Many large families are seeking the answers to raising their children on a budget. The latest report from the Economic Policy Institute puts the average cost of childcare for families in America between $4,822 and $22,631. Considering the rising home prices, living costs and the increased overall cost of raising a family, managing your family’s finances can present a few issues for any large family. More kids are choosing to live at home longer while more seniors are opting to stay with their loved ones after retiring. As a result, families with one or two parent incomes find themselves with a fixed income and a larger household. However, there are proactive steps you can take to help your family master the financial aspect of having a large family.
Make Budgeting Tools Your Best Friend
Never underestimate the importance of a good household budget, particularly in large families. With more people to support, efficient management of your income can make the difference between your family staying on track or falling into the consumer credit and debt trap. If you do happen to have outstanding debt, establishing a budget is the first step to being in control financially.
A good budget is the base of many of your household’s financial decisions including your debt repayment ability. First, you need to establish your budget percentages. Make use of mobile expense tracking apps such as Mint or You Need A Budget. Knowing how much you spend on certain aspects of your household can also spur families into becoming shopping savvy. According to the USDA, a family of 6 should spend between $1,200 and $1,500 per month on food but this can be reduced to $700 to $900 if you shop smart. Shopping and comparison apps such as Shopkick not only help you save money on groceries but also suggests recipes to help with meal planning. They can be shared with other users in the household and offer great suggestions tailored to your spending.
Get Debt Savvy
Based on the latest consumer debt survey by The Nerdwalletand The Federal Reserve, 43.9 percent of households are carrying debt, specifically card debt. On an average, consumers end up paying $1,292 interest on their credit cards annually. In some cases, it can leave consumers struggling to maintain their creditworthiness. According to Crediful.com, your FICO score includes 35 percent of payment history and 30 percent outstanding debts. With the increased household costs of having a larger family, the earlier you are able to get a grip on your debt, the better it will be for your family’s financial future.
By getting financially smart, you can minimize the risk falling behind on your payments and avoid any damage to your credit score. If you do have any credit issues, it is important that you are proactive in getting your credit scores increased. One of the easiest things you can practice is keeping your credit card utilization below 30 percent. The Credit Card Adviser Comparison Tool from Consumer Reports is a handy tool in helping you find lenders with better rates. Many lenders offer zero percent interest or cashback on balance transfers or purchases.With this you will be able to put more towards repaying the actual amount borrowed and save over $100 in interest charges monthly.
Make The Unexpected A Habit
We all know that unplanned expenses can pop up when you least expect it and with more members of your family to account for, that probability goes up. Having a rainy day or contingency fund helps you to be prepared for anything whether it is expenses for the children or the sudden need to replace a household appliance. Fidelity Bank suggests stashing away 5 percent of your budget towards a dedicated contingency fund each month. Consider having a separate account and automating payments each month.
It is also a great idea to secure life and health insurance if you haven’t already. In 2016 ,the average American household spent $4,612 on health care, according to the U.S. Bureau of Labor. That is 8 percent of your household’s spend each year. While this may look like yet another bill; for a minimal sum you can rest assured if your earning ability or health is affected in the future, your family will still be able to be supported.
Being from a large family may automatically bring to mind the image of families struggling financially but that does not have to be the case. Employed with useful tricks and tips, many families are not only finding the ideal financial balance in their growing household but thriving on it. That way, you spend more time enjoying the joy that having a large family brings.
I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!
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