Your 5-minute guide to raising kids

The $225,000 question: What about college?

This is the biggest single expense and the one that worries parents the most. There are a number of ways to save for college, and many have tax advantages. You might not be able to save much at all, but that doesn't mean you can't help.

Start early, whichever option you choose. In 2020, you'll need nearly $225,000 for a private college or $105,000 for an in-state public university. (Run the numbers with our tuition calculator.)

• When your children are in high school, check whether a nearby college will let them take classes to get ahead.
• Have your children attend a community college, where they can earn core credits, gain independence and dabble in subjects. They can transfer to a university for the final two years. (See "College for half-price.")
• Look into scholarships and work programs before taking out a home-equity loan to fund college. (Start your scholarship search here.)
• Start early to help your children appreciate the gift of an education. They'll be more willing to participate in funding it.

What to do about health care

Over the long term, health care can average $50 to $90 per month per child.

If you have more than one option of health plans at work, choose one that will cost the least without throwing you for a loop if a medical emergency crops up.

Playtime doesn't have to be costly

There's no law of averages here; the recreation you arrange for your kids depends on your principles and pocketbook.

• Look for free entertainment and events. Parks and libraries are filled with free activities, and some companies offer free how-to or crafts classes.
• Take advantage of after-school enrichment programs, which are slightly less expensive than offsite programs. In most areas, after-school programs run $30 to $50 a month.
• Make a decision which extracurricular activities your child will be involved in. Scouting runs year-round and has monthly dues, although that can vary by troop. Sports programs run seasonally, and all have costs. Limit your child to only one organized sport at a time.
• Ride bikes and walk to save money and to gain time with your children.
• Limit TV watching to cut down on the "I wants."

Some expenses you can't anticipate

No matter how well you plan, costs will creep up on you, averaging $100 or more a month. (See "The hidden costs of teenagers.")

• Put unexpected money, such as rebates or bonuses, into an emergency account for unanticipated bills, whether they're for an orthodontist or a once-in-a-lifetime trip.
• Share used beds with family and friends because children quickly outgrow them. However, don't cheap out on a child car seat ($60 to $300).
• Involve your children in certain money discussions so that they understand its value. Impress on them the difference between wants and needs by demonstrating it in your own life. (Teach them "9 money rules to live by.")

If you've got a hint we haven't included or find a factual error, let us know by sending an e-mail to Five.minute@hotmail.com.

Updated April 27, 2009

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