Starting a family can be daunting in many ways. You suddenly have a lot more responsibilities and a lot less time. One key aspect of this new journey is managing finances.
As of June 2021, Australia had 7.3 million families, with one in seven having a single parent. With prices of everyday items skyrocketing due to inflation, you need to start planning your money immediately.
You can start by getting organised and using money saving apps Australia. You must also ensure to save up for emergencies and unpredictable situations.
Read ahead for tips that will help you plan your spending, especially when welcoming a new member into the family.
Know Your Budget
The first step of any financial planning is to take stock of your earnings.
Make a note of your income after tax. Then list down all your expenses, current and foreseeable. Divide your expenses into fixed and variable.
Fixed expenses are the ones that do not change every month. For example, your rent, an EMI that you are paying, utility bills, or a loan instalment. Groceries, shopping, entertainment, and household and vehicle maintenance fall under your variable expenses.
Now you have a map of exactly how much money you spend and how much you save. This is a good starting point. Here are some ways to save when a baby is on its way or even if you already have a child.
If you plan to have only one child, try and borrow from friends and family. A lot of baby stuff is one-time use like bassinets, baby bouncers and capsules. Hand me downs or second-hand purchases online can save you a lot of money.
When it comes to clothing, end of season sales is your friend. You can size up a little so that your kid can grow into those clothes. You can also form a group with other moms for swapping baby clothes.
Most schools give you the option to buy uniforms second-hand. As your kids grow older, their academic books start getting more expensive. You can contact parents of kids one grade above yours and borrow or buy their old books.
Also, keep an eye out for any scholarships or community events that will help you reduce the fees. If the school is nearby, encourage your kids to cycle. This will help you save on transportation fees.
Children often want to partake in social activities that can accumulate to a hefty amount. You can get your child to substitute going to restaurants or shopping with spending time at the park or the library.
Ask their friend groups to organise community bake sales and motivate them to earn their own pocket money.
While budgeting may come naturally to some people, you might not be particularly good at it. Good thing there are lots of resources to help you with it!
You can start on your own using an Excel sheet or use the tones of money saving apps Australia. These apps allow you to choose your budgeting method and help you create a saving plan.
Some apps even automate the savings procedure for you. For instance, if you opt for a 50/30/20 savings plan, the app will transfer 20% of your incoming salary directly to your savings account.
Financial planning is a tiny initial step that can go a long way. Once you have a handle on the basics of money management, you can dabble in micro-investments and make your money grow!