As inflation has hit Americans’ pockets through 2022 and is expected to persist through much of 2023, parents have begun to find ways to save on what is spent on childcare.
Many saw little financial relief during the upcoming tax season through deductions or credits as a solution. But since there have been recent reductions in both child tax credits, it is possible that parents don’t get as much as expected.
For this reason, to help make money go further in 2023, parents may want to reassess some of your recurring expenses related to children.
Here are four strategies recommended by experts at the personal finance website NerdWallet:
1. Save on childcare
Many of the larger tax credits and deductions that parents enjoyed during the height of the pandemic are going back to their original limits, so parents should be prepared to receive less this year.
With these cuts in mind, parents could save after school childcare and have them at home a few more hours.
Also, it could contribute to a flexible savings account for dependent care, which allows you to use pre-tax dollars to pay for child care.
2. Plan when shopping for groceries
One cost-saving strategy is to plan your purchases in advance to avoid spending on unnecessary items. Dominique Broadway, personal finance expert and founder of Finances Demystified in Miami, Florida, went from going to the store to using grocery delivery services to find out exactly how much she will spend herself.
Broadway also recommends putting the same foods in different carts from delivery service providers so you can make a price difference comparison in parallel.
Experts point out that the difference in this exercise can be up to $50 dollars.
3. A health savings account
If family members are in generally good health, experts recommend opening a savings account for these needs. HSAs can be used to pay for health care expenses.
The limit for HSAs in 2023 is $3,850 for individuals and $7,750 for families. Contributions are made with pre-tax dollars and are also tax deductible.
You need to have a high-deductible health insurance plan to contribute to an HSA. High-deductible health plans sometimes have lower premiums, saving some people money.
4. Reduce expenses on entertainment
To entertain the little ones, families could use free activities and not buy more toys.
Parents often buy children’s items, only to realize that what they really value are the experiences.
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