Parenthood is fraught with responsibility. One of the main concerns that you may have as a parent is just how much money you are going to need to take care of your little one. It is estimated that over the course of eighteen years, it may take about quarter of a million dollars to raise a child. This is not even including college tuition. This boils down to a little over a thousand dollars each month. This is by no means a small number. Many parents, particularly young ones, may be worried about just how they are going to balance their budget. Here are a few tactics that may ease your concerns:
As mentioned above, raising a baby is definitely not cheap. In fact, during the first year of their lives, your baby may be at their most expensive. This can be for several reasons – first, you are going to need to stock up on items that you don’t have. This includes cribs, clothes, baby bottles, and other necessities. Also, as your baby will probably grow drastically during this time, he or she will also require frequent changes in clothes, shoes, and many other items.
One of the things you can do is try to find as many items as possible second hand. You can speak to family members and friends who have had children recently. You should be able to get baby furniture and clothing for free or a discounted rate. This will help to reduce some of the costs that you have to incur.
Making a Budget and Sticking to It
One of the first things you are going to need to do is to sit down and make a list of everything that your baby or child needs each month. It doesn’t matter how insignificant the item may seem, make sure to note it down. This should be done along with how much each item is going to cost. Prior to doing this, it is a good idea to see just how much of these things that your little one goes through each day or week. This will help to determine how much of these you are going to need.
You will also have to factor in rent, utilities, groceries, and transportation. These are considered to be essentials that you simply cannot live without. Once you have added up all of these costs together, you now know just how much you require each month.
Unfortunately, creating the budget is the easy part – sticking to it ends up being a lot more difficult. However, if you are not earning a lot of money, it is vital that you do not stray from your budget. To prevent you from cheating, avoid impulse purchases or buying items that you do not need. You should also limit how much you eat out.
Staying Away from Credit Card Debt
The best way to avoid credit card debt is to use your credit card as sparingly as possible. You should typically reserve it for emergency purposes. However, when you do use your credit card, it is important to know if you can pay back what you owe. This is when your budget comes into play. If you are buying something that is not a part of the essential items list, it is important to have the necessary funds. Once you have deducted the necessary expenses from your income, you may find that you have a small portion of money left over. It is a good idea to never buy anything with your credit that you cannot cover with this money. Read more here.
Another habit that you should form is to pay off your credit card bill as soon as you receive it. Late payments, even if they are only marginally late, tend to count against you. To avoid any of the negative consequences of this, it is vital that you pay it as soon as possible.
Avoiding Excessive Debt
Sometimes, you are simply unable to avoid debt. You may find yourself owing money to other companies or people. This tends to be quite inevitable. Nonetheless, you should always keep a close eye on this debt. Make sure to stop accruing additional debt once you know that you already owe a certain amount of money to others. This can mean cutting back on your spending or finding another source of income. You should also try to pay off the debt every time that you have a little bit of extra money in your hand. Another thing to watch out for is interest rates that you may be accumulating on your debt. By paying off your debt soon, you avoid getting into even more trouble.
These are just a few ways that young parents can manage their finances. It may be quite difficult at times but it is certainly not impossible.