As much as you might think that kids don’t cost that much in life, it’s quite the opposite. The average cost for a child over the eighteen years or so they’re in your care is a whopping £166,000. That’s not pocket money for most people, and therefore, how you manage your finances is important to ensure you don’t go bust. With that in mind, here are some helpful tips to manage your finances with kids so that you’re making conscious decisions with your finances that won’t break the bank – too much.
Set yourself up with an efficient budget spreadsheet
First and foremost, look at setting yourself up with a budget spreadsheet. This is something that a lot of people won’t have, but it can do you the world of good if you’re someone who finds it difficult to manage your money in general. There are often a lot of expenses that come with life nowadays, and therefore, you want to look at how much everything costs and what you’re spending your money on as a household each month.
Unsurprisingly, there will likely be things on this list that you hadn’t realized were coming out of your bank account. Having a budget spreadsheet can certainly open your eyes to areas of spending that you need to address in order to save money in the long run.
Set spending limits each month
Spending limits are something to think about when it comes to a household. The more you spend, the more likely you are to go over budget and land yourself into debt that you don’t want to have.
It’s good to set spending limits because that way, you control your spending from getting out of hand. Look at what spending limits you can set that are reasonable and not going to put you in situations where you’re arguing over numbers.
Every household is different, so what might be necessary to you might not be something you want to do for your own. Some might want more, others might want to do less of a spending limit.
Educate your kids on the value of money – and that it doesn’t grow on trees!
The value of money is something your kids need to learn about and the only way they learn is by looking at your income. While there’s a lot they do learn in school, they don’t often learn about real-world situations when it comes to money.
If you’re teaching them about the household funds, they’ll likely get more of an understanding of what funds are available as a household, which makes them beg for the next best toy or gadget, something they think about with more awareness.
While we’d all like money to grow on trees, unfortunately, that’s not always the case, and therefore, it’s important to educate your kids with the right financial expectations.Â
Make sure you save into a rainy day fund
A rainy day fund is important to have, especially when you never know what to expect around the corner. Whether you need a personal loan for a new car or your boiler has broken down, a rainy day fund can be helpful in covering costs that you’re struggling to make up out of one month’s pay packet, for example.
Saving into a rainy day fund is certainly worthwhile and something to do more of where you can. Think about how much you could set aside each month because even the smallest of amounts will help when it comes to keeping on top of the fund should you ever need to use it.
Clear debt as quickly as possible
Debt is something you want to clear quickly, and you should never have too much in terms of debt, otherwise, it becomes a nightmare trying to pay it off.
With that being said, look to clear off debt quickly where you can. If you’re struggling to pay off the debt, then find ways to consolidate that debt so that you’re able to repay it at an amount and rate that suits you.
Don’t forget to plan financially for the future
Finally, be sure to plan for your future financially and for your children’s future too. While it might not be something you want to address, it’s certainly something you should be proactive in doing more of. From your pension planning to retirement to setting up funds for your children to benefit from as they get older. These tips will help you manage your finances in check and ensure you can live a wonderful life with your kids in the future.
