When you become a parent, you gain exciting new responsibilities. Your children rely on you for everything from food to shelter. Managing your family’s finances ensures that you are able to meet your little ones’ needs. While many parents worry about money, this doesn’t necessarily have to be a stressful topic. Follow the below spending tips and you will be able to confidently gain control of your family’s financial matters.
Track your family spending
The first step to making sure you aren’t living beyond your means is to determine just what your limits are, financially speaking. The key is to create a budget, which allows you to track exactly where your money is going. You can use this information to identify areas where you can make cuts in spending. To create a family budget, first determine your monthly expenses. This includes everything from rent to children’s extracurricular activities (like summer camp or sports equipment). Next, compare this to the familial income—what’s coming in every month? Allot a set amount of money for your expenses each month and stick to those limits. Use a spending tracking app to make sure you stay on target.
Start saving for big goals, like a home
A home is a goal shared by many families. If you currently rent a two-bedroom house but are expecting another baby, for example, you may want to upgrade to a three-bedroom—and would prefer buying over renting. It’s never too soon to start saving for these goals. Figure out how much you need to set aside by calculating your potential down payment. This is the lump sum you pay up front—a percentage of a property’s sale price—in order to secure a mortgage to cover the remaining cost. While it is possible to get a home loan with a minimal down payment, it’s in your interests to make a down payment of at least 20% when you make the offer. The more you pay up front, the more favorable your interest rate will be and the lower your monthly payments will be. A large enough down payment also negates the added expense of private mortgage insurance.
Start investing for your child’s future now
When it comes to specific money worries, one of U.S. parents’ biggest concerns is funding their child’s education. College tuition is costly and, if possible, you want to shield your child from taking on exorbitant student debt. By investing now, you can prepare for this future expense. In addition to saving money, you can also set up a 529 plan. This is a flexible, tax-advantaged plan created solely for the purpose of education savings. Withdrawals can be made to pay for college and certain apprenticeship programs, as well as repayments of up to $10,000 in qualified student loans. It also allows friends and family to contribute. You can also look into low-risk investments such as index funds to bolster college savings.
Rely on internet coupon sites to get deals on family needs
If you don’t currently use coupons, becoming a parent is the perfect time to start. Online sites like SmartSource allow you to save on everything from diapers and baby formula to groceries, gas, and more. If you have a home printer, you can simply print coupons out at home and take them to your local eligible store to redeem. There is also the option to sign up to a mailing list so you have all the latest deals delivered directly to your mailbox—further eliminating hassle as you won’t even have to search for deals.
Let these tips guide your money management as a parent. Getting a handle on your money now will spare you worries down the line. What’s more, knowing that your family is financially secure will allow you to enjoy your time with your loved ones even more.
Photo Credit: Pexels.com
Written by: Sara Bailey
Through thewidow.net, Sara Bailey shares her unexpected and ongoing journey of losing her husband and learning to be the best parent (and person) she can be while nurturing her grief.