier. Adding another child wouldn’t change our day to day lifestyle much at all.

Our biggest concern is the financial aspect. Adding another child would change our financial situation significantly, much more than the leap from one child to two children did. Here’s why.

Child care costs would come very close to matching my wife’s salary. Adding a third child to our daycare bill in one year would bring the weekly total to around $400. This adds up to an annual bill in the range of $21,000, which begins to approach my wife’s after-tax salary.

Our solution to this would be for one of us to become a stay at home parent. I think this is the inevitable solution if we choose to have a third child - one of us would have to drop out of the normal workday lifestyle for about five years to raise our children until they are old enough to all be in school.

We’re also looking at adoption. We are beginning to seriously look at adoption. There are many, many children out there who were dealt a poor nurturing hand right off the bat.

On the other hand, this raises a big question about financial support for these children. Can we afford to feed five mouths, provide them with ample educational and growth opportunities, keep our house, and maintain some modicum of a good life with just one salary? That’s a big question - in fact, it’s the biggest question, really.

Right now, it’s that final question - and the uncomfortable answers to it - that keep us from wanting a third child. We’re not concerned with showing the child love and care, but we are concerned that our two children now might lose opportunities due to taking on the additional commitments. In the end, our desire to have more children is outweighed by concern for our ability to provide opportunities for the children we have now.

I also think it’s sad when genuinely loving parents who want to have another child at home have to consider not doing so because of financial concerns like this. However, every solution to this problem that I can conceive of ends up encouraging people to have more children, particularly people who can’t properly care for them, and that’s overall a detriment to society.

Until recently, I viewed the choice of being a stay at home parent solely as a loss of income in a couple’s life. If both adults are working and one chooses not to pursue professional employment, then the incime at that house is going to go down.

Over time, though, I began to realize that being a stay at home parent has a lot of significant value on its own. Not only does it produce inherent savings through the lifestyle change, but a committed stay at home parent can significantly alter the household budget in a profound number of ways - some obvious, some not.

If you’re considering making the stay at home parenting move but are afraid of a financial apocalypse from making that move, consider the following.

You’ll save on child care costs. If you’re considering the stay at home parent route, this is usually the first financial benefit you think of. In our case, one of us becoming a stay at home parent would save almost $300 a week.

You’ll save on taxes. When one of you leaves the workforce, your tax bill will go way down, perhaps even more than you think, because that lost salary was effectively paying taxes in your highest bracket. Let’s say you were making $30,000 a year and that $30,000 pushed you into the 28% bracket by about $20,000. That means your total tax bill from just that one salary was $8,100, or $156 a week.

You’ll save on food expenses. At work, I often go out to eat with my office mates. Let’s say, hypothetically, that I do this three times a week and it costs $10 a pop. With that expense gone, $25 a week would be saved just by eliminating the cost of eating out for lunch.

You’ll save on automobile expenses. My commute eats roughly a gallon and a half of gasoline each day and triggers an oil change every three months. That adds up to a cost of about $4.80 each day just for these items - toss on another $0.20 a day for other auto maintenance items like tires, belts, filters, etc. and you’ve got a $25 a week savings just due to the automobile - and I’m not even including breakdowns, major repairs, tolls, or other emergencies.

You’ll save on extra work expenses. My job has a lot of small, hidden expenses. We all are expected to contribute to a coffee fund. We all are expected to participate in gift exchanges. We all are expected to contribute to donation drives. We all are (basically) expected to buy tchotchkes from the children of most immediate coworkers. These expenses are real and they build up over time, averaging as much as $15 a week over the year.

You’ll save on routine work habits. My wife routinely stops for coffee in the morning and also gets a scone most mornings. This averages out to $25 a week more than just making a pot at home and having a simple breakfast there.

You’ll save on stress relief. I personally find ways to cope with stress by meditation, but I am the only person in my office who doesn’t either get expensive massages or engage in a very expensive stress-reducing activity. One could argue that playing with my Wii is a stress reducing activity. I will be conservative and value this at just $10 a week, though it could be much higher.

You’ll save by discovering new avenues of frugality. If one of us became a stay at home parent, lots of other avenues of frugality would open up. For example, my wife has often talked about wanting to take our kids to story time at the library, getting her in the door there on a routine basis and thus encouraging her to check out books - that’s something I’d probably do, too, as a stay at home parent. I could easily believe that $10 a week would be trimmed from our budget just from frugal discoveries.

The truth is that quite often, we use the excuse of things being “too expensive” without really thinking too much about it to argue against stay at home parenting, but when you really start adding up the factors, there’s much more value there than you think. In the above example, the stay at home parent is effectively saving the household $560 a week. That’s the equivalent of a $29,000 a year job, not much less than my wife’s current salary, and I feel the numbers used in the calculation are conservative.

Is this a financial argument for one of us to become a stay at home parent? When I first started writing this, I did it merely as a mental exercise, but when I showed this argument to my wife, she was actually stunned. Her response was to try to poke holes in it, but she actually wound up convincing herself that my numbers were low.

If stay at home parenting is something you’re considering, but you’re worried about the financial impact, give this article a careful reading alongside your spouse. You just might come to a different conclusion than you expected.