Easy Tips for Creating a Family-Friendly Budget
When you decide to start a family, the first thing you need to think about is your finances. In addition to your regular expenses, you also need to factor in the cost of your bundle of joy. Diapers, formula and clothing add up quickly so if you don’t have a lot of savings, you might find yourself in the red. That’s why proper planning is so important. Unless your pregnancy is unexpected, you need to reworking your finances before your baby is born. In this post from a contributor, we’ll go over some of the best ways to create a family-friendly budget.
Identify Your Goals
Just like any other type financial planning strategy, you to plan for all of the knowns and more importantly, the unknowns. The first step is to determine where your money is going. If you’re trying to pay off your debt but not really making any progress, you should look into refinancing. If you’re not sure where to start, look to refinancing student loans. Since most student loans come with hefty interest rates, refinancing can help lower the interest and possibly even help your loan off faster. The money you save can then be put towards other expenses, or put in a savings account for your family.
Costs to Consider
Once you create your goals, you need to research money saving tips and think about specific costs. In addition to the cost of living, including mortgage, food and transportation, you also need to factor in healthcare. Even if you have insurance coverage, it might not cover all of the wellness visits or emergency visits that come up. As such, it’s a good idea to research other policies and also start an emergency healthcare fund. Since the average urgent care visit can costs hundreds, having that stashed away is important.
Life Insurance
In addition to changing or upgrading your health insurance, you should purchase or upgrade your life insurance. Now that you have a family, you want to make sure that they’ll be taken care of if something happens to you. You can choose between full or term policies, both of which come with their own unique benefit. It’s important to note that full life insurance plans allow you to cash in after a certain amount of time.
Child Care
Once you decide to go back to work, you’ll need to factor in the cost of daycare or babysitters. Depending on where you live and whether you plan on working full-time or part-time, the costs of child care will vary. In some places, it can cost thousands a month whereas an in-home babysitter will cost less. In either case, make sure you claim it on your taxes.
College Funds
You also need to consider setting up a college fund. In fact, some start saving as soon as they find out their expecting. There are a lot of saving options you can to choose, so it’s best to research which will yield the highest ROI. If you plan on opening a regular savings account, don’t worry if you can’t put away large sums at first. Even $50 a month is a good starting point. Since you have 18 years to save, don’t worry if you come up short sometimes.