Food
Cost through age 17: $29,250 to $44,790This accounts for 12% to 18% of the overall expense (families at lower incomes spend a higher percentage on food).
What you can do
Set strict limits on the more discretionary forms of food spending. For example, tell your children they can spend no more than $7 a week on fast food. That alone may save a couple hundred of dollars a year.
Use the Web to shop for bargains.
There are -- literally -- thousands of shopping-related Web sites, and many of them now allow you to compare costs among similar items. Here's a simple trick that really works: When you're searching for a specific item, go to one of the search engines and type in that item and the word "discount." You'll be amazed at what you'll find. Or, you can go to extremes like the "Web's best shoppers" do.
Consider joining a warehouse club such as Costco, BJ's or Sam's Club. They're not suited to everyday shopping, but they let you stock up on certain items in quantity, often at substantial savings. Look to these places for items such as soda, canned and dried goods, and other sorts of nonperishables. If you lack adequate storage space, divide your bulk goodies among neighbors and friends.
Wholesale food services, which sell meat, noodles, fish and other groceries in bulk, will deliver to your door. Not only can you plan meals well in advance, but shoppers also can save close to 50% off conventional grocery store prices, although you still have to go to the store to buy fruits, vegetables and other items.
For other tips on supermarket savings, see "Take a big bite out of grocery bills."
Tax tips
If you're self-employed, you can deduct 50% of your meals and entertainment, if business-related. If your children refer clients or customers to you, you can deduct the cost of taking them to a restaurant if business is discussed.
If self-employed, you also can deduct the cost of food for a business party. Make a separate shopping trip and keep records of your business guests and the business discussed.
If your children are old enough to work for you and are required to be on the business premises and available for work during lunch, then the cost of that lunch (if available to all employees) is deductible to you and tax-free to your children! Again, proper record-keeping is paramount here, as is the rule of reason.
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Transportation
Cost through age 17: $22,710 to $45,570Transportation can eat 12% to 14% of the total. This includes the purchase and finance charges of vehicles, repair and fuel expenses and insurance.
What you can do
Avoid buying a new car. Estimates hold that the value of a new car drops by as much as 40% in the first two years of ownership. Instead, look into a used car such as a relatively new model that's coming off of a one- or two-year lease. It's likely to be in good shape, may have some of its original warranty in place and, best of all, should be available at a huge discount off its original price. (See "Car buying the smart way" and "8 smart moves for car shoppers.")
After you've found the car, don't forget to shop for the best insurance rates. The cost of auto insurance can vary by several hundred dollars for the exact same level of coverage. Use our auto insurance planner to find the best deal. (See "Your 5-minute guide to car insurance.")
Tax tips
If your children work for you and use your car for business purposes, then the business percentage (business miles over total miles) of your gas, insurance, repairs, interest, maintenance, registration, depreciation, tolls and parking are all deductible. Alternatively, you can deduct your business miles at 55 cents for 2009, plus tolls, parking and interest expense for your car.
Put your children's cars in your name. It reduces the insurance you have to pay (multiple-vehicle discount) and allows you to deduct any business expenses incurred on your return. The downside is that you may be liable for any accidents. That's why you have auto insurance . . . which is deductible to the extent the car is used in business.
Clothing
Cost through age 17: $10,860 to $18,540Clothing accounts for 5% to 7% of the total costs.
What to do
New parents quickly discover the cottage industry of saving and sharing newborn and toddler clothes, so take full advantage to skirt the outlandish expense of buying clothes for your little one(s). Also, seek out some of the thousands of manufacturer outlets across the country where you can buy perfectly good clothes as low as half their original price.
The Internet also offers outlet-shopping opportunities -- at Bluefly, for example, shoppers can choose from dozens of designer labels at discounts as large as 75%.
Buy neutral-colored clothing that can be shared easily among siblings, regardless of gender. Shop sales, and shop at the end of season, so you're not paying a premium for your children's clothes. Finally, as your children get older and start generating some sort of income -- baby-sitting, shoveling snow, perhaps a part-time job -- make it clear to them that, should they want a designer-label piece of clothing, they'll have to cough up at least part of the cost, if not all of it.
MSN Money columnist Liz Pulliam Weston shares her tips on saving on gear for a new baby.
Tax tips
Clothing is not deductible. However, advertising is deductible if you are self-employed. If you are an employee, remember that you can be self-employed with a second job. Schnepper had shirts made for his children to promote his book, with "Ask My Dad How to Pay Zero Taxes" printed on the front. That's tax-deductible advertising. Think Century 21 agents and their gold jackets.
Video on MSN Money
Teens need jobs, tooImagine trying to find a job in this economy. Now imagine doing it with zero experience, little education and no résumé. It's tough out there for teens.
Health care
Cost through age 17: $12,810 to $19,860
Health care represents 5% to 8% of the total costs, but those numbers are misleading. For some families, it's a nonissue; for others, the numbers can be mind-boggling.
What to do
Because much of this expense comes from health insurance premiums, it pays to shop around if you have the option of choosing your insurance carrier. Monthly premiums can vary a lot. Sites such as eHealthInsurance.com also offer information on health maintenance organizations and preferred provider organizations.
From there, you can trim your health care expenses by going with the largest deductible you can handle. Also, check to see if your premiums are lower if you pay semiannually or annually instead of more frequently. If the cost of prescription drugs seems off the chart, check to see if Internet-based drugstores can supply you for less -- two are Drugstore.com and Rx.com. If you can't afford health insurance, you can find free care.
If you work for a large company, make certain you use your employer's cafeteria plan if one is available. This lets you set aside pretax dollars for expenses such as deductibles, copayments and noncovered items such as dentistry and eyeglasses. It doesn't reduce the cost of health care directly, but it shaves money off the taxes you pay on money that does go toward medical bills.
Tax tips
Medical expenses are deductible to the extent that they exceed 7.5% of your adjusted gross income. Such expenses include not only doctors and hospitals, but also dentists, prescription drugs, medical insurance and any necessary medical equipment.
If you are self-employed, 100% of your health insurance costs can be deducted, without any reduction, even if you don't itemize.
Anything you pay for the diagnosis, cure, relief, treatment or prevention of any disease is deductible.
Continued: Child care and education
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