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How to manage finances with a young family

Finding the money to cope with a young family with newborns, babies, toddlers, and pre-schoolers is sometimes difficult. Family may help, but at some point you’re going to have to stand on your own two feet – just like your offspring. Here’s several things to consider when your family starts to expand.

Have a reserve

Before the newborn arrives you’ll have no idea how much money to spend. Here’s the truth: you’ll need medicines you’ve never heard of; you’ll need 23 dummies to replace the ones you lose; one or both of you will buy far too many clothes but not enough nappies, and will keep doing so; and generally you’ll lose grip of what is needed and what isn’t, especially in the immediate aftermath of birth.   

Therefore, budget to have a little left over for items that you can’t actually predict. It doesn’t need to be a massive amount, just a couple of hundred pounds. You’ll be thankful that it’s there when it’s needed.

Analysis of bank statements

Keep an eye on your statements to see where money is going out and coming in and adjust accordingly. It’s possible that you’re spending on luxuries, or lots of little bits and pieces that amount to more than you’d expect. If you and your other half have separate accounts, then go over each others’ statements.

Develop a budget…

… but one that works for you as a couple. Arguments will occur if one of you diverges from the plan of sharing money appropriately, by spending wantonly or not leaving enough money in the kitty to pay for bills.

There are alternatives to some of the things you spend money on; cheaper meals prepared fresh rather than frozen meals or takeaways, and films on Netflix as an alternative to going out to the cinema 2/3 times a month – not that you’ll be doing that much with a young family.

Consolidate High Interest Rate Debts

If you’re carrying high interest rate debts, you need to make a concerted effort to pay them off as fast as possible. Although it’s a lot easier said than done, you can take appropriate steps to fast track your way out of debt. The first thing you should do is call your creditors to see if they can lower your interest rate- you’d be surprised at what they can do for you. It also may be beneficial to consolidate your debts with a personal loan to lower the total amount in interest you pay overtime.

Price comparisons

Just an hour shopping around comparison sites to look for alternatives for utilities and broadband, insurance, television subscriptions and other costs where there are multiple options might save a lot of money across months and years. That could also include alternative places to shop for food or online purchases.

One of the biggest spends, from a year onwards, is childcare; according to Money Advice Service the average cost of sending a child under the age of two to nursery is £115 per week. The key, again, is to shop around for prices taking into account the distance from your home and any benefits you might be receiving such as tax credits and childcare vouchers. At some point you may have to face facts and admit it might even be worth returning to work, if the childcare cost is not viable.


Netmums suggests placing any money leftover at the end of the month into a savings account such as an ISA which will ‘help your money to build up quicker without impacting on your day-to-day living costs.’

On the lookout

Always be vigilant for vouchers, special offers and general ways to save money. If you can’t find time to do this in the day, do it at night when you’re up with your baby!

Get Freebies!

There's a wealth of freebies to be found online, whether it be trial products with your weekly shop or free classes for your little ones (take a look at www.whatson4littleones.co.uk for 0-5 years or www.whatson4schoolkids.co.uk for 5-12 years).

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