Money should be the least of your concerns when you are in labour. Starting a family is a major step in anyone’s life and an exciting time to boot. As exciting as it may be, it is easy to miss the fact that raising a family is also expensive. With more mouths to feed and new priorities, it is clear your money will need to be distributed differently.
In today’s world, financial challenges, an uncertain economy, high unemployment, less job stability and more, add a level of complexity to the aspect of starting a family. This makes it important for you to create your own safety net by preparing for parenthood now, whether you intend to tow the family line soon or not.
It’s wise to consider planning financially before you start a family; the high cost of living, especially in big cities can cause great trouble for couples especially the new ones.
According to population polls, middle-income parents spend over N1.4 Million yearly catering to family needs, but don’t let that scare you. Starting a family can actually be fun if you know what you’re doing.
The most important thing to understand is that your priorities and your spending habits are going to change, and acknowledging this fact, so you don’t face any financial problems after starting your family.
Whether an impending new arrival was planned or not, plan ahead; we have some tips for you when you want to start your family:
Start Saving Early
While we all have hopes, aspirations, and plans for our children, it is impossible to know what will happen when they finally arrive, what they will be interested in, and how they are going to approach life as they grow.
A savings plan will allow you have a degree of flexibility when your child reaches adulthood; whether they are preparing for University, are planning to travel to see the world, moving out or getting a job.
When you save money for your children in your own savings account, you have the options to wait until your first child is born before opening a savings account in their name, or open an account for them which will be held in trust; it is never too early or well, or late, to start saving for your child’s future.
Raising kids are way more expensive than people think; next to buying or renting a bigger house, paying for their education, giving them the right diet, proper clothing, getting them toys, etc, children’s’ upkeep is a continuous ongoing expense for parents.
Just because your little one hasn’t arrived yet doesn’t mean you shouldn’t prepare for the spen, start stockpiling items and buy products in bulk to avoid the extra charges on unit costs then re-use or recycle durable items, this will save you cost with your next child.
Budget your expenses
Depending on your income and personal circumstances, you may need to make some changes to your budget to cater for the kids. With new expenses coming your way, it is essential to have control over your money by budgeting. With a budget you will be able to track your cash inflows, outflows and understand how quickly you spend your money and on what items.
Write down what you spend periodically, so you can get a good grasp of your spending habits; once you’ve got your numbers down, you need to look for places to cut off, in order to stay in control of your finances and be able to pay essential bills.
Save money to invest
As we discussed in the previous step, budgeting will let you know exactly where the money goes and knowing how much money you spend on different things is not enough.
If you want to avoid any emergency financial problems when you’re about to start a family, after reducing your living expenses and saving your money, you should invest. Find ways no matter how hard it seems, to increase your income and invest for you and your family’s future.
The idea of getting to a point where you could save and invest money may seem like a fairytale, when you’re barely able to get by with the kids, but it is a prudent venture that can ensure you have more to spend, especially for emergencies which always happens with children.
If you really can’t find places to save in your budget or have an investment, try picking up some extra cash using your time and talents to earn more income; this is called “having multiple streams of income”.
Have a Retirement Savings Plan
A big part of starting a family is providing the security your child needs, not only when they’re young, but for the rest of their life; which means being able to support yourself in retirement.
In order to be financially prepared for when you retire, you need to start saving your money right now! The pension scheme in Nigeria is quite open to enable you save more and earn more with the Voluntary Contributions and Multi-Fund structure; basic access to these funds are at disengagement, retirement, in-ability to work based medical reasons or death of the account holder.
Get Insurance Cover
The next important step is to think about your insurance. Bills are something to worry over, most especially those incurred from unforeseen eventualities/emergencies/accidents and here you are, about to start a family – it’s an automatic multiplier of the worries.
So when unexpected events happen, you have to be prepared for your family’s financial needs. Save yourself from the headaches of paying for these emergencies on the spot!
Consider health insurance (we know children need constant medical care) car insurance, life insurance, travel insurance (when you want to take a vacation or an official trip) and even home insurance. The universe of insurance policies may be vast, but tailored solutions can be found fairly easily online.
Now, you’re ready to start your family. While there are other aspects to parenthood and starting a family, these tips will help you sort through the challenge of financials, ensuring you and your family get to scale over the hurdles.
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