How to get ahead financially when you have a young family

Having kids is usually a high point in our lives emotionally, but it can be a real low point financially. Usually, you’ll find yourself spending a lot more and making far less. With the cost of raising just two children now more than $800,000, it can also feel like there’s no end in sight. If you find yourself struggling to stay afloat after children came along, here are some ways to avoid losing your savings – and your sanity.

1. Trim the subscriptions

Often we spend money on autopilot, especially in today’s subscription-based world. Take a look at all the costs that come out of your account on a regular basis and see what you really need and what you could live without.

Do you really have time to read the newspaper every morning? Or have a luxury gym membership? Your answer could well be “yes," in which case keep reading and exercising. But if it’s a “no," think about deferring those costs - or looking for a cheaper alternative, such as paying as you go - until life settles into a more predictable rhythm.

Another area of our lives that often sits on autopilot is health insurance. Be sure to look at your policy - especially if you have extras cover - to make sure you’re getting good value. If you’re not, weigh up whether you should drop the extras or look for a different policy that covers the kinds of things you’ll actually claim for.

2. Save money on your bills

For the costs in your life that you can't avoid, such as your mortgage or utility bills, now is the time to negotiate a better deal. Comparison websites and internet research can help here, but the best way to do this is to call some providers and see what they can do. If you find a better deal, let the companies you already use know that you're considering changing and, in many cases, they'll be willing to price match so that you avoid the hassle of switching.

If you’re worried about how you’ll meet your loan repayments if interest rates rise, why not consider fixing all, or part of, your mortgage so that you know how much you’ll be spending.

3. Draw up a realistic budget

Devising a budget might seem like an obvious suggestion, but a lot of people don’t update theirs once kids arrive.

Some of the costs in raising children aren't transparent. There are nappies, childcare, and education but you'll also be spending more on groceries, doctor's bills and activities such as swimming lessons.

Going to a restaurant with kids can be pricey - up to six times more expensive than eating at home. And kids rarely appreciate the chef’s efforts. You can save a lot of money simply by being organised. Plan the meals you’ll eat at home so that you’re not throwing away food that goes off or buying anything extra. Have non-perishable snacks stashed away in the car or the nappy bag.

Where possible, buy in bulk. That goes for anything from soap, to toilet paper, to discounted children’s books.

4. Compromise where you can

Before you became a parent, your idea of a holiday may have involved passports and airfares. But life has changed now and so often have the contents of your bank account. A staycation with a babysitter is almost always cheaper - and much more enjoyable - than hauling small children onto an aeroplane. There are always undiscovered treasures in your city or neighbourhood.

Your expectations may also have changed. These days buying anything new for the children is almost pointless. Not only will they smear food on any designer clothing outfit, but they'll also outgrow it in the blink of an eye. See if you can save money on prams, accessories, and electronics.

Take in as many hand-me-downs as possible because you’ll be passing on those bundles to another friend-in-need soon enough.

You may also have to think about how many activities you want your child to be enrolled in. There are many budget-friendly playgroups that you can attend on an ad-hoc basis, not to mention free events at your local library.

5. Enjoy this time in life

Remember to enjoy this precious time in life and go with the flow. It’s not a period where you need to be punctual, precious or precise. Mistakes will be made, food will be dropped, and money will be spent.

Consider forming a babysitters club with friends where you can take turns minding each other's children. Not only will this help costs down, but it will also give you the chance to have a much-needed break with your partner, family, and friends.

Want more?

If you’d like to know more about saving money with young kids get in touch.

Any advice given is of a general nature only and does not take into consideration your personal circumstances. Please consider the appropriateness of the advice before acting.

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