Parenting opens our eyes to a new way of looking at the world. Our children make us more selfless and ready to do right by them, no matter what. Part of that maturing process should be creating a budget for your family and securing your children's future.
It is not enough these days that we just have enough money to make it through the month. There are way more demands on our bank accounts than there were for previous generations. While kids will always want the latest and greatest toys, those same toys have become increasingly expensive.
The wants may be more expensive, but the needs have increased exponentially in price as well. In this day and age, our incomes have managed to stay relatively flat while everything around us inflates in price. This is the budgeting juggle we must all face as parents.
We want our children to be taken care of, and making a solid budget and sticking to it is a great start. After you have mastered this, it will be time to bring your kids into the money discussion. They will need these same tools in their future lives.
Think of the Kids
When we sit down to create a budget, our children will take top priority. Whether it is paying for groceries, daycare, or medical care, there are tons of factors that kids make you responsible for. This makes your budget even more important, and keeps the pressure on till it is complete.
At least it should keep the pressure on. We recommend that you take the time to make a budget for your family. Not many people enjoy budgeting, but it is a facet of parenting that keeps your family in good financial standing. Here are some guidelines to help you create and maintain your family's budget.
Create a Budget
In its simplest form, a budget will track your expenses and balance your income against all of the outgoing money. With the added expense of children this becomes even more critical. We will always have the restriction of how much is coming in versus how much needs to go out to support our family.
It is with this mindset that we approach our budget. We will have to prioritize the things that we need, and determine what wants we can fit in. Without hard numbers, this can be very difficult to do.
No matter how you do it, start a budget. Whether it is spreadsheets, or a dedicated app on your smartphone, find a way to track expenses. Once you have a broad overview of those expenses and an idea of how much money is coming in, we can move to the next step.
Modify the Budget
Taking into account all of the expenses we have isn't enough. Being a parent means we have to be pliable with our budget to accommodate unexpected expenses. We hope injuries never happen, but we need money there if they do.
This means that you have to continue to revisit the budget and modify it for your current situation. As you will see later, you will also need built-in protections to keep your budget intact through emergencies. Kids are ever evolving as they get older too.
Don't get stuck in your ways with your first budget. Your income may increase, and your kids' situation will definitely change, so at least quarterly you should look at your budget with fresh eyes.
Balance Your Desires
As a society, we just want too much. That may seem like a bold statement, but as technology increases, we are inundated with more items that tickle our fancies. This becomes glaringly clear when we are trying to balance our budgets after having kids.
We all know that the kids' needs come first, but when do our needs and wants come into the equation? That is the difficult part of this whole discussion. You shouldn't have to give up on your passions and hobbies because you have kids.
This is the tricky part about budgeting, especially if you are on the lower side of incomes. There has to be something in your budget that allows you, the parent, to enjoy yourself at some point. This piece of the budget just gets minimized because of the responsibility of parenting.
Do not be afraid to put some portion of your income towards your desires, just make it further down the list of priorities. That may hurt to hear, but I think every parent will agree that the kids and our needs come first.
Teach Your Kids About Money
Too many times we can be overzealous with how we protect and insulate our children from the world. When it comes to money and budgeting, it seems parents often wait until their children are much older to start instilling these responsibilities. Kids are remarkable learners at young ages, and it is best to start here with their financial education.
A child could start learning about budgeting and money from as early as three or four years old. This is the time when children are at the height of their learning capabilities. You don't have to get into advanced concepts, but you can teach them the value of money and how to save.
You can teach your children to balance the wants and needs in their lives, and show them that spending all of our money is not always the right way to go. Kids have a hard time letting go of things that they want as they seem to have a "right now" mentality to the world. Before this sets in fully, we can teach them to hold off on these desires.
That shiny new toy may not be exactly what they need right now, and once we master this in our own lives, we can pass this along to our children.
Stick to the Plan
Hopefully you have an idea of what is going to go into your budget by this point, if you had not already settled on things. Just because we need to be flexible in our budget to upcoming events or situations, does not mean we should stray from the budget. Going outside your budget for extraneous items or activities can negate your budget.
Budgets are supposed to be rigid to keep you from falling behind. If you pull money from another section of your budget unexpectedly, you may need to make that portion up in some way. This may mean pulling from another segment and then another, until you reach into areas that can not be drawn from.
The point is, we always make excuses on why we need the money now, but if you don't stick to your budget, you will make those excuses every month. Set an example for your kids, and put their needs first, while maintaining the plan you set forth.
Life Is Messy
We all know emergencies can come out of nowhere and blindside us. Especially when we have children. You have to build a contingency plan into your budget that can accomodate these factors. This will be your emergency fund and it is imperative that you have one.
There are a lot of moving parts in your daily life, and if something should fail, like a car breaking down, you have to be prepared. In this example, your kids need to get to school and you need to get to work, but where will the money come from to fix your car?
Create a savings account that can cover all of the unexpected things that may come up in life. While it may be any number of situations, getting caught off guard will not go well without an emergency fund. Saving money should be a priority, especially as a parent.
Save Money Everywhere
Coupons are worth the effort. Clipping coupons from a newspaper or digitally, can give you the extra money you need to support your children. It can be very expensive to raise those kids, and saving money is extremely important.
You should find the best deals on clothes, shoes, food, or anything else you may need. It may even be necessary to buy used items. No matter what your kids need, find a way to save money on those purchases.
Buying things new and full price is a quick way to blow your budget. Over the long term every dollar you save by shopping frugally, can be put towards something else the family needs. Don't be afraid to treat this as a competitive sport, a game of buying as cheaply as possible.
Long Term Goals
While we are now prepared for short term problems and bills, what about the long term aspects of parenting? Are you going to fund your child's college education? Are you going to provide them transportation at age 16?
All of these considerations have to be taken into account when setting your budget. It may be tough to look past next week, but it is something we should do. This money will be separate from your emergency savings and should be earning interest.
Setting goals like this help to keep clear what you may need and want today. If you have a college fund set up for your kids, you have a clear understanding that it must be funded today. You fundamentally realize that what you do now will impact them later on. This is an important aspect of budgeting in general.
Make long term goals and make sure they get funded. Discuss with your kids what their dreams and aspirations are. Doing this will help you decide where your budgeting dollars should go.
Another reason you should be budgeting as a parent is because of how hectic our lives get. What if you forget to give your child their lunch money one day? That feeling of disappointment when you forget the essential things is well worth avoiding.
Creating and sticking to your budget helps us find peace of mind that everything is paid for. You can also take this time looking at your finances to plan ahead for the small things like lunch money. In the rush of getting the kids ready for school, it is too easy to forget things in the heat of the moment.
This makes budgeting and visiting your expenses regularly even more important. If you have a lunch money jar on the counter, it just becomes habit that you deposit and remove the money when needed. Your budget is this same principle—just on a much larger scale.
It Gets Easier
Becoming a parent changes your life forever. Being a great parent takes a lot of time and practice before we feel like we have a handle on things. Budgeting is the exact same way.
No matter how much advice you get on how to manage your finances, you will have to get out there and practice this skill. With time, you can make a budget that fits your family and takes into account all of life's little messes. You will have a cushion in savings that can save your bacon in a pinch.
Think of your kids and their needs first. That includes housing, utilities, groceries, and everything you would normally expect from being a parent. Then budget out the savings and long term goals. Save money everywhere you can, and apply the savings to other aspects of the budget.
Parenting may be difficult, but with good tools and a strong budgeting mindset, you can build the best future possible for you and your kids.