Whether it’s your first or your fifth child, being a young mom can be challenging to say the least. You have to deal with the constant care of another human being, trying to make ends meet, and still find time to spend with your friends and family.
But it doesn’t have to be this way. Whether you’re just starting your family or you have kids for years now, it’s important to keep track of all of your expenses and plans. That way, you can stay financially stable and give your kids the best care possible. If you need help keeping track of your spending and planning ahead, here are some tips for managing your money as a young mom:
Review Your Finances
Don’t have a firm grip on your current financial situation? Make time to review your income, expenditures, debts, and assets. If you don’t know where your money is going or how much you’ve saved are, it can be challenging to manage or save for later. Aim to develop a realistic budget that encompasses all of your expenses (like rent, utilities, and food), allows room for saving or investing, and still leaves room for personal spending. There are many online tools that make it easy to track all of these things online.
Fix Remaining Debt
Debt is one of those things that seems like it will never end, but once you set aside time each month to pay it off, you’ll be surprised how quickly you see results. Instead of paying only minimum payments every month (or spending money on something else), use your minimum payment to chip away at your highest interest debt.
You can consider getting a bankruptcy attorney, which can help you with your remaining debt and help you to achieve debt relief. Once you have achieved financial freedom, you will achieve financial peace of mind. It is something that many families want but never achieve due to constant debt repayments.
Track Your Spending
You need to establish healthy spending habits. Track your monthly expenses in Excel or another spreadsheet, using categories like groceries and entertainment. It might take you several months to learn how your spending patterns shift over time, but once you do, you’ll better equip yourself to create an effective budget that works for you.
Consider Your Insurance Needs
When it comes to personal finance, having enough insurance coverage is vital. While your employer can offer health insurance, there are additional options that young moms might want to consider. Life insurance can protect your income stream and your family’s financial future should something happen to you.
Long-term disability coverage can ensure that you can maintain your family’s standard of living if you are ever unable to work again due to an illness or injury. Disability insurance can help mitigate some of those risks. Personal umbrella policies are great for covering liabilities for losses above what is included in your homeowner’s or renter’s policy. If you have dependents, make sure to check with your life insurer about buying additional term life insurance.
Evaluate Where You Are Spending Money
If you’re struggling financially, it can be because you don’t know where your money is going. Take an hour to look at your bank statement or credit card statement for one month. Or if that seems like too much, track every dollar you spend for just one week. Try it on paper, draw circles around each expense, and note what was purchased.
You might be surprised by what you learn. You might also see some areas for improvement. Many people overlook these common spending categories:
- Dining out
- Impulse purchases
- Gifts (for friends and family)
- New clothes or shoes
- Entertainment or going out with friends
- Subscriptions to services like Netflix or Amazon Prime Video
It can be easy to find areas of savings simply by paying attention!
Get Creative in Saving Money
Moms often find themselves with little spare cash, but that doesn’t mean it has to stay that way. Get imaginative in your saving strategies. Talk about some of your favorite money-saving tips. Whether it’s using coupons at local restaurants or downloading free apps on your phone to help you save, there are plenty of ways for moms on a budget to get creative with their savings. And don’t forget to ask other parents how they have saved—you might be surprised by what your fellow moms have come up with!
Becoming financially independent is no easy task, but it doesn’t have to be stressful. As long as you know where your money goes each month, budgeting becomes much more manageable. Follow the steps above to get started. But do remember that there’s no one-size-fits-all approach.
