How to Balance Your Household Budget When Raising Kids
Raising kids is an expensive business. Experts say it can cost as much as £160k to bring up a child to the age of 18, and since many kids stay at home for considerably longer, expect the bill to continue rising.
With the cost of living going through the roof, many families are struggling to put food on the table and pay the bills. The more kids you have, the more expensive life becomes, especially as those kids grow older and their wants and needs increase. Balancing a budget will be difficult but fear not because we have some useful tips.
Create a Budget
It’s hard to balance a budget when you have no idea of your income and expenses. Start by logging everything you pay out each month, including groceries, leisure expenses, fuel for your car, etc. See how that figure compares to your income. If there is a negative balance, you need to start making savings. Any excess money can be funnelled into a rainy-day savings fund.
Plan for the Big Expenses
Things like Christmas and family holidays are big expenses, and the best way to manage them is by saving in advance. Work out how much you need to spend and put a bit aside each month. If money is tight, be realistic about whether you can afford a holiday and adjust your plans accordingly.
Are You Claiming Everything You’re Entitled To?
The benefits system is there to act as a safety net, but a lot of families are too proud to claim the benefits they are entitled to. Some people don’t realise they can ask for help or are put off by the application process.
If your family is on a low income, even if you work, you may still be entitled to benefits. As well as means-tested benefits such as Universal Credit, there are also other health-related benefits designed to help families with complex health issues.
Even if you are a foster parent, you might still be entitled to Working Tax Credit and Child Tax Credit for your own children. Remember, the fees and allowances you receive as a foster parent are not treated as earnings when claiming benefits, so don’t let a low income put you off from offering foster care to children in need.
Reduce the Cost of Debt
Debt is a big expense. If you have outstanding credit card balances or personal loans that eat into your monthly income, see if you can reduce the cost of borrowing by moving the debt to a cheaper vehicle. For example, someone with a strong credit rating would benefit from applying for a new credit card with a 0% balance transfer term, and then moving the balance from a different card on a standard variable rate to the new one.
Include the Kids in Money Conversations
It’s never too late to explain the value of money to kids. Talk to your children about money and budgeting. Make them aware of how much everything costs, so they understand that you don’t have spare cash for a new iPhone or pair of designer sneakers. Encourage them to take a part-time weekend job if they are old enough, so they can build a savings account and buy the things they want.
Budgeting is tricky when you have kids, but if you do run into difficulties, seek professional debt advice as soon as possible.
