Raising a family, little or large, is no mean feat – especially when it comes to finances. From birth to university there are budgets to be made and costs to be met for parents and kids alike. But fear not! It’s a decades-long process and you’ve plenty of time to plan (or catch up, for that matter). Natwest’s family calculator estimates that from the ages of 0-17, in today’s UK, it will cost around £192,000 to rear a child.
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That’s an intimidating figure without a doubt, but it becomes much more manageable when broken down into smaller chunks. Year by year, month by month, daily budget by daily budget. Here are five of our top tips on how to help you begin to save for your family’s future:
1. Budgeting
And lo, budgeting is prime first on our list. Budgeting with a capital B. You’ve got to plan your expenses right from the off when it comes to being a parent; prioritise where necessary, cut when needed. For example, formula and rash cream for a newborn over your gardening magazine subscription, a school uniform for your ten-year-old over a new console. That kind of thing.
That’s not to say that there can’t be indulgences in your budget - ways to relax, ways to wind down and treat yourself. In fact, those things are close to vital when it comes to staying sane. Rather, those indulgences are planned for and come second to practicalities.
2. Rent vs. mortgage
Something else to consider before settling down with kids, or even partway through the process, is your home. When you pay rent, you put a roof over your family’s head, but that money could be going further. If you’re financially secure and able to consider buying a home, think about putting rent funds towards a mortgage instead. Real estate never goes out of fashion, for you or your kids. And one day, with time, the roof you’re paying off over everybody’s heads could be theirs.
3. Investments
So you’ve got the budget sorted. You’ve potentially got a mortgage on the go. Chances are, every penny’s precious. Still, maybe you’ve got some savings tucked away for a rainy day, or maybe saving a little bit every month is part of the budget in the first place. Great job! But those savings could be doing a whole lot more than earning 1% interest in an ISA account far away. Cue investment. Needless to say that investing is a daunting prospect, especially if it's your first foray into the industry, but it’s well worth your time. We promise. If raising a child takes 17 years, then returns will begin to add up.
So do your research and check if it's still worthwhile to invest in Bitcoin, on stocks and bonds. Get a financial advisor involved if you think it’s worth it. That savings money could contribute to a university fund for your children one day, could go towards a family holiday, could go anywhere. Be forward thinking. Be proactive.
4. Patience
All that being said, sometimes you might just need a little patience. Those investments and savings you may have made will have to buckle from time to time. You might face an unexpected cost, a redundancy, a spate of bad luck. At the end of the day, your number one job as a parent is to keep your kids happy, fed and watered, and that will always come first. So be kind to yourself. Don’t be put down when you miss a savings goal. Don’t be discouraged when an investment goes wrong, or a particular Christmas is a little tight. Be kind to yourself. Nobody ever said parenting was easy, and nobody ever said financial acumen or future proof planning was, either.
5. Priorities
Money may make the world go around, and it may fund your kid’s childhoods, but the same can be said for good old fashioned love. Working hard for your family, earning money, being smart, being thrifty – it’s all well and good, but there has to be a balance. Remember to spend time with your kids as well as at the proverbial office. Remember to indulge where you can, to go on trips, be they to the summer fair or Barbados in the summer hols. It doesn’t really matter. Just make memories.
Your kids will thank you for help with rent. Your kids will thank you for the latest trainers, or for a new work laptop. But they’ll also thank you for a hug, for a hot choc before bed, for a chat over the phone. Parenting is complicated, and money is just one part of the ever-evolving, ever-changing deal.
It all sounds easier said than done, huh? But so is everything worthwhile. All you can do is begin.
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