Are you a new parent? This means you’ve just started a family and are expecting a baby soon (or already have kids but have just entered into a new family setting). If so, things may be a bit testy for you and you’re probably trying to look for ways on how you can manage your finances better for the benefit of your family. Well, you’re not alone.
Based on the 2019 average annual U.S. household expenditures, families spent around $63,036 each year, which is quite a substantial amount. In 2018, the average expenditures of American households were $61,224, with the top slices of the pie going to food ($7,923/year), housing ($20,091), and transportation ($9,761).
Knowing these figures is critical, as the numbers would give you a clear sense of what expenses you should prepare for and why making conscious efforts to save money is critical as you’re establishing your new family. Here are eight handy tips on saving money that you should consider:
1. Consider renting, instead of getting a house loan or mortgage.
If you don’t have a ready fund that is big enough to buy a house or if your income is not feasible to take out a home loan or mortgage, then consider renting first. There are many rental apartments that you can check out to find the one that best suits your budget and personal preferences. It doesn’t need to be fancy; it just needs to have basic amenities like a kitchen, toilet and bath, a room, and storage like cabinets or a closet.
2. Use a budgeting app.
Having a means of tracking your expenses is one way of disciplining yourself financially. A budgeting app allows you to simply input parameters like fixed and variable monthly expenditures, target savings, and debt payment goals. With such parameters clearly indicated and tracked through the app, you’ll know if you’re going over budget or if you’re on track to hit the goals you’ve set for yourself on a monthly basis.
3. Breastfeed as much as possible.
If you have a newborn in the family, breastfeeding as much as possible (if possible in the first place, that is) is one way of getting big savings. By nursing your baby during the first year at least, you can save $1,400 at the very least — money that you can use for other household expenses like utilities and food.
4. Don’t take the kids when shopping.
Not only can kids be hard to contain as they can be extremely hyperactive, but you also run the risk of spending way above your shopping budget when taking your kids with you. This is because kids love to point to things they want their parents to buy for them, which means you might not resist the urge to grant their wishes and end up ruining an otherwise excellent shopping budget.
5. Drop non-essential subscriptions.
Do you really need that premium Netflix account or you would be just fine watching regular TV shows? Wouldn’t it be wiser to not renew your gym membership since you spend most of your time at the office or taking care of the kids in the first place? These are pretty valid and important questions you should be asking yourself right now since non-essential subscriptions could set you back hundreds if not thousands of dollars. Such amount of money should be better off spent on more important household expenses.
6. Get health insurance.
One of the last things you would need during a crisis like COVID-19 is having a member of your family suddenly falling ill. The high cost of hospitalization these days can be enough to cripple even a family with financial means to support medication and medical procedures. If you don’t have the same luxury, then you have a more pressing need to get health insurance so you could address any emergency sickness in the family.
7. Buy cash whenever feasible.
A lot of heads of the family love getting things on an installment basis, only to realize way too late that they are essentially paying twice the retail price of the items they got. This is why instead of falling for such a trap, you should buy cash whenever feasible so you can save big in the process since you don’t have to pay for interest.
8. Buy only what you need and sell everything that you already don’t have any use for.
If you’re starting a family (and even if you already have a large one) and you don’t want to find yourself financially challenged, you should never spend on anything that you don’t need or hold on to things that you’re not using at all. Instead, purchase only essential items and sell the things that you don’t have any real use for so you can save big or make money out of the valuables that you have.
Just follow these tips and you’ll be on your way to financial stability as you start your family.