Take the Stress Out of Financial Planning with These Tips for Young Parents
Being a first-time parent can be stressful at first, and along with caring for your new little one and adjusting to life with a baby, you may be worried about your finances. Don’t let money stress you out; instead, create a financial plan that’s easy to follow. This will help bring you peace of mind knowing you’re making smart decisions for your family and for the future. This is a helpful post from Sara Bailey from https://www.thewidow.net
Tips for Getting Started
The first step in successful financial planning is to have a clear picture of your finances. Before you had a baby, you may not have been tracking your expenses very carefully, so start now. For a month, track every expense and see exactly how much you’re spending on your mortgage, vehicle payments, and groceries. Look at how much you’re spending on eating out and entertainment and see if you can reduce your spending in any of these areas.
After you know how much you’re spending on your expenses, make a monthly budget. Don’t overspend in any one category, and ensure that you’re putting as much money into savings as you can. Capital One recommends saving at least 20 percent of your monthly income.
Find Ways to Save at Home
Are your utility bills much higher than you’d like? There are a few environmentally friendly changes you can make to your home that will save you money each month, and help you meet your savings goals. Start withwater conservation; for example, always turn off the tap when you’re brushing your teeth and install a new shower head that uses less water. Also, check your dishwasher and researchwater-saving appliancesto save you money.
Another way to save money is to improve theenergy efficiencyof your home by insulating the attic, sealing windows, and installingstorm windowsto trap heat inside the house. Make sure your home heating system is as environmentally friendly and cost-effective as possible, and watch as your home costs are further reduced.
Saving for College
Once you’re following a great budget and putting money into savings each month, you need to decide where these savings are going. You want your child to have a great life, and you want them to enjoy music lessons, play sports, and follow their passions. So, start saving for daycare, extra curricular activities, andcollegeas soon as possible, and give them a head start on their education. You don’t have to pay for their entire tuition, and they can take out some student loans, but save as much as possible to help them pay for their education.
Saving for Retirement
Young parents often forget about their retirement when they make financial plans. You’re focused on giving your new baby the best possible life, but if you put all your savings into the college fund, you may be setting them up for failure. If you haven’t been saving for retirement, you may become a financial burden on your children when you stop working. You want to retire early and spend your golden years playing with your grand kids, so startsaving for retirement.
Parents experience a lot of changes after the birth of their first child, and it can take several months to adjust to their new life as parents. Making a great financial plan will prepare you for both the present and the future, so start by tracking expenses, making a budget, and finding ways to save on spending and home expenses. Then, determine how much you can save and start a college and retirement fund to take the stress out of financial planning.