Posted: 16 Oct 2014 11:00 AM PDT

Even after the subprime mortgage crisis, homeownership remains a dream for many Americans. If you’re among them, you're probably wondering how you can get the best mortgage rate to keep your payments as low as possible.

Securing the best mortgage isn’t simply about finding a lender who offers you the best rate. You also need to work with a lender who will guide you through the complex process with ease and treats you with respect. This makes finding the best mortgage a little bit tougher than finding, say, the best credit card or savings account.

Mortgage Rate Comparisons

Of course, you’ll need a starting point. The table below gives you a quick snapshot of mortgage rates in your state. You can choose your loan amount, loan type, and whether you're purchasing or refinancing your home to get rolling.

Current Rate Climate

If you've been watching mortgage rates in 2014, you've probably noticed a recent dip. While current numbers don't match the historically low rates of 2012 and the first half of 2013, they're still nothing to sneeze at.

As 2014 draws to a close, the best rates on a conventional 30-year mortgage are hovering just under 4%.

If you're in the market for a mortgage, is it time to act? Experts say yes. Several predict the average rate will gradually climb to 5% by the end of 2015; others foresee a more dramatic rise to 6%. Bottom line? It might be a good time to nab a deal.

Finding the Best Mortgage Rate

If you're ready to get going in your search for the best mortgage rate, here are four tips that will ease your search. If you're unsure of the type of mortgage you'll need, make sure you read my summary of the different kinds of mortgages further down in this post.

Tip #1: Shop around

When you find the home of your dreams, chances are your real-estate agent will direct you to certain preferred lenders that he or she has worked with before. Take that recommendation with a grain of salt. Remember your agent's primary concern might be to close your deal quickly, but securing a mortgage is a complicated process, particularly if you're a first-time buyer. Speed isn't everything.

Whether you want to keep your business with a local lender or are considering working with a big-name company, be sure to look at rates online so you don't get taken for a ride. Our search tool can help you find the best mortgage rates to aid your search.

Tip #2: Polish your credit score

Keeping your credit in top shape is paramount, especially if you're applying for a conventional loan. The higher your score, the better your interest rate and the more loan choices you'll have.

For example, according to the rate calculator at myFICO, I could pay as little as $1,393 a month on a $300,000 home loan in Ohio with a credit score higher than 760. My interest rate would be a hair under 3.8%. With a score of about 680, I'd be paying $1,462 a month at an interest rate of about 4.2%. And with a score of 620, I could be paying as much as $1,678 a month at an interest rate of almost 5.4%. With the lower credit score, I'd be paying $102,778 more in interest over the life of the loan.

Tip #3: Beef up your down payment

It can be painful to save enough for a down payment, but paying more up front can help you nab a better interest rate and save you money as you pay down your loan. It may also save you the cost of mortgage insurance, which many lenders will charge if you have a lower-than-normal down payment.

If I put the recommended 20% down, or $40,000, on a $200,000 home in Tennessee, I'd pay as little as $764 a month in mortgage payments, according to this Bank of America calculator. This assumes a 4% interest rate, solid credit, and a fixed 30-year loan. If I could scrape together $25,000, I'd suddenly be paying $835 a month. And then there's almost $80 a month in mortgage insurance, which I'd have to pay since I couldn't put 20% down. That brings my monthly payments to $915.

Tip #4: Consider how long you'll be in your house

If you know you'll be in your home for a relatively short time before selling, looking at adjustable-rate mortgages can make more sense. That's because you can take advantage of the ARM's low initial interest rates, then sell the home before your rate begins to reset. Of course, this assumes you can and will sell your home within a certain time frame -- and that's an assumption not all home buyers want to make.

If ARMs seem like too much of a risk to you, look seriously at a shorter-term fixed rate mortgage. Your monthly payments will be larger, but you will nab a much lower interest rate. Ultimately, you'll pay much less over the life of the loan with the added bonus of building equity much faster.

