When you’re a stay at home parent, taking control of your finances can be
difficult. While being a full-time stay at home parent is a job in itself,
unfortunately, it doesn’t come with an attractive salary to match. Without a
regular income, you may find yourself struggling to make ends meet each month,
even if your significant other is still working. To help you get on the right track,
here are a few money rules that every stay at home parent should follow.
Work out the costs
Before you become a stay at home parent, you might not take the time to really
think about the toll this is going to take on your finances. Whether you’re
preparing for a new arrival or you’re already a few months into being a full-time
parent, it’s important to sit down and work out a proper financial plan.
Think about the total sum of money that you’ll have left to live off each month,
and then create a realistic budget that outlines all of your regular outgoings.
Make sure you’re as thorough as possible with your outgoings, taking into
account things like bills along with smaller costs like the occasional shopping trip
or meal out.
The 50/30/20 rule is useful for budgeting, which splits your overall monthly income into three spending categories — your needs, wants, and savings. As you can probably guess, fifty percent of your income should go towards your needs, which means necessary payments like your housing costs and food shopping. Thirty percent then goes towards your wants, which is anything you or your partner feel like treating yourself to, and then the twenty percent you’re left with should go into your savings.
By tracking your spending and working out how much you should be left with,
you won’t face any nasty surprises at the end of the month and will feel generally
more in control of your finances.
Have an emergency fund
You never know what’s going to happen in life. You could be comfortable living
off your significant other’s salary until they unexpectedly lose their job, leaving you with nothing. Having an emergency fund is important for anybody, but it’s particularly vital if you’re a stay at home parent. This way, if you face a sticky situation where your income is in question, you still have an emergency sum of money to fall back on.
Save as much as you can into this account until you’re left with an attractive sum of money which could ideally cover your payments and expenses for at least a couple of months. This could mean you need to cut costs in order to have some money left to save, or you could even try investing. Investing your money, particularly with property investment, is a good way to generate some extra money and significantly boost your finances.
If you have money available to do so, purchasing a buy to let investment property
can generate some extra income each month which you can put towards an emergency savings account. Making the right investment also means that the value of your property could grow by the time you sell it, creating attractive returns through capital growth. Just make sure you choose a trusted company like RW Invest and research the areas with the strongest property markets to guarantee the best chance of success.
Consider making money on the side
Being a full-time parent can certainly be demanding and take up a lot of your
time. If you get the chance, however, it’s worth looking into ways you could make some money on the side. Lots of part-time or freelance jobs can be done from the comfort of your home, and are flexible enough for you to fit around your day-to-day tasks. Popular ‘side hustles’ for stay at home parents include running a blog, being a freelance writer or designer, or even running your own childcare services where you look after other people’s kids.