One thing everyone can agree on is that budgeting money is often stressful. Most parents would agree that budgeting money with children and a family feels even more complicated – but it doesn’t have to be that way. ‘Budgeting’ often strikes fear within many of us, with the primary question being – where do I even begin? Many parents are overwhelmed and spread thin, with little to no spare time, but all you need is a few minutes to keep your finances in tip top shape.
1. Evaluate Your Current Financial Situation
The most important step to beginning your budgeting process is assessing your finances where they’re currently at – not where you think they’ll be and not where you’d like them to be, but exactly what you have at the present moment. How much are you spending on diapers? What about clothing for your little ones? How much is being spent on toys? By giving every dollar a job, you can see how it’s being utilized (for better or for worse), and make better informed decisions from there. It’s really important to remember that you’re not budgeting because of a lack of money, you’re creating a budget to do more with the money you have!
2. Having an Emergency/Rainy Day Fund
The next part of budgeting is something that all parents should be well-versed in – rolling with the punches. Obviously your money and budget aren’t going to be identical month-to-month, as you create new goals, have more children, etc. Don’t feel like once your budget is in place that it’s set in stone. By moving money around as needed, you’re truly budgeting! Just like every day of parenting is different, so are your finances from time to time– adjust accordingly! We love using You Need A Budget’s easy to use spreadsheet where you can track your spending in a clearly laid out format. With a proper Emergency Fund in place, you’ll be able to plan for the unexpected so it doesn’t feel so financially jarring.
3. Track Your Expenses (Both Current and Future)
Another important aspect to taking charge of your finances is to embrace your true expenses. Really take a good, hard look at where your money is going each month, and if it should be better apportioned towards other expenses. If you’re having a baby, for example, you probably can’t anticipate every little incidental that may arise; from baby clothes, to diapers, to doctor’s appointments, and beyond. However, by treating them like monthly expenses in your monthly budget, you can break them down into something far more manageable when they do present themselves. By making sure that your monthly bills are covered (as well as any additional unforeseen expenses), you’ll be able to rest assured and feel a much greater sense of ease monetarily.
Perhaps you’re a new parent, struggling to figure out how you’ll afford everything that a baby needs. Maybe you’re saving for your first house and juggling a few little ones. No matter what stage of parenthood you may be in, it is always important to track your expenses and see how they evolve as your needs change.
Image Credit: You Need A Budget
2021 is the year that many parents want to finally get a handle on their finances and feel empowered to create the life that they want. Be sure to utilize free resources such as YNAB — an award-winning software that makes budgeting and saving a breeze with their simple, yet incredibly effective 4-step method. They also offer free video trainings and live workshops about Budgeting With A Partner, Cutting Spending, and Reaching Your Savings Goals (to name a few), and a simple 4-step method to budgeting with or without kids. Start 2021 right and sign up for a FREE 34-day trial to YNAB here!