Finding a Lender You Can Trust

Taking out a mortgage can be a time-consuming, confusing, and even emotional process. For that reason, we encourage you to look beyond getting the best mortgage rates when choosing your lender. The top mortgage lenders will not only give you a competitive rate, but make the process as seamless as possible. Here are a few tips that can help you find the best mortgage companies.

Tip #1: Do your homework online

Harness the power of the Internet to give you a wider perspective than you can gain from family and friends. You can find reviews of the best (and worst) companies with just a few clicks. As with all online reviews, remember to consider trends. A few very bad (or very good) reviews may be an anomaly, while dozens of good or bad reviews probably get you closer to the truth.

A particularly good place to look is J.D. Power and Associates' annual mortgage lender customer-satisfaction survey. The 2013 survey, based on the experiences of more than 3,000 customers, found Quicken Loans had the most satisfied customers, followed by BB&T and U.S. Bank. Criteria included how satisfied customers were with application and approval; whether the closing process was relatively quick; and whether the lending agent was reliable and easy to understand.

Tip #2: Ask friends and family

Local lenders may not have as many online reviews, so asking around can be crucial. Again, blindly following your real-estate agent's recommendation may not always be your best bet. Conduct a quick survey of your family and friends, especially if they've recently purchased or refinanced a home. Ask whether they felt they understood the lending process, whether their agent was prompt and courteous, and whether they feel they got the best rate they could.

Tip #3: Take note of how you're initially treated

If you call a lender for information and don't receive it quickly, consider that a red flag. Similarly, any lender who is unwilling or unable to clearly answer your questions -- or acts like it's a pain to do so -- will probably be less than pleasant to deal with further down the line. Your mortgage might be the biggest financial transaction of your life, and you should feel comfortable with your lender.

Common Types of Mortgages

Obtaining a mortgage doesn't always mean you'll be coughing up 20% down and forking over the same payment for 30 years. Take a look at today's most common types of mortgage so you understand what's the best for you.

Fixed-rate mortgages

A fixed-rate mortgage is by far the most common type of home loan. It's also the easiest to understand. Though the proportion of principal versus interest on your bill will change over the course of the loan, you still pay the same amount every month. Your interest rate is locked in when you close on the loan, so you aren't vulnerable to sudden increases in interest rates.

Of course, while you aren't vulnerable to interest-rate increases, you'll lose out if rates decline -- you'll be stuck paying that higher rate. It can also be harder to qualify for a fixed-rate mortgage if your credit score is less than stellar, particularly if interest rates are high. Down payments are typically high, too, with most lenders requiring 20% of the loan to avoid pricey mortgage insurance.

Fixed-rate mortgages are most often offered for 10-, 15- or 30-year terms, with the latter being the most popular choice. Longer terms generally mean lower payments, but they also mean it will take longer to build equity in your home. You'll also pay more interest over the life of the loan.

Adjustable-rate mortgages (ARMs)

ARMs make home-buying more accessible for more people. Typically, they offer lower down payments, lower initial interest rates, and lower initial payments, making it easier for a wider range of people to qualify for better homes. The interest rate remains constant for a certain period of time -- generally, the shorter the period, the better the rate -- then rises and falls periodically according to a financial index.

The main downside is obvious: If your ARM begins to adjust when interest rates are climbing, your escalating payments could start to squeeze your budget. It can also make annual budgeting tricky, and if you want to refinance with a fixed-rate loan, the cost can be quite steep. Ultimately, with an ARM, you're accepting some of the risk that your mortgage lender would absorb with a fixed-rate loan.

There are several kinds of ARMs. One-year ARMs offer the lowest rates, but they're also the riskiest because your interest rate adjusts every year. At slightly higher rates, hybrid ARMs offer a longer initial fixed-rate period. Common hybrid loans include 5/1 mortgages, which offer a fixed rate for five years and then and an annually adjustable rate for the next 25 years.

FHA and VA loans

FHA and VA loans are government-backed mortgages. FHA loans require much smaller down payments than their conventional counterparts. In fact, you may qualify for an FHA loan with as little as 3.5% down. They may also be available to those with less-than-perfect credit. However, you'll likely be on the hook for mortgage insurance each month in order to help the lender blunt some of the risk.

