Are you a new parent? Then chances are, you’re currently in the thick of it. Yes, new parenthood can come with its abundance of joys and newfound delight, but it’s important to keep in mind that the beginning of your family can also bring about a fair amount of chaos. You can get so wrapped up in everything that other responsibilities will naturally fall by the wayside. And sadly, the rest of life doesn’t stop just because you’ve had a baby.
In most cases, you or your partner must return to work. And on top of this, you’ll still need to attend to all the household chores, life admin, and other mundane tasks that take up our daily existence. You’ll have to stay on top of everything alongside caring for your newborn.
And whilst it’s fine and good to leave a few dishes in the sink here and there, household finances are one aspect of life that you can’t neglect as you’ll likely be a single-income family for a while, even if you have a period of paid parental leave. This helpful article will share how new parents’ can manage their household finances. Read on to learn more.
Manage Your Mortgage
If you’ve got a mortgage, you’ll still have to make repayments as per your contractual obligations. If you are thinking of refinancing your home loan, however, consider using a mortgage repayment calculator to get a solid understanding of your minimum required payments with alternative loan rates. You will likely have to reduce your repayment amounts while you raise your baby, as the child’s primary caregiver will no longer have a steady income. So be sure to use the calculator tool, so you’ll know how much money is going to your mortgage each month, which will be helpful when preparing for our next step in the guide.
Set a Budget
The second thing to do is create a monthly budget to track all your income and expenses in a typical month. A range of free tools available for both phones and computers can assist you with this. Input your household income from work or other sources, such as investments or side hustles, and then calculate your expenses.
You must track everything you’re paying for too – your mortgage, insurance, subscriptions, child care fees, repairs to your car and home, the works. Then, you should be able to see if you have any surplus money that can be put towards savings or spending on items that aren’t essential. Doing this helps you determine your household’s total income and expenses.
No Surplus Money? Time to Cut Costs
If the previous step in your household financial planning reveals that you have no surplus income each
month, we strongly recommend that you assess your expenditure and work out where you can cut some costs. This should be easy to do as you’ve tracked all your spending in the budget tool.
Some everyday expenses can quickly add up over the month. Things like takeaway coffee, eating out, television streaming, retail subscriptions, online shopping, gaming, supplements and outings can all cost you hundreds over a month. Figure out what you can live without, and you can free up some cash for the household. For instance, if you have three streaming services, cut to one. Try to shop locally instead of paying for delivery on online goods, and encourage your partner to pack lunches for work.
Compare Insurance and Utility Costs
A significant household expense is insurance – car, home and contents, health insurance, and any of the other policies your family may need. These bills can range into the thousands each year. They are often essential expenses, too, so it’s not like you can live without them. After all, you’ll want to be covered in an emergency or natural disaster, and you need home heating, cooling and internet access.
It’s worth comparing insurance providers when your policies may be up for renewal, as this is when your current provider will either jack up the cost of your premiums, or perhaps even let you in on a few good deals or discounts. Insurance companies want customers and will offer discounts for new sign-ups. Use an online comparison tool or get a quote from a new company, and you could save some money for the household.
The same applies to utilities and your internet service provider – it pays to shop around for a new deal, and you can do this anytime. You could save hundreds a year with a new internet, gas, power or other utility provider.
Spend Time, Not Money
Finally, if you’re spending money on going out for activities with your family, consider if you can spend time with them for free. For instance, compare going out for lunch to a picnic in the park. You can save money by buying food at the supermarket and grazing while you enjoy a sunny day with your new baby.
Or why not stay home instead of going out to an event? You can play card or board games with your partner while you cuddle your newborn. There are plenty of ways that you can spend time together without having to spend a dollar in the process. So get thrifty for your next few date nights!
A Confident Conclusion
This helpful article has covered the new parent’s guide to managing household finances. With these tips, you can budget, save money and figure out life on a single income.
