Bringing new life into the world is an indescribable joy. Starting a family is rewarding, stressful, exhilarating and uniquely affirming all at once – but it can quickly become difficult to ignore the financial impacts of such a life event.
This is particularly true today, with the rising cost of household goods having demonstrable impacts on household budgets. If you’re starting a family of your own, how might you navigate such a tricky subject?
Assess the Situation
Before you make any sudden movements as to saving or investing money, you’ll need to have a lock on your financial situation as it stands. This means performing an ‘audit’ of your household finances. Do you and your spouse have a joint account, separate accounts or a combination of the above? All should be accounted for, and a detailed map of your financial contributions built.
How much do each of you bring in, for one? How much of this joint income is promised to mortgage payments or rent, as well as utilities and essential grocery items? Between money saved, money coming in and average monthly expenditure, you should have a decent picture of your financial stature – and an idea of where to begin.
Set a Budget
Your first major step should be to set something of a budget. You’ll be working towards actively saving where possible, for numerous reasons we will establish shortly. You will also need to have an idea of future financial burdens, and their impact on your finances. For example, bringing a child into the world necessitates the regular buying of new clothes, not to mention the addition of another mouth to your grocery plans.
Anticipating these new financial aspects to your household is key to maintaining financial security. Consider opening a joint account for the express purpose of managing household costs old and new, and diverting a pre-set amount of money to that account each month.
Save, Save, Save
The above account would be a current account for regular daily use, but you should also think to create an account specifically for saving.
This account would be used to deposit extraneous cash, first to build something of an emergency fund and then to receive funds for larger future milestones. You might have to save up for a larger home, for example, or you might prioritise future academic fees for your child or children.
Change Your Habits
Despite all of your best-laid plans, your new family might still be a costly endeavour. The cost will always pale in comparison to the sheer joy your family will provide you, but this does not change the potential financial impacts of rising costs.
To this end, making some lifestyle adjustments may be necessary for the greater financial comfort of your household. This might involve downsizing your car to something smaller but more reliable, or changing which supermarket you shop at.
This article is intended as general advice only. For personalized advice, please speak to a financial advisor.
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