Home Budgeting Tips for Budgeting for Children

Tips for Budgeting for Children

by James McGregor

If you are planning on having children, then you will need to be aware of how much this will cost you. There will be different costs at different times and you will need to be prepared. For example, you will need to buy things for a child, not only food, toiletries and clothing, but a car seat, cot, pram and toys when they are young and as they get older, books, computers and phones. One parent may work less, perhaps give up a job or work part time to care for the child or childcare will have to be paid for.  Then you may need to consider paying or a car, university or deposit on a home! There are many costs and so before you have them it is good idea to start planning. 

Clear Debts

It can be wise to start by concentrating on clearing some debt, if you have any. A mortgage, is a cheap type of debt and it is likely, if you have one, you will owe a lot of money and so this might be best ignored. However, other types of debts such as loans, overdrafts and credit cards, can be very costly and it can be worth trying to get rid of these. The amount of interest that you pay on loans like this can be significantly higher than what you will receive in interest on savings and so you could use savings to pay them off. You could also just pay off a little each month until they are gone. See whether there are any places that you can cut back your spending or any ways that you can earn a bit more, so that you can clear those debts. If you start with repaying the most expensive, then you loan costs will go down more quickly and you will have more available money to repay more and more from the debts. 

Put Some Money Away Regularly

Once you have repaid your debts, it can be a good idea to start putting some money in a savings account on a regular basis. Even small amount can be handy. This means that you will have some money to fall back on if you have an emergency. This could be anything from needing to buy some new clothing for your child to replacing a broken fridge. It is also reassuring to know that you have that money available if you need it. It is like having some insurance there, which can help you out when you need it. Just make sure that you do use it only in an emergency and that you replace it if you do spend it and then you will always have it there. If you do not need it, then it will not be wasted as you can keep it for your retirement or any emergency that comes later and hopefully it will be making some interest for you too.

Note Down Costs

It can be worth thinking about the costs of having children and noting them down. This will help you to be able to manage them well as you will be prepared. You will find when they are babies there will be lots of costs such as clothes, when they grow very quickly and you will need to upgrade from a Moses basket to cot and cot to bed and change car seats as they grow as well. As they get older things will get dearer too, they will eat more and their clothes will be bigger and more expensive but they may not need so many other things until they start needing a phone or a computer or both. Considering what you might need and when can help you in your budgeting. 

Note Down Earnings

It can also be wise to make a note of how much you will be earning. Consider that when the child is a baby, they will need care and so one parent may stay home to look after them either full or part time. Once they start school, there is less need for childcare during school hours and some schools have before and after school clubs to allow parents to work full-time and these tend to be cheaper than paying a child minder. School holidays will still need to be sorted out though. It might also be the case that parents would like to be around for their children as much as they can be. However, if one parent has taken a complete break from work, they may find that they will not be able to easily get back to work and may not be able to be paid as much as they were before. This is why some parents both choose to work part-time and share the child care and then they will often be able to stay in their jobs and then increase their hours when they can. There may also be opportunities to work while at home with the children, which could be worth investigating. 

Consider Saving for the Children

Some people like to put money by for their children. They might start a trust fund or other child saving account. You cannot do this until the child is born though but it is worth considering and investigating. This is because you will find that the child accounts often pay a lot more interest. This means that you will be able to make it much more worthwhile saving and they will benefit in the future from the interest. A trust fund will not pay out until the child is eighteen though and so this means that it could be worth having other accounts as well, in case they need to have some money when they are a bit younger. For example, if they want to learn to drive when they are seventeen, they will need money for that. It is something that you will need to think about and possibly talk to them about as they get older as well. It can be good to get them an account to pay in their pocket money or birthday money so they can learn about saving. 

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1 comment

Justine March 7, 2022 - 6:39 pm

Me and my husband have been putting away £5 a week for our 10 year old. We show her the bank deposit every month so she understands saving up. We just transfer it online and let her see the balance going up. It helps her budget as she knows she can only spend money once.


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