VA loans are also available with low (or even no) down-payment options, minus the mortgage insurance required on FHA loans. However, the VA typically charges a one-time funding fee that varies according to down payment. You must have a military affiliation to get a loan -- active-duty members, veterans, guard members, reservists, and certain spouses may qualify.

Interest-only mortgages

Technically, interest-only mortgages are a type of ARM. These mortgages are compelling because they allow home buyers to pay only interest for a certain period at the beginning of the loan, keeping payments as low as possible. They can be a good choice for someone who expects a significant increase in income down the pike.

Of course, once the interest-only payment period is up, your payment will jump significantly with this type of loan. That's likely to be the case regardless of the interest rate when you begin to pay the principal of the loan, too.

Balloon mortgages

Balloon mortgages offer low, fixed interest rates for a short term -- typically five to 10 years. In fact, you may only pay the interest on the loan for that term. The catch? The remainder of the loan, likely a very significant sum, is due when the term is up.

Starting Your Search

Remember, you'll need a good understanding of the best type of loan for you as well as prevailing mortgage rates. And be sure to pick a lender with a reputation for good customer service. Ready to begin? Get started by using our online search tool to find the best mortgage rates in your area.

The post How to Find the Best Mortgage Rates in 2014 appeared first on The Simple Dollar.

The Missing Ingredient for Change

Posted: 16 Oct 2014 07:00 AM PDT

I’ve had a lot of successes in changing my life for the better. Over the course of approximately five and a half years, Sarah and I managed to pay off three student loans, three car loans, four nearly-maxed-out credit cards, and a full home mortgage, moving ourselves from financial disaster to complete debt freedom. I essentially built a new career for myself out of whole cloth, too, practically making my own job up along the way. I switched from a meat-heavy diet to a vegetarian diet (with rare fish consumption).

At the same time, I’ve had a ton of failures along the way. I’ve failed at many of my personal fitness goals. I’ve failed repeatedly to write a novel that I felt was publishable. I’ve failed in countless other things, too.

When I look back at my own successes and failures, I can’t help but ask myself what the difference is between the successes and failures. Why did I succeed at some things and fail at other things?

I tried hard to remove outside influences from the list and break it down to just my own personal choices because, after all, that’s what really matters when it comes to personal change. People may help, but in the end, it is you who is responsible for doing the things that need to be done to succeed and it’s you who also chooses to avoid those things… and subsequently fail.

In the end, I realized that every major change in my life boils down to four ingredients. If all four of those things are present, I tend to succeed – at least, I succeed as far as the things I can personally control. If even one of those things fails to be present, the change that I dream of almost always fails.

The tricky part is that you can’t simply create all of these elements. Some of them have to grow and build themselves up over time. Others are habits that have to become completely natural within you.

In the end, whenever you fail at change, one of these four ingredients is missing. It’s a pattern that’s repeated over and over again in my own life and in the lives of people close to me, too.

Motivation

Do you have a sufficiently good reason for this change? Why are you trying to make this change happen? Without this kind of strong internal motivation, I have never succeeded at changing my life. External motivation – a coach or a friend or a spouse – has never pushed me to any sort of lasting change, either.

Usually, the kind of strong motivation that works for me consists of two parts.

First, there’s a long period where I sense that change is needed and I’m thinking about it, but not ready to commit. During my financial change, the idea that change was needed floated in my head for at least a year before I actually began to make that change.

Second, there’s a powerful moment that moves that thought into action. I’ve had various trigger moments in my life and the biggest thing they’ve all had in common is that they launched from some kind of personal failure where I had simultaneously let myself down and let others down. I wrote at length about the powerful moment that triggered my own financial change.

With my career shift to writing, I had always enjoyed writing but had never taken it seriously until 2006, when someone told me that something I had written had profoundly affected their life in a very positive way. That moment made me want to do that again and again and again – it became my motivation and that motivation still rings true through almost everything I write for The Simple Dollar and elsewhere.

