Parents and expenses

Make your money go further with these strategies

When inflation rises, child care expenses do too. To help your money go further in 2023, you may want to reevaluate some of your recurring child-related expenses. Here are a few strategies for reducing costs.

1 Child care Many of the increased tax credits and deductions parents enjoyed during the height of the pandemic are reverting to their original limits. Parents should be prepared to get less back this year, says Alton Bell II, principal accountant and founder at Bell Tax Accountants & Advisors in Chicago.

“I would prepare for a tax refund reduction shock because the credit around the dependent care has significantly changed,” he says.

You can also contribute to a dependent care flexible savings account, which allows you to use pre-tax dollars to pay for child care. Bell suggests maxing out that account for the year and also utilizing an employer FSA match if your company offers one.

2 Groceries If your cupboard is empty within three to five business days because your kids have bottomless bellies, then you may be looking for ways to reduce your grocery bill. This may especially be the case if you’re feeling the effects of higher food costs due to inflation.

One cost-saving strategy is to plan your shopping ahead of time to avoid buying items you don’t need. Dominique Broadway, a personal finance expert and founder of Finances Demystified in Miami, Florida, switched from going to the store to using grocery delivery services so she knows exactly how much she’ll spend.

Broadway also recommends putting the same groceries in different delivery service provider carts so you can do a side-by-side comparison of the price difference.

3 Health care Premiums can become a noticeable expense when you pay them monthly. Adding copays every time you visit the doctor increases your out-of-pocket costs even more. If you have a relatively healthy child and can say the same for yourself, think about whether a health savings account could save you money. HSAs can be used to pay health care expenses. The limit for HSAs in 2023 is $3,850 for individuals and $7,750 for families. The contributions are made with pre-tax dollars and are also tax-deductible. You must have a high-deductible health insurance plan to contribute to an HSA.