5 Ways Your Budget Will Change When You Start a Family
A lot of things change when you have a child. You’ll find yourself prioritizing different things, and your old priorities might seem silly in comparison. Children also give you a new set of responsibilities to consider. You’re no longer just looking after yourself and your spouse; you need to make sure that your kids are safe and comfortable too.
One of the biggest things that will change when a child comes into your life is how you manage and spend your money. While many new parents plan for the basics, like paying for diapers and formula, it’s easy to overlook other areas where your budget might change going forward. Here are just some of the things you’ll need to think about.
1. Childcare Costs
If both parents are going back to work after the birth of a child, then they’ll need to pay for childcare to make sure that the child is well-supported when they’re not around. Unfortunately, while childcare is often a necessary expense for professional parents, it can also be very expensive, depending on where you live. If you’re planning on working after you have your child, then you need to make sure that you add childcare to your list of expenses.
On the other hand, if one parent is staying home from work to look after the child each day, then you’ll also need to plan for the impact that the loss of one income is going to have on your budget.
2. Insurance Expenses
Another area you’ll need to look at when you’re adjusting your budget for the arrival of a new child is the changes to your insurance expenses. You’ll have thirty days from the day that your child is born to add your youngster to your health insurance policy and make sure that they’re covered for anything that might happen.
Remember that when you’re adding children to your healthcare policy, the new cost of your premium will typically reduce the amount of money you take home each month. You’ll need to be able to adjust your income on your budget too.
3. Saving for the Future
It’s not just the immediate expenses that couples need to think about when they have a new baby. You also need to consider the long-term expenses that might pop up in your life too. For instance, from the moment you have a child, it might be a good idea to set some money aside to help you cover the costs of college. If you’re currently in debt, then you might need to deal with that issue first, but a good way to make sure that you have money left over for savings, it to compare your loan options before you get into a new loan.
Remember that comparing your loan options online will help you to find the lending option that’s best suited to your needs. Different loan providers offer unique interest rates and benefits, so take advantage of lower rates wherever you can.
4. Changes to Your Taxes
Sometimes, changing your budget to suit the arrival of a child doesn’t just mean thinking about the extra expenses you’re going to incur. It’s also important to consider the additional help that could be available to you as well. There are tax benefits involved in having a child. For instance, you can claim one more person on your taxes, and you may even be able to claim some of your childcare expenses with Child Tax Credit.
When you’ve had your child, or just before you’re due to give birth, it may be worth speaking to a professional about your options regarding taxes and benefits.
5. Housing Changes
If you were living in a relatively small home before you had your child, then you may eventually decide that you need to move somewhere bigger. Though your child can potentially share a room for a short period of time, you may need to move into a bigger property once your youngsters reach school age. You may even decide to move to make sure that your child is in a good school district.
Plan in advance for how much extra a move to a new home is going to cost you in terms of mortgage and deposit expenses. It’s also worth noting that the other monthly expenses you face will go up when you have a child to think about. You’ll typically spend more on things like electricity, food and even entertainment.