When most people struggle with change, they have the first half of motivation – lots of thinking about change – without the second half – a key moment that pushes that change. My suggestion is to try to find that key moment that triggers change. For example, you might schedule a full physical with your doctor and get all of your health numbers checked. Ask your loved ones what you do that lets them down. Look at your financial state and ask where you’ll be in a few years if you don’t change things around. Those kinds of experiences can create key motivational moments.

What about external motivation? Some people thrive on coaching. I find that most of my external motivation comes from having friends who are moving in a similar direction in life as compared to my own direction. Normal conversations with them become a great external motivator for consistent change.

Without real motivation, I find it hard to take more than a step or two toward real change in my life. I find the work that needs to be done to be purposeless compared to the other things I could be doing with that time, so I either never start at all or only take the most feeble steps toward change.

Self-Control

Self-control simply means the ability to control oneself, in particular one’s emotions and desires or the expression of them in one’s behavior, especially in difficult situations. When the going gets tough, can you continue to make good choices?

For me, the key to self-control is mindfulness. Most of my self-control mistakes occur when I’m not being mindful at all. I do a lot of things to cultivate my ability to focus in the moment – meditation helps, as does periods of daily reflection on my decisions and mistakes of the day.

A while back, I wrote an article outlining ten strategies you can use to cultivate mindfulness. Here they are, in summary:

1. Face the fact that you mess up sometimes. We’re all human. We all mess up.

2. Think about specific situations outside of their normal context. Replay challenging situations in your head later on in the day when you’re in different company and in a different location and the emotions aren’t fresh.

3. Keep a journal. Use it to record things you’re grateful for. You can also use it to aid in reflecting on life situations that you’re unsure about.

4. When you’re unsure about something, research it. Very few things in life need to be addressed right now. Take the time to research them.

5. Put yourself in the other person's shoes. Ask yourself how you would like to be treated. Consider how that person is feeling and how their problems might be altering their behavior.

6. Don't put yourself in decision-making situations when you're not thinking well. If you’re emotionally out of whack, exceptionally tired, or simply not feeling well, don’t allow yourself to make decisions of even the slightest importance.

7. Get adequate sleep. If you’re consistently feeling tired during the day, you need more consistent sleep. Try going to sleep earlier or consulting a doctor if you can’t get adequate sleep.

8. Understand what you really value. Often, people aren’t motivated by the things that they think they’re supposed to care about. Think about the things you really do care about and use them in your life.

9. Let yourself wander when it's safe. No one can be mindful all the time. Let your guard down in situations where you’re not actively making decisions so that you can be more mindful in other situations.

10. Never forget that the perfect is the enemy of the good. You will make mistakes. That’s okay. The goal is to do better than before, not to be perfect.

I also find it incredibly useful to define two or three key missions for the day. I do this at the start of the day and then refer to them regularly throughout the day. When I’m trying to cultivate change in my life, I make sure that one of those key missions is related to making that change happen. Doing this keeps those missions fresh in my mind throughout the day and this pierces through instances where my self-control might be weak.

Another useful method of reinforcing self control is to eliminate temptation and distraction. If you’re trying to control unnecessary spending, cut up your credit cards and delete your credit card number from websites. If you’re trying to control unhealthy eating, keep unhealthy foods out of your home.

Yet another useful strategy is to ask friends and family for help. Ask them to remind you if you’re about to make a bad choice. The big key here is to be thankful when your friends step in and stop you or else they won’t help you after the first time.

This is the area of the four that I’m the strongest at, but I’m not always perfect. I’m usually undone by brief periods of poor self-control, like when I decide to buy something on the spur of the moment or when I choose to eat a quick but unhealthy snack.

Without self-control, I constantly undo my positive steps. If I have the other elements, I can make lots of positive steps. For example, I’ll enthusiastically make and eat a really healthy meal. When self-control fails me, I’ll sneak in an unhealthy snack a few hours later. If self-control isn’t an ingredient, then it’s one step forward and one step back, no matter what the goal.

A Clear Goal

A clear goal is a vital element for creating change in your life. It provides direction. It clues you in to the things that you need to be doing. It gives you something to focus on.

