Families have a million choices to make when deciding where to start their lives. Among the starkest is whether to live in the city or suburbs. Do they want their kids growing up on busy sidewalks or tree-lined cul-de-sacs? In a cozy apartment or a big old house? One of the most important factors in this decision is cost.
Analysts from Care.com and Zillow published a report breaking down the cost factors. The 2017 Cost of Living report looks at cities around the country and compares costs of living in the cities themselves and their surrounding suburbs.
In general, the report found that families in American cities spend an average $9,073 more on housing and childcare than counterparts in the suburbs. A big factor is the cost of childcare, which tends to be cheaper in the suburbs.
Suburban families also get more bang for their buck when it comes to housing, with costs per square foot typically lower than in cities. However, there are some places where living in a city can be cheaper than its corresponding suburb.
Whether you’re moving your family to the suburbs or the city, make sure you know where your finances stand, including your credit, as this will play a role in getting a mortgage. You can see two of your credit scores for free on Credit.com.
Check out our slideshow to see where the suburbs hold the best value over the city, and vice versa.
While I’ve always been pretty financially conscious (you don’t become a personal finance writer by not caring about these kinds of things), it wasn’t really until I had a kid that I started putting some of the financial advice I’ve always heard into practice. Plus, I picked up plenty of new tips.
Here are five of the biggest things I learned about my finances after I had a baby. They don’t only apply to people with kids, though. In fact, I wish I’d taken some of them into consideration a little bit sooner.
1. Sometimes it’s OK to Spend Money to Save Time … or Your Sanity
While I’d never advocate for frivolous spending, I’ve learned that sometimes it’s OK to spend a little bit extra on something that will either help save time or make your life just a little bit easier. In my Mom Life, that has taken on all kinds of forms: From big-ticket items like forking over the cash for a nanny (as a freelancer I could just as easily be stingy and try to fit all my work into nap times, nights when my husband gets home or the weekends, but why make it so hard?) to deciding to finish our basement (a large chunk of cash upfront, yes, but with all the visitors we have coming to see the baby, and all the toys that are steadily taking over the house, this is a sanity saver for sure) to the small — and sometimes silly — but necessary, like investing in travel covers for our stroller and car seat so they don’t get ruined when they’re chucked carelessly under planes.
2. Time Really Does Fly, so Start Saving for Retirement Today
It’s pretty easy to get caught up in the day-to-day minutia when you have a tiny baby that depends on you for her every want and need. But every now and then, when I get five seconds to myself, I’m able to look back through the photos on my phone and see how much my daughter has grown. Can she honestly be six months already? You’re probably saying, “I already know time goes quickly. It’s been [insert amount of time here] since I graduated from college,” but really, there’s nothing that sets up a ticking clock quite like a quickly growing child. My point is, although I have always kept the mantra “the earlier you can start saving for retirement, the better,” tucked somewhere in the back of my mind, I now fully grasp the truth behind it.
For example, my daughter was born in July 2016. Had I invested just $100 on that day into a retirement account, by the time I’m potentially ready to retire in 30+ years, that measly $100 could grow to more than $900. Now imagine I invested more than $100, and did so every single month instead of once? Behold, the power of compound interest.
3. Things Change, so it’s Important to Revisit Budgets & Goals
Having a child would be an obvious change to anyone’s budget, but for me, becoming a parent just reinforced how important it is to not only have a budget and savings goals, but that it’s equally as important to revisit those things on a fairly routine basis. Before I was married, for example, my savings goals consisted of essentially two buckets: Emergency and travel. (Ah, the good ol’ days.) When I got married they became: Emergency, travel, move/house. When we started thinking about kids, a fourth “baby” bucket was added. You get the picture. Since buying a house, we’ve added “home repairs” to that list, too, and believe me when I say we’ve already tapped into that one mightily.
The beginning of the year is a great time to check in on your current budget and savings goals and update as needed, but don’t be afraid to shift things around as often as you need to remain comfortable.
