Kids are amazing, but they’re also very expensive. Even if you think you planned for the arrival of your new bundle of joy carefully, there’s a good chance that you’re going to end up with extra expenses to worry about that you never considered before.
The best thing you can do to make sure that you’re ready to deal with the various costs of young children is to build a budget. Before kids, you might not have worried too much about budgeting and preparing for every cost. However, now you’ve got more responsibilities to handle, from doctor visits to baby gear, and endless diaper costs. To make sure that you can handle the various challenges of having kids, here are some useful financial tips.
1. Get your Budget Right
First, you need to be willing to commit to a budget that you can really get behind. Don’t just tell yourself that you’re going to watch your expenses or try and save up some extra money. Instead, track every penny you spend, and every penny that comes into your bank account from your job and other earnings. Look at how much money you’re likely to earn in the next month and design a plan for how much you’re going to allow yourself to spend.
For some people, it helps to stick to a specific budgeting philosophy. For instance, you could consider using the 50/30/20 budgeting plan. This is when you put 50% of the money that you earn towards essential bills and expenses, 30% towards your “wants” and 20% towards savings. While this option won’t work for everyone, it’s a great starting point.
2. Work out your Lending Strategy
If you’re going to need to dip into some extra money elsewhere to afford important expenses in the coming months, then you need a lending strategy as well as a spending strategy. For instance, generally, it’s not a good idea to rack up a huge bill on your credit card if you can avoid it. Instead, it might be helpful to think about how much money you need to spend and think about taking out a short term loan instead.
This way, you’ll usually be able to benefit from lower interest rates and fewer fees to handle in the long-term. Additionally, whenever you borrow money, remember that you’ll need to update your budget to add in that extra monthly repayment.
3. Eat at Home and Plan your Meals
One of the biggest things that people spend money on each month is food. The good news if your children are younger, is that you’re probably not going to have them asking you for meals at restaurants very often. You might not have a lot of time in your schedule to eat out regularly. However, you could be eating out more than you need to with café lunches and fast-food on an evening.
When you’re exhausted by having a career and children to look after, it often feels like a good idea to order in as much as you can. However, you’ll save a lot more money if you plan your meals in advance, make sure that they’re easy to prepare, and avoid eating outside of the home.
4. Banish One Unnecessary Expense
When you have children, your priorities will change pretty quickly. The things that you used to think were essential won’t seem nearly as important anymore. For instance, it might be easier to choose between saving for a baby’s college fund than paying a monthly fee for a gym that you never go to.
Go through your bank statements and think about what you can get rid of that you’re not going to miss. You don’t have to give up everything, but there should be at least one unnecessary expense that you can banish. According to one recent survey, 84% of people aren’t sure how much they’re spending on monthly subscriptions. Check that you’re not paying for anything you’ve forgotten about.
5. Constantly Adapt
Ultimately, as your children grow and your lifestyle changes, your budget will gradually become outdated and less helpful. This means that you’ll need to keep going back to your spending plan and figuring out what you can do to improve your situation.
Once every few months, arrange a night where you can sit down with your partner and figure out whether your plans are still working. Ask yourself if there’s anywhere you might be able to save or make some extra money to make your life a bit easier. Don’t forget to celebrate your little wins too. Be proud of yourself for every dollar you save.