When you have kids, you start to question every purchase, and all of a sudden, budgeting becomes more important than ever.
Even for a minimalist parent like myself who doesn’t buy a lot of toys or gadgets, there are still other expenses like formula and healthcare that required us to spend thousands of dollars this year that we never would have spent otherwise.
Here are a few more ways that having kids will change your finances:
1. You Become More Aware
When you have kids, everything you spend for yourself requires more thought. I always ask myself if there’s something more important I could put the money towards. If I want to get my nails done, I always think the money could be better spent on formula or wipes. If I want to go to a movie with my husband, I have to ask myself if it’s better to say in due to the high cost.
Basically, having kids changes your entire level of awareness. Suddenly your world becomes focused on your little ones and ensuring they have everything they need to be happy and healthy.
2. You Need a Bigger Emergency Fund
One thing I really want to work on next year is increasing the amount in my emergency fund. This year, we made it through the whole year without having to dip into our $2,000 fund (fingers crossed) but with kids, that number absolutely has to increase. We need to be able to account for income loss in an emergency. Ideally, we need to grow this fund to $10,000-$15,000 in liquidable funds. I’m not sure if we can accomplish this in one year, but I want to make some headway on it. Through tracking our expenses and budgeting, we should be able to add a few thousand dollars in there next year all while meeting our other goals.
3. You Start To Think More About Insurance
Becoming a parent means getting all of your ducks in a row with important things like life insurance and health insurance. No longer can you “wing it” and hope for the best. Once you’re a parent, you have a responsibility to your child to ensure everything is taken care of should something happen to you. If you haven’t purchased life insurance yet, now is the time. Typically, it does not cost too much every month for basic coverage, and should the unthinkable happen, at least you know that you’ve provided for your children long after you’re gone.
Ultimately, having kids changes your life in so many ways from not being able to sleep in to having to having fun watching your kids grow. There are so many pros and cons to being parents but in my opinion, changing up your finances is actually a good thing. I have never been more focused or organized in terms of my money, and I have my kids to thank for that.
If you’re a parent, how have your finances changed since having kids?- Catherine Alford