Managing Your Finances with a Young Family

Are you struggling to keep on top of your finances with a young family? Well, you’re not alone. The average family with two children bring in £31,000 a year after tax, but if you fall below that number, have more children or have debt to clear, it can be hard to make ends meet. Here’s how to mange your finances with a young family, however much you earn:

Determine what your income is

The first step towards managing your finances with a young family is to know precisely how much your household earns. If your children are old enough or you’re able to secure good childcare for them, both you and your partner will be able to earn money while raising a family. But, this isn’t possible for everyone: if you can’t afford childcare or would prefer to look after your children yourself, your family income is going to be affected. So, figure out what you earn as a family every month, taking in to account diminished earnings or childcare expenses.

Set a budget

Then, once you know how much money you have to play with, give yourself a budget. Detail how much money currently leaves your bank account for essentials (such as accommodation, utility bills and food), and then calculate the necessary extras you pay for (such as a form of transport, toiletries and a mobile phone contract). If you have any spare money left over, set some aside for savings (you never know when you might face an emergency or need to replace a boiler!), and then see what you have left. Surplus money can be used for anything the kids want, and if you still have money to spare, you and your partner can use it for yourselves or the family.

Plan ahead

The key to managing your finances with a young family is to plan ahead. If you know that September means buying new schools uniforms, save up over spring and summer so that you have a pot of cash to buy everything the kids need. Christmas is always an expensive time, so set an upper limit on the amount you want to spend on each family member and stick to it, saving up throughout the year. Similarly, if you want to go on a family holiday, book early and pay for it instalments, or do it last minute and be prepared to go wherever the travel agent can find you a cheap deal.

Buy in bulk

It’s also a good idea to buy in bulk. For instance, buy long-life milk by the tray rather than the carton, buy bags of rice and potatoes in large sacks, and buy things like toilet roll and shower gel in bulk too. It might feel like it costs more to do this initially, but it’s cheaper to buy household essentials in large quantities than it is to keep replacing a smaller amount every week. If you can’t afford to do this, or don’t have the storage space, consider using coupons while you’re doing the weekly shop.

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And if times get tough…

… consider taking out a loan. There are lots of loans available (such as a personal loan, a logbook loan or a loan from your family member), and you might find that it’s precisely the thing you need while you’re in the early stages of providing for your growing family. Taking out credit could mean that you’ll be able to buy a new car, meet your mortgage repayments or just guarantee that there’ll be plenty of money for food shopping, and it’s not something you should be ashamed of… many of us run into financial difficulty at some point in our lives, and having a young family is certainly an expensive time! Just make sure that you can afford to repay whatever you borrow so that you don’t stress about your finance