Starting your own family is a significant milestone in life and is something that most people look forward to. However, it is not an easy step and it often requires a great deal of planning and preparation – in terms of finances in particular. Thus it is crucial to figure out whether you are ready for this new beginning and if not, that you take steps to ensure that you are. If you’ve been thinking about starting your own family and you’ve been wondering what you need to do in order to prepare – read on to find out what you need to keep in mind.
What Should You Consider Before Starting a Family?
If you’ve been questioning yourself as to whether you are truly ready, do not worry. Take a look at where you are in your life and in your career – do you feel confident that starting your family will complement your other goals in life and what you aspire to be? Is your relationship with your partner strong enough to support a family and are you able to provide the level of commitment and responsibility that is required? And most importantly – are you financially equipped to cater to the expenses of your family? These are a few things that you may want to ask yourself.
Keep in mind that raising a child and supporting a family is expensive. Supporting multiple people financially incurs much more expenses than merely providing for yourself – which can be a bit of a surprise at first. From household expenses to utility bills to transport expenses to food expenses – you should expect your expenditure to increase significantly. Take a good look at your finances and see if you can figure out how you can manage.
However, keep in mind that no one is ever truly ready and if you are sure that this is something that you’ve always wanted to do – it might be best to simply take a leap of faith and throw yourself into the unknown.
Financial Tips When Starting a Family
Once you’ve decided that you are ready to start your own family, you need to know what you need to do! We’ve compiled a list of tips and reminders to keep in mind when looking into money management for your family,
Reevaluate your savings plan:
Once you start a family, it is likely that most aspects of your life will change. As such, your savings plan that had previously worked for you might not work in terms of saving for your family – as the situation is vastly different. Reanalyse how much you are putting into your savings, take new expenses into consideration and figure out whether your current income levels are sufficient to meet expected expenses.
Prepare for future expenses:
If you find yourself met with a number of unexpected expenses, don’t worry – this is normal. However, it is wise to plan for future expenses as much as possible, in order to stay on track of your savings plan. Your main family expenses will include housing or rent, food, childcare and other necessities but it is also important that you take future expenses such as your child’s education and healthcare expenses into consideration too.
Have emergency savings:
As a parent, you bear much more responsibility than you did before. It is crucial to be prepared for unexpected events that your family might face – which is why you need to be more vigilant than ever before about maintaining an emergency savings account, for the sake of your family.
Consider an additional source of income:
When planning your family’s finances, if you feel that you are struggling with regard to meeting your expenses, you should think about the possibility of acquiring more income. Whether it’s you or your partner – think about how you can use any free time that you have to earn more cash; such as by setting up a side business or by doing a bit of freelance work.
Stick to essential expenses:
Since your lifestyle will be greatly different once you’ve started your family, it is best to be prepared to give up some of your non-essential expenses. Be it lavish shopping sprees or splurging on luxury items, you should think twice about whether such expenses are actually required and whether you should spend it on essential expenses instead.
Save on utilities at home:
Remember that your utility expenses will soar when they cover your entire family. Be extremely mindful about ways in which you can save on utilities at home – your electricity bills, your water bills as well as telephone bills. Encourage your whole family to save – this will not only lower your expenses by quite a bit, it also promotes good eco-friendly habits that your children can cultivate in their lives.
Prioritise paying existing debt:
Being debt-free provides you true financial freedom, which is something that everyone strives to achieve. In order to prevent debt from holding your family down – try to pay them off as soon as possible. From credit card bills to loan repayment, prioritise these payments to free up more money for savings and also to avoid any late penalty fees that are applicable.
Find the right life insurance:
Investing in insurance is also a good idea. Though it’s not always pleasant to think about, a part of being responsible for your family is deciding how you want to go about life insurance. First determine your life insurance goals, select a trusted and reputed insurance provider, calculate the optimal insurance cover that works for you, figure out how much you need to pay as a premium and select the correct policy terms. Make sure you go through your policy very carefully before agreeing and that it covers everything that you need it to.
Consider your will:
Another not-so-pleasant aspect of planning for your family includes writing your will. Not only does it communicate exactly how you want to divide your property and belongings amongst your family and loved ones, it also saves time, money and stress for your loved ones in the long run.
Encourage kids to save:
Remember that saving should not be your responsibility alone – everyone in your family can save! Help your kids understand the value of saving and help them cultivate good savings habits – which will not only help your family’s financial plan, but will also help your children grow up to become financially responsible adults in the future.
Communicate with friends and family:
By keeping in constant contact with friends and family, you are able to communicate how you are managing financially and talk about aspects of your life that need improvement. This lets them know exactly how they can help out if they want to – which leads to a reduction of unwanted gifts and items that you don’t really need. Instead, they will be able to help you out in areas of your life that actually help you – be it in terms of transport or childcare or even food.
Keep toys to a minimum:
Initially, you might be tempted to splurge on everything you can buy for your kids as you want the best for them. However toys are costly and it is important that you are mindful of how much you spend on them. At least have a budget for toys if you must and try your best to stay within it.
Take advantage of offers:
Make sure to keep an eye out for offers, discounts and coupons – which could really help you cut down your expenses. Whether you’re shopping for daily groceries or clothing items, make a note of any sales or discounts that you see and take advantage of them.
Plan budget-friendly family outings:
Quality time spent together is extremely important for every family. But how you decide to spend your time is entirely up to you. Remember that you don’t necessarily need to spend a lot of money in order to spend quality time with each other and some of the best memories are created over simple moments. So the next time you think about planning an expensive family vacation, think about how you could do something simpler instead – like a family picnic or an evening out in the park.