Look up in the sky. A stork is heading your way! More than 370,000 babies were born in Canada in 2019.
Having a baby is an exciting opportunity for parents. Yet you shouldn’t rush into it. You need to figure out some ways you can balance a budget and cover all of your family’s expenses.
How can you figure out how to budget and save money? What are some strategies for saving money while you are raising a child? How can you increase your income over the years?
Answer these questions and you can raise your child in financial stability. Here are 12 steps you should follow.
1. Write a Formal Budget
Before you do anything else, you should sit down and make a budget of your expenses for the next month. Think about everything you spend money on, including your discretionary spending. Make a list of each expense and attach dollar figures to each one that you are not willing to exceed.
You should account for every dollar you earn. You should write an item in your budget for savings that contains the extra money you are not spending.
Once you’ve written your budget, talk to others about it. Get advice on how much you should spend and ways you can start saving money with kids.
2. Consider a Few Budgeting Strategies
There is no one way to start writing a budget and saving money for kids. Many parents like the 50/30/20 strategy. 50% of their money goes toward necessary expenses, 30% goes toward pleasurable things, and 20% goes into their savings.
You can also try an envelope budget. You put some dollar bills on your desk and place them in separate envelopes labeled with your monthly expenses. This lets you visualize where your money is going and helps you avoid credit card debt.
3. Figure Out Your Long-Term Goals
You may have several long-term goals at once. In addition to caring for your child, you may want to save for retirement and build an emergency fund. You may also want to move homes or buy a new car.
Think about what you want to do with your life and write your goals on a sheet of paper. Then think about ways you can save money so you can achieve those goals. You may want to find a second job so you have more money you can shift into your accounts.
4. Pay Off Your Debt
You should pay off any outstanding debt as soon as possible. You can use a few essential tools to get debt-free like a debt repayment strategy.
You don’t have to pay off your debt before your child is born. You can make minimum payments on your debt and then put your extra money in your savings.
Try to avoid acquiring any additional debts. You should start paying in cash instead of using your credit card.
5. Prepare for Changing Expenses
Your budget should not remain static. As your child gets older, you may acquire additional expenses, and old expenses may fall away. You’ll stop spending money on diapers and start spending money on music lessons.
You can prepare for these shifts by having a little extra money on hand to cover larger expenses. You should review your budget every month and change it to reflect your current expenses and amount of money.
Keep in mind that many expenses for parents are one-time expenses. You will only need one crib or one set of strollers. You may need to shift your budget for one month to cover these costs, but you can then return to your old budget.
6. Keep an Eye on Your Finances
You may be spending money on things without realizing it. You should take a look at your bank account and see what your savings are once a month.
If you have investments, you should check them a few times a month. You should shift your money if you’re going through a downturn.
A financial advisor or a representative at your bank can keep an eye on your money for you. You can hire someone to do so, but you should have a meeting with them to check in on their work. You can also talk to them about how to save money or how to start an emergency fund.
7. Pursue Some Free Activities
You can do a lot of things with your child without spending money. If you want to read to your child, you can take books out of the library.
When your child wants to get out of the house, you can take them to a park or playground. You can also go on nature walks or arrange playdates with their friends.
Some museums offer free days for families or children to visit. Take a look at the calendars of a few local museums and visit them on these occasions.
8. Gift Experiences
Gifting experiences instead of items will let you save money. You can also create more meaningful birthdays and holidays with your child, helping them expand their interests and skills.
You can cook with your child, preparing their favorite meal. You can write stories, draw pictures, or go somewhere special.
Feel free to gift experiences to your child’s friends as well. You can bring them to a fun location to have a playdate or party.
When you do want to buy your child a toy, you can find a few ways to save money. You can buy a toy for cheap at a yard sale or thrift store. You can also rent a toy from a friend and return it to them when your child is done playing with it.
9. Teach Your Kids About Money
If your child knows a little bit about money, they can avoid impulse buys and be content with what they have. You can read books to your child about saving money and working hard for money.
You can give your child a piggy bank, but it may be hard for them to visualize the money inside of it. A clear jar lets them see how many dollars and cents they have, and they can understand how they are growing their savings.
10. Cut Your Expenses
Reusing school supplies is an easy way to cut your education expenses. If your child’s folder or binder is still usable at the end of the school year, they should use it for the next year.
If you need a babysitter, you can ask a relative or friend to step in instead of hiring someone. You can also split the cost with another parent and go out to an event together.
You can deduct entertainment and meal expenses from your taxes if you take clients out. Even if you’re self-employed, you can claim these expenses if they helped with your job. Talk to a tax advisor to figure out how you qualify and how you can find other ways to reduce your taxes.
11. Develop Additional Income Streams
The more money you have on hand, the more expenses you can cover and the more savings you can build. Caring for your child can take up a lot of your time, so you can look for passive ways to increase your income.
You can turn your hobby into a revenue generator. You can sell poetry or short stories to magazines, and you can hang up your artwork in a gallery.
12. Sell Your Excess Products
You may have spare diapers, bottles, or other supplies on hand. You can keep a few of these supplies, especially if you plan on having another child. But you can make some easy money by selling them to another parent.
You can sweeten the deal by dropping the products off at their house. A parent may be willing to pay a little extra for your products because of this convenience.
Consider conducting a yard sale. You can work together with other parents to sell your supplies and advertise your event. Try to offer a range of products for sale, including books on how to raise a child.
Figure Out How to Balance a Budget
Learning how to balance a budget requires studying a few steps. You should prepare for your child’s birth by developing a budget and planning for additional expenses. Be willing to adjust your budget and investments over time.
You can save money for retirement while you raise your child. Try cutting your expenses on gifts and impulse buys, and find multiple ways to grow your income. You can always entertain your child through free experiences and talking to them about money.
Get financial assistance whenever you need it. Credito extends loans to Canadian parents. Request a loan today.