Starting a Family? Here Are Some Financial Considerations

Family

Most people will want to start a family at some point in their lives, but very few people understand the financial implications that it comes with. Raising a family comes with a lot of joy, but also a lot of stress because of how demanding it is. Not only does it come with a lot of responsibility, you also need to be financially stable so that you can provide for your children and partner. Before you officially start a family, here are a few things to keep in consideration.

Stable Income

One of the most basic things you need to start a family is a stable income. This could be from a business that you’ve started or even a regular job. Whatever your source of income, it needs to be stable for you to get a steady stream of money to provide for your family.

In most cases, a job at a well-known and profitable company is perhaps the best way to achieve this. Job security is important, and you need to be comfortable knowing that you’re not going to suddenly lose your job to a random accident or disgruntled co-worker. Make sure you’ve got a good professional relationship with the rest of your company, and take safety measures to ensure you’ll have a job for a long time.

Alternatively, you could also have a business of your own. This is a lot less stable than having a job with an employer, but the potential for growth is massive and it can also be handled at home because you’re the boss. Although self-employment is difficult, once you’ve gained your bearings and you’ve got a few employees under your wing, it becomes easier to manage alongside the stress of providing for a family.

Buying a Home

If you’re going to start a family, you need to have a home. Although renting is an option, it’s a good idea to try and purchase a home as soon as possible because it’s less stress, there’s less chance that your tenancy agreement will expire and force you to move, and you’ll also have a home to pass down to your children when they grow older.

The first major financial hurdle to overcome is saving for a deposit. This is arguably the hardest part of purchasing a home because it’s a large sum of money that has to be saved up in one large chunk. Once you pass this hurdle, you also have to think about making regular payments towards your mortgage or lender of choice. This is usually easy if you have a stable job, but depending on how much interest you need to repay and your salary, you might find yourself giving up hobbies and comforts in order to pay it off.

Credit History

Before you even consider buying a home, you need to think about your credit history. One of the most important things to keep in mind is paying bills as soon as possible. If you’re constantly late on certain payments, then you’re going to put a dent in your credit rating and it will become an incredibly tall mountain to climb when you want to build it up.

Your ability to borrow money for a deposit, mortgage or even your child’s college fund will be decided on your credit rating. Make sure you pay off debts as soon as possible and never take out a loan you can’t afford.

Providing for Your Family

If you have a family, then you’ll also need to provide for them. Be it funds to pay for college or money to buy the groceries, you can’t just consider yourself anymore. Whenever you buy ingredients for a meal, you’ll have to multiply it by the number of people you live with. If you need to pay for a child’s college fund, then multiply that if you have more children.

With so many considerations, you can easily get lost in the sea of payments and expenses involved with raising a family. If possible, plan how many children you would like so that you have a rough estimate of how much money you’ll need to save up and spend on your children. It goes without saying that the cost of raising a single child is high enough, so raising multiple kids would cost even more money. There are plenty of benefits to help you out, but they won’t cover everything—you and your partner will be expected to chip in!

Balancing Life and Work

In order to provide for your family, you’ll have to strike the perfect balance between life and work. Taking extra hours at work to get a little extra money on your next paycheck isn’t going to work anymore. Likewise, don’t expect to have much time for your friends if you’re raising a child. Your kids are going to demand a lot of attention if you want to raise them correctly, so don’t neglect them and think you’ll still be able to party every Friday night with your colleagues.

To Work or Not to Work

One of the most effective ways to balance life and work is to consider the option of not working at all. Without a job, you’ll have less income and you’ll lose certain employee benefits like healthcare and a pension. You’ll also feel more dependent on third party services and less self-sufficient, which can make some people feel stressed or frustrated. However, what you gain is a lot of financial help to pay for your children’s care costs. You won’t spend nearly as much money on travel costs to work, you’ll have less stress from your workplace, and you can spend more time with your family.

In comparison, working means that you’ll have to pay for child care if you or your partner can’t provide it, and you’ll use a lot of money on improving your work conditions and travelling to work. However, you gain a lot more money to spend on raising your family, but the time you can actually spend with them is lowered drastically.

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