A clear goal contains three key elements, all of which need to be present if you want a useful goal.

One, the goal’s success and failure is entirely in your hands. It does not rely on outside factors or things outside of your control. For example, rather than committing to losing X pounds in a year, you should instead commit to 30 minutes of exercise per day or eating less than 600 calories each day before dinner. Those are things you can control – the exact poundage of your weight loss isn’t. Another example: rather than committing to writing a novel, commit to writing 500 words per day. You can’t control whether or not you actually complete a novel, as you might find your writing path doesn’t pan out. However, if you commit to writing each day, you’ll eventually complete something.

My primary goal when bringing about personal finance change was simply to reduce my spending month over month (excluding true emergencies), starting off with a month where we lived pretty tightly. This pushed me to start keeping better track of every cent, then it pushed me to focus on restricting my spending in key areas. I worked on cutting back my hobby spending first, then my food spending once my hobby spending became much more reasonable.

Two, the goal is challenging but achievable. A good goal pushes you, but it doesn’t push you off of a cliff. For example, an exercise goal might encourage you to exercise today, but it doesn’t tell you to run wind sprints for 30 minutes on your first day of exercise and it also doesn’t tell you that ten jumping jacks is sufficient either.

My primary goal when building my new writing career was to simply write a certain word count every single day. I divided it into a number of short articles, which became the foundation for The Simple Dollar. It was a challenging threshold – at the time, it was 1,500 words a day outside of my normal job – but it was achievable if I committed my time and my energy to writing.

Three, the goal itself immediately describes the action you can take today to move forward. “I want to lose weight” tells you nothing about what you need to do today. “My goal is to exercise for 30 minutes each day” tells you that. “My goal is to eat 600 calories or less before dinner” tells you that.

Those two successful goals both pointed to specific actions that I could achieve in the next month. The first goal said “cut your spending.” The second one said “write something today.” The goals boiled down to those kinds of actions that I could literally take at any time. There wasn’t any doubt about what I actually needed to do.

Every time I’ve had a clear goal that’s clicked in my life, it’s involved all three of these elements. It’s also left me in a position where I have some leeway to plan some sort of action each day, but the goal almost demanded daily action. I had a lot of flexibility in terms of the path, but there was always some basic threshold pushing me forward.

I’ve also found that goals sometimes evolve over time. You might start off with a clear goal, but then find that it’s somehow not right for you. Perhaps it’s introducing a requirement into your life that just isn’t realistic. Maybe it’s not pushing you hard enough. You may find yourself revising your goals, particularly in the first month or two of your change. That’s okay.

Without a clear goal, I’ll get frustrated that I’m not really moving forward or achieving anything and give up out of pure frustration. I need that clear goal to provide not only a sense of direction, but also a sense of accomplishment as I’m moving forward. An unclear goal – one that uses metrics that are outside of my control or one that doesn’t use any metrics at all – is practically as useless as no goal at all.

Persistence

Persistence means the long-term continuation of something. When you’re looking at change in your life, persistence means that you stick with that change over a long period of time.

For me, persistence is what’s needed to bridge the gap between a good short-term change to a lifelong change. It usually happens between the one month and the six month threshold; if I can persist through the six month mark, the change usually becomes automatic for me.

Persistence is deeply connected to the emotional cycle of change that I’ve written about before. In that article, I outlined the five key stages of how we react to change:

Stage 1: Uninformed optimism.
Stage 2: Informed pessimism.
Stage 3: Hopeful realism.
Stage 4: Informed optimism.
Stage 5: Completion.

I find that the other three elements of change – self-control, motivation, and a clear goal – are enough to get through the first stage without any problems. It’s that second stage – informed pessimism – that absolutely requires persistence. Without it, a person simply can’t make it through that period of informed pessimism.

For me, there are several key tools that help with maximizing persistence.

The single most valuable tool – and the one I’d recommend to everyone – is spending time to find the intrinsic joy in whatever change I’m cultivating. I spend time looking specifically for all of the things I actually like about the changes I’m making. Do I feel better on a daily basis? Do I feel good when I’m productive? What types of exercise make me feel joyful rather than exhausted and unhappy? I make an effort to seek out elements that bring me joy and I spend time thinking about those elements, reinforcing the “good” in the change I’m trying to make.