4. Finding What Makes You Most Productive Will Be to Your Advantage
I’ve always considered myself an organized person, but I really kicked it into high gear when my daughter was born, and that’s helped my career as well. As I planned to re-enter the workforce after taking a couple months off when my daughter was born, we didn’t yet have a nanny, but I wasn’t willing to wait to get started. Enter the key to my success: organization. As a working mom without a nanny — and then even when we did find one — I realized quickly that if I was going to get anything (let alone everything) done that I wanted to in a day, I better have a plan. For some people (ahem, me) that might mean making daily to-do lists where items can be crossed off. Others might find reminders set for specific times of day helpful, or setting calendar appointments.
The point is, most of us need a little help keeping on task throughout any given day, whether it’s with personal or professional goals. Learning the things that will get you moving more quickly and efficiently will help you power through your to-do list and streamline your day. Remember: Time is money, so make the most of yours.
5. It’s OK to Use Your Savings for What You’ve Saved For
I’ve always felt more secure when I had savings in the bank, which at times has meant going without things I could have really used, even if they were the exact things I was actually saving for in the first place. Silly, I know, but once I was able to start putting money into savings I loved to watch it grow — and I equally hated to watch it dwindle.
Fast forward a couple years and some of those savings buckets have to be spent — hello mortgage down payments, health insurance deductibles to give birth and any number of house repairs. These days it seems like I don’t have the option of whether to spend money in my savings … for the good of my family, money must be spent. And that’s OK. The whole point of saving up for something in the first place is so that when the time comes to actually purchase the item — whether it’s a house, a vacation or that really extravagant computer bag you’ve had your eye on — you’ve done your due diligence and can buy it outright, rather than go into credit card debt over it (and, if you already have, you can find tips for getting rid of those balances here). Coming to grips with this earlier could have saved me a lot of unwarranted angst.
Of course everyone is different when it comes to money management, but hopefully at least a few of the revelations I’ve had about finances over the past six months might be able to help you out, as well.
Most people never disclose the details of their estate plan to their children, who may also be their successor trustees, executors, and agents. As a result, after they die, the children are left to guess about their deceased family member’s true intentions because of the sterile, legal language used in their parent’s will or living trust.
It’s also true that many children are not even sure that their deceased parent wrote a will, much less know where it is located, and in fact, there are countless stories of children who were unable to find Mom or Dad’s will. Furthermore, even if a parent’s will, or trust document, can be located, there is a good chance that some of its provisions will be out-of-date and that it was based on the status of the family at the time it was written but not necessarily as it is today.
Too often, therefore, after a parent dies, there is a lot misunderstanding and conflict among the deceased’s surviving children because they are left to try to decipher the final wishes of their parent based on long-ago conversations, cryptic notes, family traditions, false assumptions and their own perceptions about what is fair. This can be a recipe for disaster.
To avoid leaving such a legacy to your children, it’s a good idea to have a family meeting, which could be held at your home or at your lawyer’s office. You may want to ask your key advisers to attend the meeting too. The tone of the meeting should be somewhat formal but friendly as well. After all, you aren’t dead yet!
Here are some of the topics I recommend discussing at your family meeting:
The legal documents in your estate plan (Trust, Will, Power of Attorney, Health Care Directive, etc.) and the purpose of each.
Where these documents are stored and how your family can access them quickly after your death or disability.
The responsibilities of the executors, successor trustees, personal representatives, and agents charged with administering your estate and the steps that must be taken to complete the administration process. During this discussion, be sure to assure your family members that they have the right to know what is going on during each stage of this process and explain to those who will serve as your agents that they have a responsibility to keep everyone informed throughout the process.
The purpose and responsibilities of your professional advisers.
If desired, why you made the decisions you did in your estate plan. For instance, why you designated one child as your agent instead of another and why you named your agents in a certain order or instructed them to work as a team.
How your assets, such as a 401K, will be distributed and protected for future generations.
