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Having a baby is probably one of the most exciting milestones in anyone’s life, but without planning and managing the budget on a regular basis, you could end up in a financial outlay.
NerdWallet, a US-based financial comparison site, estimated that the cost of raising one child up to 18 years would be around AED954,850 for food, housing, clothing, transportation, healthcare and health insurance.
Knowing how much you can spend on what each month will help you in managing your overall finances as a mom. We’ve gathered some tips on how to avoid overspending as a mommy:
Find your own network of mommies
Almost each one of us has a relative, friend or colleague with parenting experience; use that for your own advantage. Don’t be too shy to ask them to share their experience, this will help you better with your overall planning and you’ll also find yourself learning from their mistakes along the way. If you can’t find the right person in your surroundings, you can always check around on different online platforms. And don’t forget, once you become the one with the experience, share that with others as well.
Create a budget
To be able to ace the budget and the planning, you need to have a full understanding of the incoming as well as the outcoming money. This needs to be reviewed regularly as your budget might vary from one month to another. Also, it’s the right time to start understanding what you need to cut costs on to balance the budget.
Don’t overspend
It’s very easy to get carried on with things, especially for your first newborn. Just remember, your baby shouldn’t be a fashion icon. It’s no news that babies grow really fast, hence what they wear this week might not be fitting them the next. Don’t waste your money on clothes they won’t end up wearing (more than once). Another important thing to keep in mind is overspending on rent. Your baby probably won’t be needing their own room for at least six months so there’s no need to move to a bigger place very early.
Understand your savings goals
Becoming a parent changes every aspect of your life, and especially your saving account. It’s time to understand what exactly you are saving for and start working towards those different goals. It could be saving for your children’s education, a new car-seat, or your next summer vacation. Either way, finding the right saving accounts for your goals at an early stage will definitely make your life easier. Liv has the ‘Goal Account’ feature which allows you to open as many saving accounts as you want for whatever purpose you want.
Build a rainy-day fund
When you create your budget and get the hang of how to balance it, it’s time to start building a fund for the future. This could be used for emergencies and unexpected incidents. As mentioned earlier, our ‘Goal Account’ feature does not only allow you to open several saving accounts, you can actually set your own rules, i.e. how much to save, how often etc. Another important factor to keep in mind is teaching your children about money and the importance of savings from an early age. Give them a place to store their pocket money and show them an exciting/ fun way of measuring their savings. It’s only as fun as you make it for them!