Hand in hand with that, I’ll think about what will happen if I revert from this change. What will my life be like if I throw away this change? In six months, I might be poorer. I might be heavier. I might be in worse shape and less able to keep up with my kids. I will be very unhappy with that outcome.

Another strategy I really like is the Seinfeld “chain.” The idea here is that you choose a specific action that you commit to doing every single day, then you print off a year-long wall calendar. Each day, when you compete that single action, you mark off that date on your calendar with a big black X. As you start marking off consecutive days, you’ll find that a “chain” of Xs starts to grow and, on some level, you’ll really want to avoid breaking that chain. It becomes its own little persistence motivator.

Without persistence, my life changes start faltering after a month or two. I’ll give up on exercise routines or dietary changes at that point because I begin to really see the challenges more clearly than before. I get focused on the negative aspects of the change and without persistence, it becomes so easy to just turn away from that change and go back to old routines.

Final Thoughts

Motivation. Self-control. Persistence. A clear goal.

Those are the key elements to lasting change in one’s life.

They’re like four legs on a stool. If all four legs are present, you can stand upon that stool and reach for new heights. Take away just one of those legs and it quickly becomes nearly impossible to achieve your dreams.

Over and over again, in my own life and in the lives of others, I’ve seen life change happen when all four elements were present. Over and over again, I’ve seen life change fail because one (or more) of those elements were missing.

If you want to change your life, start by working on these four elements. Make sure they’re present in your life. If you find that one of them is weak, focus on what you can do to strengthen that element.

Eventually, you will be able to stand upon the sturdy stool of success, supported by those four pillars of change.

I’ve done it. So can you.

The post The Missing Ingredient for Change appeared first on The Simple Dollar.

How to Curb the Rising Costs of Parenting

Posted: 16 Oct 2014 05:00 AM PDT

Food is a big family expense, but one that can easily be trimmed. Photo: US Army Corps of Engineers Europe

Parenting is the most difficult yet rewarding job I’ve ever had in my life. It definitely hasn’t been easy on my pockets, either. And apparently, I’m not alone in my experiences.

According to a recent report released by the U.S. Department of Agriculture, the average cost to raise a child born in 2013 will be $245,300. That’s the equivalent of a decent home in my area. Here’s a detailed breakdown of the expense categories:

Housing and Transportation: $107,970
Food: $39,060
Clothing and Miscellaneous Expenses: $33,780
Health Care: $20,130
Child Care and Education: $44,400

Obviously, the amount you spend will depend on your area of residence and lifestyle, but there are ways to cut costs across the board.

Housing

Unfortunately, there aren't a ton of ways to slash housing expenses for your children. However, there are two options worth considering:

1. Downsizing or relocating

This is easier said than done, especially if you're locked into a mortgage on a property where the home value has taken a hit. Unless you can unload the home for the equivalent of what you owe, the costs of downsizing will definitely outweigh the benefits.

On the other hand, renters have more flexibility. Moving into a smaller (and cheaper) home or relocating to a less expensive area could save hundreds of dollars per month. But be sure to consider moving costs, your commute to and from work, and the quality of education at the school your child will be attending. You may discover it's worth it to just bite the bullet and find other areas of your budget that could use a little trimming.

2. Shared rooms

If you're running out of room but can’t or don’t want to pay a premium for a bigger home, try having the kids bunk together. You'll erase the costs associated with an extra room and they'll have more bonding time. (However, this could be a painful process if they're older and used to having their own space.) If you have small children, start now. They'll enjoy each other's company at nighttime when all the lights go dim and you're ready to shut down for the day.

A year or so ago, we had to decide whether to relocate or make do with the space we had. Being that we’re both frugal, the latter was definitely the more favorable option. So, I decided to pair up the boys and use the extra room for an office, and it worked out well for our household. The boys look forward to the late-night chats in their room and, most importantly, stay out of my hair in the wee hours of the morning.

