Financial Tips for Starting a Family

Starting a family is an exciting time in anyone’s life. As exciting as it may be, raising a family is also expensive, with a 2014 study from the University of Canberra  and AMP stating the cost of raising two children is $812,000 over 18 years for a middle-income family.

Whether an impending new arrival was planned or not, having a financial plan and framework in place is going to be essential. Following these financial tips will help you to to live the life you want while providing for your child now and in later life, while also encouraging you to continue to save for yourself.

Start Saving Early

Whether you save money for your children in your own savings account, wait until your first child is born before opening a savings account in their name, or open an account for them to be held in trust, it is never too early to start saving for your child’s future.
While we all have hopes, aspirations, and plans for our children, it is impossible to know what will happen when they are 18 years old, what they will be interested in, and how they are going to approach life. If you have savings it will allow a degree of flexibility when your children reach adulthood, whether they are preparing to head off to University, are planning to travel and see some of the world, or are looking to move out and start a new job.

Involve Friends and Family in Everything

Close friends and family members will naturally want to be involved with your children. If they offer financial support, you could share the details of the savings account you have set up for your children so friends and family can make payments directly into it. This also means that on special occasions they can pay money straight into the child’s savings account too.
As well as offering direct financial support, family and friends will also offer to buy various products for your child. Use the money this saves you wisely, either to help you pay bills or to save for the future, either for yourself or for your children.

Don’t Be Afraid of Hand Me Downs

Car seats, strollers, and cot beds are all the type of thing you will want to buy brand new for your child. Other things, such as toys and clothes, might only be suitable for your child for a very short time as they grow quickly and their interests change.
It can be frustrating for parents spending money repeatedly on these two things in particular, so look to save money by taking advantage of any offers of hand me downs from those close to you. You might also want to consider shopping for baby clothes on websites like eBay, or finding out if there is a local ‘swap meet’ where you can exchange the things you no longer need for something more useful.
This can save you a small fortune, particularly in the early years of a child’s life.

Consider Your Budget and Lifestyle Changes

Depending on your income and personal circumstances, you may need to make some changes to your budget to cater for having children. Having children means you generally have less disposable income, but even then you may have opportunities to save You should also think about the essential spending you are going to incur when having children, so you can consider this a fixed and regular cost within your personal budget plan.
Don’t assume that certain aspects of your spending will be able to carry on as previously. If you do, you may suddenly find yourself unable to pay bills and other essentials.

Look After Yourself

As well as providing for your children, it is important to have things in place so you can look after yourself, but also provide a safety net for your children for the future.
Some things you can consider are:

• If you are not a homeowner, continue saving towards a deposit for a house. Owning your own home not only provides you with an asset but is also something you can pass onto your children when they are older or when you die.
• Remember to continue your own retirement planning. Having children makes it easy to put planning your own financial future on the backburner, but you should continue to think about planning for your future after retirement

When it comes to your own retirement planning, if you start doing this later in your children’s life you may find you need to save more leaving less available for your children later in life..

Financial Tips for Starting a Family

Considering these financial tips could help you maintain your lifestyle while providing for your children. Plan everything carefully so you can focus on raising your family and not your finances when you need to.


What you need to know

Constancy Wealth Management is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 AFSL 232706 and Australian Credit Licence 232706. This information does not take your circumstances into account, so read the relevant disclosure documents and consider what’s right for you. If you acquire an AMP product or service, AMP companies and/or their representatives will receive fees and other benefits, which will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Ask us for more details.

This post contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information