Some people think that handling their finances is hard enough when they’re on their own – only to realize that things can be even more complicated when you have an entire family around you. But these complications can often be addressed in some systematic ways, minimizing their impact and ensuring that the whole family is on the same page with regards to everything that happens to its money.
And this is important if you want to avoid some common financial disasters that occur in these environments. Some families feel like they’re struggling when in reality they’re just around the corner from a much better situation, and it often comes down to utilizing their available resources correctly.
The Main Differences
The most obvious thing that will change is the number of people involved in each calculation. Don’t make the mistake of calculating your kids as “half a person” each in terms of expenses, or something along those lines. This might work in the first couple of years of their lives, but things will quickly spiral in the opposite direction afterwards. In some ways, kids can be more expensive than full-grown adults, so don’t underestimate them in your budget.
You’ll also need to consolidate multiple income streams in some cases, and align your bills and other regular payments to them. You and your spouse will probably not get paid on the exact same date, and you’ll need to account for that when paying the rent, utilities and so on. Your kids might also have recurring monthly expenses (like classes) that will have to be included in the budget too.
Shifting Your Priorities
When living alone, your financial priorities are focused entirely on you. You spend money to improve your life, you save for a better future for yourself, and so on. And when you’re building a family, this obviously needs to change. Your kids will now be the most important factor in your finances, and you’ll have to align everything you’re doing around that.
This might require the occasional sacrifice, such as postponing a big purchase you were looking forward to. But that’s part of being an adult, and there’s no going around that aspect of your life as a grownup. On the bright side, you’ll have a wider range of options to pick from when the time does come for that big purchase, as you’ll have the assistance of your spouse in most cases. Plus, some of the smaller things you want might occasionally make their way to you as gifts from a thoughtful child!
Do You Need a Better Job?
A career upgrade/change is often one of the first things that come to the minds of people who find themselves in a family situation without having planned for it in advance. But it’s often not necessary to go that far at first, at least if you’re careful with how you utilize your current resources. Take a careful look at what you have available, and figure out if you can reduce any recurring expenses in order to shift finances to another aspect of your budget.
In many cases, you don’t have to make such a drastic change to your life and you’ll still be able to handle all the responsibilities of taking care of a family without any issues. It just comes down to knowing how to manage your available finances properly.
Dealing with Emergencies
No matter how well you might plan in advance, some things can never be accounted for. There are various types of emergencies that you simply can’t plan ahead for, and you have to take those punches as they come. Medical bills, major repairs, accidents – these things can all be quite costly if they come on short notice.
There are usually ways out of those situations if you know your options though. A loan is a classic solution to such problems, and if the expenses you’ve incurred aren’t that major, this is often the preferred choice. However, you might not have access to the best loan deals on the market if your credit score is too low. When you’re in a family, it becomes much more important to maintain your score on a good level, and to check your credit report regularly. You don’t want to come across any nasty surprises in a critical moment when you’re taking out an important loan.
In the end though, this is all manageable if you put your mind to it. After all, people have been having families and doing just fine for as long as humanity has existed. Sure, our focus has shifted a bit in recent years, but the point still stands. As long as you know where your priorities are, and remember why you’re doing this in the first place, you should eventually get quite good at handling the finances of an entire family.