The Financial Challenges of Growing Your Family

Deciding to add another member to your family is a big step. Not only will you need to consider the emotional toll this will take, you will need to sit down and really think about what this will mean for your finances. This is a long term commitment that will require long term spending so it is important to set a budget carefully and determine your needs before you grow your family.

Evaluating your Finances

There are basic expenses you can expect to grow once you have a new baby in the house. They will need to be added to your insurance policies, the amount of groceries you need to buy each week will expand, the amount for after school activities for children will go up and many more costs will arise along the way. A financial planner can give you an idea of how much your basic expenses will rise or you can think back to the last child you had to help you set a budget so you are not caught off-guard with extra spending.

Spending does not slow down as your child grows. When you eliminate the cost of diapers and toys you gain the cost of school activities and an increased appetite. You will need to decide how you are going to handle these costs. Are you going to take them all on or will you expect your child to earn their spending money with a job once they are old enough? Having a plan in place before you grow your family will help you avoid having to say no when your child wants something later.

Having children requires you to have a strong long-term savings. You will need to consider factors such as sending your child to college or buying them a car when you set up your savings plan. Talk to a financial planner about how much these expenses are expected to cost in a couple decades when you will be footing the bills so you can get a better idea of what you need to start putting aside in order to make sure you have them covered.

Setting aside money for the future means less spending now. Take a close look at your budget, including the expenses you expect with a new baby and decide just how much you can afford to put away without having to worry. You may have to go without luxuries but you should never set up a budget that does not have enough funds for emergencies. Whether it is a leaky roof or a late night run to the doctor because someone has an ear infection extra expenses will come up and you will need to be ready.

If you plan on adding several new members to your family as time goes on, you may need to make adjustments to your living situation. A small apartment or two bedroom house may not be enough space for a family with three or four children. Take a look at your current living situation and picture where each child would sleep, play, visit with friends or do their homework so you can get a clear idea of whether or not you might need to move to accommodate these needs.

The financial challenges of growing your family can be a heavy burden. However, if you plan carefully and take these issues into account beforehand you will have much less to worry about. Understanding your financial limitations will help you stay on track so you can provide for your family adequately.

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