Family finances are incredibly important processes to get right. That means doing things like creating a budget and practicing money-saving tips.
Starting your life as a dad can be super expensive, so you could be entering ‘dadhood’ with a certain amount of debt or, at least, less well-off than you were before.
With a little effort, you can easily see your family’s finances growing healthier over time. Here are some of the best tips when planning your finances and budgets.
- Develop a Monthly Budget
- Try to Save
- Prepare for the Unexpected
- The Top Money Saving Tips For Families
1. Develop a Monthly Budget
Naturally, your monthly expenditure needs to be less than your monthly income, that’s a given. It might be the case that your adoption or surrogacy process has made you go into debt. For some, this requires dipping into your nest egg to cover all the costs.
The size of the gap between expenditure and income depends on your ability to budget. If your expenditure is currently greater than your income, try not to panic. This happens a lot throughout our lives, especially when we’re met with unexpected bills (which we’ll come to).
Budgets are all the more important when they’re designed for a family, so take the time to sit down and figure one out. First, determine your overall income. This might be a mixture of your salary, any other income and any benefits you may be receiving. If you’re self-employed, make an average of what you’ve earned in the last six or twelve months.
Second, investigate how much you’re spending and what you’re spending that money on. To do this, go over your bank account and credit card statements for the period of time you’re trying to budget for. This may take some time, but it’s the best way of getting an accurate view of your spending habits.
For example, imagine you’re spending around $4 a day on coffee. While it may be delicious and what you need to perk yourself up after taking care of early rising kids, that little sum adds up over time. After a year, you could have spent $1,460 on your daily coffee alone (even more if you buy a cookie or croissant to go with it). Looking into things like this gives you clear visibility on where your income is going and helps you to realign your spending habits.
These are the items you’ll need to keep track of:
- Bill payments
When you’ve done this, split them all into two categories: essential and non-essential spending. (Unfortunately, your daily coffee likely falls into the latter column). Essentials are the things you need or the things you’re obligated to pay for, such as weekly food shopping, diapers or mortgage payments.
When you subtract your essential expenses from your overall income, that’s where you find your ‘disposable income’ - that brilliant bit of money that can go towards anything: gifts, dates, days out with the family or saving.
When budgeting, a lot of it comes down to common sense. When it comes to non-essential spending, ask yourself “Should I be spending this much on x?”. When it comes to essentials, ask yourself “Can I find this essential service cheaper elsewhere?”. Being proactive with your budgeting can really help you create a healthy financial plan for you and your family.
2. Try to Save
Saving is an important practice, especially when it comes to family finances. Additionally, as a queer man you may be looking to expand your family with another adoption or surrogacy, which makes proper saving all the more important.
Think of saving as ‘safeguarding’, adding a cushion to your family’s future financial health. There are a number of methods you can choose to save money with:
- A conventional bank account.
- A pension.
- An easy-access savings account.
- An investment fund for your children.
You don’t need to be putting huge amounts away, but remember to be consistent with your deposits and try not to dip into it. You’ll also need to consider different types of savings accounts. For example, if you’re saving for a family vacation, a regular savings account with a high rate of interest would potentially be your best option.
If money is tight, just pay a little in. Also, before you begin saving, make sure you’ve paid off any credit card or overdraft debts. This will make sure you can focus purely on saving when the time comes.
3. Prepare for the Unexpected
Unexpected bills can come at any time. Your car could break down or your child might need a new pair of sneakers. It’s recommended that a family should have enough to cover at least three months of essential spending in a savings account.
This amount of saving is a great buffer if you find yourself unemployed, giving you time to find a new job. However, this can be hard for some, so here’s some more tips on dealing with unexpected financial burdens.
Make the most of any savings you have by researching into accounts that offer higher rates of interest and don’t have any nasty withdrawal fees. Some families might not have a substantial amount of money saved, which is why it’s important to start saving as soon as possible.
Another quick way of making a more proactive budget to help with unexpected bills is to round up your monthly expenditures and round down your income, so that you’ll be saving that little bit more than you usually would. Imagine you earn $2500 a month after tax, round that down to $2450 - there’s an extra $50 a month you can put in your savings.
4. The Top Money Saving Tips For Families
Saving money. We all need to do it. Some of us are better at it than others. That being said, everyone has the capacity to save. It’s a great way to become a little more financially secure in the future. Now, there are a number of simple practices you can follow to lower your monthly bills:
- Control your food bills: A well-planned food budget can help you cut costs. Plan your meals and buy food accordingly, alongside making the most of sales. Buy in bulk if possible and keep it in your pantry.
- Plan for vacations: Everyone loves a family vacation. However, they need to be fully factored into your budget. If an overseas vacation is too expensive, consider going away somewhere a little closer to home.
- Consider secondhand goods: Second hand or thrift stores are great places to find deals. Sometimes you can find some really interesting items in there, too.
- Make separate savings accounts for birthdays and holidays: You can make separate savings pots with some banks, which allow you to set a saving goal where you can track your progress. This is a great way to keep the costs of birthdays and holidays such as Christmas down.
- Split your expenses: On average, gay couples earn more than heterosexual couples. That being said, it’s worth dividing your expenses. You could split expenditure 50/50 or you could pay an amount that’s relative to your specific incomes.
As you can tell, budget planning and managing family finances doesn't have to be scary. Rather, they offer an opportunity for you and your partner to come together and create a healthy financial basis for a secure family life.
For more content on family life for gay, bi and trans dads, head to our blog.