Planning, expecting and raising a family is a huge change in any household. When we first found out we were having a baby, we felt an overwhelming number of emotions – Joy, excitement, and of course fear!
We had no idea what we were in for, and as a young couple still establishing themselves financially, we were anxious about money and how we were going to afford everything.
In hindsight, it was actually a really good things because it forced us to start looking at our finances and begin to think about the future. Putting in place things that would help us live a happy and comfortable life, even when our income was about to take a huge hit!
Here are my six top tips for budgeting for a family that have really helped us protect ourselves for the future and our children’s futures!
Review your debt
We are pretty fortunate that even before kids, we had little to no debt other than our home loan. I once had a car loan when I was 18, which lasted for three months before I sold the car and paid back the loan, I decided it was smarter to save my money and bought a car outright instead! Smart decisions like this will get you ahead, quicker.
But my best advice for anyone planning and starting a family is really take a look at the debt you already have! Keep a close eye on fees and interest rates and perhaps have a shop around for a better deal. Don’t borrow to buy things you don’t really need, and consolidate debts to make them more manageable.
Start by having a chat to your bank, see if they can offer a lower rate or alternative to your current situation. As well as how you can manage that debt better!
Create a safety net
When I first became pregnant, I was still working full time, so we began putting a large portion of my wage into our home loan, and living off my husbands income. This created a safety net and helped us get ahead on our home loan, whilst also preparing us for when we would be on one income.
Decide the difference between “need” and “want”
While I must admit that the first time around I definitely bought items that in hindsight did not need, I certainly was a lot more realistic the second time around.
I only bought things I knew we absolutely needed that were practical and put any extra money we had into a savings account rather than squander it on cute but unnecessary baby items.
Weekly meal planning and budgeting
A huge part of preparing for a baby was looking at where we could save money. Before we used to just shop when we needed to, go grocery shopping without a list and have no set budget for our weekly shops!
We now spend almost half on our weekly shop for a family of four, than we did as a couple. We use the extra money to contribute additional weekly dollars to our home loan.
Prepare for the future, now!
We have always encouraged family and friends who wanted to give gifts at Christmas and/or birthdays to contribute a little bit of money to the girl’s savings accounts rather than on clothing and toys.
With it already being so hard for the average person to break into the housing market, we are so mindful of what it will be like when our girls are older. Starting a savings account for them now, contributing little bits here and there where we can means that in a few decades they will hopefully have a bit of money there to use for a house deposit.
It also teaches them the importance of money, savings and budgeting from a young age.
Monitor and evaluate
I think one of the most crucial aspects to budgeting for a family is making sure you keep track of what you are doing. Sometimes we do get off track, or things change and we need to adjust what we are doing and what we are spending!
When I went back to work and we had a second income again, it was easy to begin spending that money, so we started putting that aside within our home loan as we were more than capable of living within our means on one income.
Not to say you shouldn’t enjoy life, we make sure we use that money for bigger goals like holidays and renovations!
If you are looking for somewhere to start when it comes to planning and budgeting for a family, it’s worth checking out the New Parents hub over at CUA. They have created a specific range of products and services to support you no matter what stage you’re up to.
They have got loads of tips and tools to help, like Baby Budgeting & Parental Leave Calculators, Youth eSaver Accounts and even an option to pause your CUA Home Loan Repayments for when two incomes become one.