The Finance of Growing Your Family
America Saves Week Infographic Series: The Science of Saving, Part 3
We’re nearing the end of America Saves Week and finishing off our Science of Saving infographic series with a look at how you need to save strategically if you want to support a growing family. There’s a certain art to the finance of going from a single-person household to having a spouse and kids. What works in money management when you’re on your own may not necessarily apply when you bring other people into the mix.
If you want to avoid financial disaster and provide a stable environment for your family, then you need to plan ahead. Making sure you have enough money at every stage of your family’s growth will help ensure you can meet the challenges that lie ahead. So how much money does it take to go from the single life to running a successful household?
The finance of going from one to two
When you get out on your own, you build your own financial habits and set your own course. Good or bad, the choices you make usually only impact you. On the other hand, when get into a serious relationship you have a whole extra person who could be impacted by your bad financial choices.
With money matters being the leading cause of the 50 percent divorce rate in the U.S., being financially prepared for your partnership can go a long way in promoting wedded bliss. Often, financial problems start with the wedding, because a couple focuses too much on making the day special without thinking about that first month of marriage when all your bills will come due.
Make sure to take time to talk about money before you tie the knot ? and even before you get into planning your wedding. You might decide together that you can be happy with a smaller ceremony to avoid conflicts once you’ve walked down the aisle. If you decide that the ceremony matters, then you should give yourself time to save up, so you aren’t footing the bill with your credit cards.
Managing money with extra mouths to feed
Another big financial hurdle will come with each kid you add into the mix. From the big bills you can face just getting your kids delivered safely to the quarter of a million dollar price tag on raising each child, raising a family is expensive.
The mistake most couples make is not doing enough to get their finances ready for children. You don’t adjust your budget to account for diapers and other newborn needs. You don’t start planning early enough for college tuition. This lack of planning can lead to household stress, family conflicts, and serious problems with debt.
If you’re planning on raising children, you should set a financial goal for saving ? just like you would if you want to put a down payment on a house. Start setting money aside as early as possible and do your research to see how much things will cost. Once kids are in the picture, also make sure you introduce them to finance early so you can avoid the debt problems that a “buy me, buy me” mentality can cause.
For more information on keeping your wedding affordable, Consolidated Credit offers a free guide to the finance of Planning Your Wedding. We also offer a guide for Talking to Your Kids about Money and introducing Budgeting for Kids.
Use this infographic