Growing a family can be expensive. The more people you add to your family, the more difficult it gets to manage your household spending. While this should not deter families from having as many children as they hope for, it is a good reason to plan and manage your budget carefully.
Over the past few decades, the cost of raising a child from birth to legal age has increased exponentially. Whether you are starting a family or having an extra kid or two, it is vital to ensure that you are financially sustainable.
Here are a few ways to avoid overspending.
Willingness to Change
To control spending, you must be willing to make lifestyle changes. Make an effort to spend less until your family attains financial sustainability.
This requires disciplined spending and diligent saving. Having a realistic savings plan is critical as there are always going to be unexpected expenses that need to be paid.
In addition, families need to take a critical view of their spending habits. This is especially important when using a credit card. The nature of credit card spending is very different from cold, hard cash. You simply swipe and the goods are yours. The whole process feels painless and therefore lends itself to over-spending.
One rule of thumb is to add a balance to your credit card that equals the limit. So, for example, if your limit is $2,000, then add a starting balance of $2,000 (so you now have $4,000 of available funds).
Treat the credit balance of $2,000 as your starting balance. In other words, never let your spending exceed $2,000.
In situations where it is cheaper to purchase an item outright when compared to renting over a long period, you should make purchases but be cautious about it.
An excellent way to finance purchases would be to take out a loan to that effect, but that is easier said than done for those of us with lower credit ratings. Fortunately, there is a platform that specializes in providing loans for major purchases to people with bad credit. On this platform, even if you have a bad credit rating, you can still borrow.
Why buy when you can rent?
There are a lot of things you will need to purchase when starting a family, so why not consider renting some of those big-ticket items to assist in those early months?
A baby capsule is a great example of a product you could rent, particularly when used to transport newborns home from the hospital, which is so beneficial in those early months.
A lot of Australians have opted to hire a baby capsule. This makes sense if you are a stay-at-home mum who does not need to be transporting or transferring the baby to and from locations on a daily basis.
There may be other occasional items that you need only rent, borrow or hire as the occasion arises. While this may not always be convenient, it may be a big money saver for families.
Do your homework in regards to renting and leasing other household items and weigh up the long term costs, replacement costs, and potential savings.
Cut down on Subscriptions
Subscription packages have become very popular in recent times that they’ve earned an adorable name: Subscription Affliction.
However, there is nothing adorable about the toll it takes on your wallet. The average Australian has multiple monthly subscriptions. If you calculate how much you spend, you will notice that they make up a significant chunk of your monthly outflows.
Unsubscribe to each subscription service monthly until you no longer have any or you are left with one or two.
Wholesalers and retailers have huge sales at strategic times during the year. Make a list of all the non-urgent things you need and wait until the next big retail frenzy before making purchases.
That being said, you should participate and take full advantage of reward programs. A lot of the large retailers have money-back programs that reward your patronage.
Many families can find everything they need at a local Salvation Army store. Good clothes can be bought for children and household items in excellent condition can be purchased for much less.
Children’s’ clothes and toys, along with kitchenware and bedroom items such as blankets are often in excellent condition. The savings run into the hundreds of dollars if you are a savvy shopper.
Structure your Meals
Reduce the overall cost of eating by creating and following a meal plan or structure.
When you know what is for dinner, lunch, and breakfast every day of the week for the next month, you can effectively organize your grocery shopping.
With this method, your family can also eat healthy meals, which makes them fit and healthy and keeps you from spending money on medicines and hospital visits.
The easiest way to hurt the environment and your bank account is to waste meals. Strive to be more creative with meals and leftovers. If you have a bit of kale from last night’s dinner, incorporate it into tomorrow’s lunch.
You can also reduce waste by only preparing meals that your family can finish in one sitting.
We live in a throw-away society. We want our food to arrive quickly and we rarely conserve left-overs. Get creative in the kitchen and look for ways to use all of the food in your cupboard and in your fridge before you throw it away.