Budgeting for parents
Having kids can drastically change your financial situation, so it’s important to revaluate your budget when the time comes.
Whether you’re expanding your family for the first time, or if you’ve already had children, you’ll need to consider your finances.
Do you have the physical space to accommodate children?
Will you be upsizing your property, or moving to a new house?
Will you need to buy new clothes, shoes and other items?
Will you take time off work, or will you opt for childcare?
How much does the childcare cost?
Having a family budget will not only help you answer all these questions, but it will also help you to:
- Spend money wisely, on the things you need
- Save money for a rainy day, such as unexpected maintenance or repairs
- Plan for the things you want, such as new clothes, holidays, dining out, and other non-essential expenses
Where to start
Start by working out your total income. If you’re growing your family, will there be a period with reduced income? Does your employer offer paid parental leave? Are you currently a double- or single-income household? These are important factors to determine before looking into your spending.
When you’ve calculated your income, the next step is to calculate your regular mandatory expenses, such as your mortgage repayments, rent, car repayments, phone bills, and other essentials. Identifying these expenses and planning for how regularly they occur will help you avoid any nasty surprises in the future.
Family expenses
Along with childcare, education and other activities, there are a number of expenses to account for when starting a family. Planning for these costs early enough might mean you have a little more financial freedom later down the track. So, what exactly should you be saving for?
- Medical expenses
- Childcare and school fees
- New clothes and shoes
- Furniture and household items
- Extra food and grocery costs
- Nappies and other sanitary goods
Ways to save
Whilst growing your family might seem daunting and expensive, there are various ways to cut costs.
- Plan ahead
Most families would save a lot of money if they stopped buying unnecessary things. By having a budget, you can plan for what you need so you can ensure your money is going towards your goals and essentials, rather than towards impulsive wants.
- Reuse and recycle
When it comes to new clothes, try to reuse, and recycle where possible. Ask friends and family members for any hand-me-downs or try searching through second-hand sellers via online marketplaces. You might be able to score some unworn, or almost new clothes for a fraction of the price.
- Stop buying takeaways
Takeaway and meal delivery services also count as unnecessary spending, so try planning your meals for the week and make them in bulk, if possible. This way you can have leftovers for lunch or dinner, and you won’t feel the urge to splurge on takeout.
- Cancel unnecessary subscriptions
That gym membership you pay for each month but never use? Cancel it. Paying for every single streaming service? Unnecessary. You can make small changes to make a big difference and streamline your subscriptions.
- Reassess your providers
Now is as good a time as any to take an audit of your providers of insurances, banking, and phone and internet services. Most of the time, when we sign up to a service, we’re only really thinking about what we need at the time. When plans and needs change, your services should change too. You could get a better deal by switching to a better plan, or even by changing providers.
For more information, or for specific guidance relating to your situation, contact your Gilkison Financial Adviser.