Why certain “difficult” assets may need to be handled in a special way, like your home, family business or one-of-a-kind family heirlooms.
Why you’ve put one child’s inheritance in a trust rather than leaving it to him or her outright in your will, and why your decision to do so is wise and loving rather than arbitrary.
By the way, most parents do not address the size or composition of their estate during a family meeting because they typically like to keep that information confidential, even when they are talking with their children.
You can also use your family meeting to:
Build and strengthen ties within your family and build relationships between your key advisers and your children.
Convey your family values to younger generations.
Answer questions so that everyone feels comfortable with your estate plan and how you arrived at your decisions.
Some parents worry that talking with their children about their estate plan will create conflicts and hurt feelings. But that’s exactly what may happen if you leave behind a plan that your children know nothing about, and as a result it’s possible that one of more of them may try to undermine the plan after your death.
Educating them now can help your children understand the rationale behind your estate planning decisions and that they are purposeful, carefully considered and based on good counsel. Also, if any conflicts or misunderstandings related to your plan do arise, you will have an opportunity to try to resolve them. And finally, you’ll be able to change your plan if you want based on your children’s comments and reactions to it.
Certain types of debt may be hurting your kids, a new study shows.
Researchers at Dartmouth and the University of Wisconsin at Madison found that children whose parents had higher levels of mortgage and student debt fared better emotionally and behaviorally than children whose parents had higher unsecured debt (i.e. credit cards, medical debt, payday loans).
The results show that children may benefit when their parents own a home and/or have higher levels of education (which, more often than not, require a certain amount of financing). Conversely, kids can be negatively impacted when their parents have high levels of unsecured debt, which may create stress or anxiety for parents and may hinder their ability to exhibit good parenting behaviors.
Debt Is a Double-Edged Sword
“It makes intuitive sense that debt that can help you improve your social status in life and make investments — taking on student loans to go to college or taking on a mortgage to buy a home might lead to better outcomes, while taking on debt that is not tied to these investments (such as credit card debt), may be more harmful,” Jason N. Houle, assistant professor of sociology at Dartmouth, who co-authored the study with Lawrence M. Berger, director of the Institute for Research on Poverty and professor and doctoral program chair in the School of Social Work at the University of Wisconsin-Madison, said in a press release. “Overall, our findings support the narrative that debt is a double-edged sword.”
The study followed 9,000 children (ages 5 to 14) and their mothers annually or biennially from 1986 to 2008. The childrens’ socio-emotional well-being was measured using a set of 28 questions to mothers that looked at frequency and severity of child behavior.
The study also measured the total personal debt not incurred from having a business, including: home debt (mortgage or home equity loans); education debt (student loans); auto debt (loans to buy a vehicle); and unsecured debt, such as credit card debt, medical debt, payday loans and other types of debt not tied to an asset.
Unlike other studies that compare families with a lot of debt to families with less debt, Houle and Berger looked at the same families over time, and examined how children’s behavioral problems changed as their parents moved into and out of debt over the course of their childhood.
“What we do in this study is a bit different,” Houle said. “That is, we follow the same families over time and essentially ask: what happens to children in families as their parents take on (or discharge) debt over time. Thus, we’re fundamentally making a ‘within-family’ comparison.”
For instance, in addition to the findings of unsecured versus secured debt, the study found that an increase in a family’s unsecured debt (from $5,000 to the sample average of $10,000) led to an increase in child behavior problems.
Avoiding Debt Can Be Difficult
“I think it is common to assume that those who are struggling with debt are those who have made poor financial decisions or are irresponsible but the research shows that the reality is quite different,” Houle said. “For those who are taking on a lot of credit card debt, or are buried in medical debt, or have payday loans – for many, it’s the only choice they have. In an era where wages have stagnated and costs have risen but credit has become more readily available (due in large part to financial deregulatory policies at the state and federal level over the past three decades), families are going into debt to help make ends meet and keep their head above water.”