Food

This is without a doubt one of the biggest expenses in our home. Here are a few tips I've learned over the years to slash the grocery bill in half:

1. Shop wisely

As a busy mom, I understand that your time is precious and you may not have hours to spare during the week to hunt down coupons and travel from store to store cashing them in. And honestly, I don't either. However, that doesn't mean you have to empty out your wallet on each grocery trip. Instead, pick one or two grocers and stick to them. Once you've narrowed down your options:

Set a budget. This amount should be realistic, but not too excessive. Remember, the goal is to save money.
Grab a copy of their weekly circular. You'll want to spend a few minutes flipping through the pages and circling the items that stand out.
Highlight items you'd like to have that are within your budget.
Create a meal plan from your selections.
If time permits, do a quick Google search or visit The Krazy Coupon Lady or Coupons.com and print out coupons that apply.

Tada! You have a complete grocery list for the week that's within your budget.

Once you arrive at the store, don't give in to the urge to grab additional items that aren't on the list. If you forgot to add something, check the bottom racks first.

2. Shop on Wednesday evening

Most stores begin their weekly sales on Wednesday, so the shelves are full of sale items. You may luck out and convince the cashier to honor the prior week's promotions, too.

3. Try generics

But test the products out first before you go overboard and stock up the pantry or deep freezer. We used to spend a fortune on Froot Loops until we switched over to the generic brand. To my surprise, the children actually enjoyed Fruit Spins much more. The cereal was much crunchier, tasted better, and came in $2.00 cheaper than I was used to paying.

4. Avoid pre-portioned items

If you pack your children's lunch, it's easy to grab a fruit or veggie cup, throw it in the lunch box, and go on about your day. These items come at a premium to help the manufacturer absorb packaging and distribution costs, so buy fresh and do the slicing and dicing on your own. Plus, you'll skip all the unhealthy preservatives.

5. Feed the children before you go

Assuming you take them with you on grocery trips, the last thing you need is their appetites going into overdrive while parading up and down the food aisles. Fail to heed my warning and you’ll end up spending way more than you initially bargained for.

6. Leftovers

Why spend countless hours in the kitchen preparing a scrumptious meal for your family only to end up tossing out what remains? Instead, prepare enough to last your family for the next day's lunch and maybe even dinner. You'll cut costs and save yourself a little time laboring over the stove the following day.

For your children's lunch, try heating up the food and placing it in a thermos immediately before they depart in the morning. If lunch is in the first few hours of the day, the meal will still be warm and fit for consumption.

7. Think outside the 'grocery box'

Have you ever considered purchasing pricier perishables, such as meat, veggies and produce, from an alternative source outside of the nearest grocery store? It's definitely worth a shot. In fact, I'm addicted to local produce stands and meat markets; it's a great feeling to know I'm supporting local farmers and fisherman and saving a ton of money while doing so. Plus, my children love bananas, so at 35 cents per pound — versus the 69 cents I'm accustomed to paying at the grocery store — the visits are definitely worthwhile.

8. Handle your food with care

You should treat your food like your most prized possession. Handle it with care. Refrain from leaving leftovers on the stove or countertop overnight, store perishables in air-tight containers, don't store meats in the fridge for an extended period of time, butter cheese to prevent mold… the list goes on. In other words, use common sense and follow instructions found on the packaging to prevent wasting the food you paid good money for.

9. Follow the golden rules of dining out

So you've decided to treat your family to a nice meal out on the town, but you don't want to spend a fortune. Understood. A few suggestions:

Select water as the main beverage. It's much cheaper and healthier. I have no desire to spend $2.50 for a cup of apple juice for my toddler when I can get an entire bottle for the same price.
Look for kids-eat-free nights. Every Tuesday, the local Texas Roadhouse has free dining for kids and, of course, I'm on the mailing list just in case I need a reminder.

Clothing

Whether it's for a special occasion or recital, children will always need clothing. (And babies will need a little extra underneath it all in the form of diapers). In case you didn't notice during back-to-school shopping, apparel and footwear prices have catapulted through the roof. The days of affordable sneakers and matching short/pant sets at low prices are over. A few tips to cut costs:

1. Save on diapers

I know I spoke against it earlier, but coupons were a lifesaver during the diapering phase. It's not as time-consuming as you may think if it's all your searching for.

Another suggestion: Explore your options. If your child's bottom isn't sensitive, try switching to a more cost-efficient brand, such as Luvs, to give your wallet a break.

2. Don't buy unless it's on clearance

Easier said than done, right? Well, not necessarily. I didn't grow up in a household surrounded by money trees; my parents worked hard for every dollar they earned, and it was not uncommon for my mother to proudly parade in the store and make a beeline for the clearance rack. So, this is second-nature for me. If it's not on clearance, I don’t buy it.

3. Buy off-season

Is it snowing outside? If so, it's a great opportunity to stock up on summer clothing and vice-versa. Don't wait until the demand is high; buy the items no one else wants and your pockets will thank you. And definitely don't wait until the last minute to rack up on weather-appropriate clothing or you'll be among the multitude of other parents who also procrastinated.

4. Thrift shop

If your children are older, they may have a serious problem wearing secondhand clothing. But if they give you a guilt trip, remember that you’re the one coughing up the dough. Be on the lookout for dollar days and irresistible buy-one-get-one-free sales. If you're lucky, you could easily save 50% or more on designer labels.

Health Care

You never know with children; a few sniffles could turn out to be a nasty virus that lingers for days on end and wreaks havoc on your pockets in the form of medical bills. So you definitely don't want to skimp on health care coverage. But the costs sometimes outweigh the benefits. Here are a few ways to soften the blow:

1. Ask questions!

When in doubt, ask questions. And never make assumptions; I did and it resulted in a $400 bill for a 20-minute speech evaluation.

2. Urgent care

I recently spent hundreds of dollars on an ER visit that could have only cost me a $50 copay had I given urgent care a shot. Reasoning: They had all the proper equipment on hand and it would have been a package deal. (I called my insurance provider after the fact to confirm.)

3. Generic prescriptions

I'm no physician, so consult with your primary care provider or pharmacist to see what options may be available to you. I've saved up to 75% buying generic drugs for my children in the past.

4. Dental schools

Struggling with exorbitant dental bills? Give the local dental school a try. You'll receive thorough care from a trained and well-supervised student at a fraction of the cost.

5. Other affordable options

Check with your local health department to inquire about options that may be available to you outside of the plans offered at your place of employment.

Child Care and Education

Depending on your area of residence, it may be best to enroll your child in private care, so I'll let you make the judgment call on that one. But here are a few tips to reduce steep daycare costs:

1. Private care

Going this route saved over $100 per week when my children were infants.

2. Workplace facilities

The price may be comparable to that of standard facilities, but it's much more convenient.

3. Income-based programs

Check with your local child readiness program to learn more.

4. Ask relatives

Is grandma sitting around waiting for something to do? Here's the perfect opportunity to occupy her time in a meaningful way.

5. Stay at home

If the cost of care is equivalent to your income, is it really worth sending your child to daycare? Plus, there are a number of perks to being a stay-at-home parent.

6. Share a nanny

But be sure to iron out the details beforehand. You can also use Care.com to narrow down your options.

7. Use your FSA

The IRS allows you to contribute $2,500 (single) or $5,000 (married filing jointly) of your pretax income to a flexible spending account, which can be used to cover eligible child care expenses. By paying with pretax dollars, you’ll in essence be receiving a sizable discount. But if you don't use the money, you lose it, so plan wisely.

All the other extras

Until there's more wiggle room in your budget, the extras need to be put on hold. I'm not encouraging you to deprive your children of extracurricular activities, educational tools, or the latest gadgets, but make purchases within reason. If two sports leagues have identical registration fees, but one requires substantially less travel than the other, go with the more cost-efficient option.

By implementing a combination of these tips, even parents should experience some relief in their wallets.

The post How to Curb the Rising Costs of Parenting appeared first on The Simple Dollar.