Are you feeling the pinch of increasing mortgage payments and monthly bills, but want to start a family in the next couple of years? And thinking how can you and your partner manage this when you feel like you have less and less money to save each month?
At Catapult Wealth, we understand that starting a family can be a significant financial commitment, and it’s not uncommon for many to experience the pinch of increasing mortgage payments and monthly bills. However, with the right mindset and a few smart strategies, it is possible to manage your finances and build a secure future for your family. Here are some tips to help you get started:
- Determine your priorities and make trade-offs
The first step is to get realistic about your current financial situation and identify the non-essential spending you can cut back on. By determining what you’re willing to compromise on, you can free up money to save for your family’s future.
- Focus on your top 5 expenses
After reviewing your non-essentials, identify your most significant monthly expenses and see if you can reduce them. Shopping around for the best deals on your mortgage, food, transport, utility bills, and insurance can make a big difference to your savings.
- Try living off one income
If possible, try living off one income and saving the other to supercharge your savings. This approach can accelerate your savings efforts and stress-test your finances when your household income is reduced.
- Set realistic expectations
Becoming a parent can be an exciting journey, and you may be tempted to splash out on the biggest and best brands. But do you really need to? It’s essential to set realistic expectations when it comes to baby items. Consider buying second-hand or borrowing from family and friends instead of purchasing expensive new items.
- Explore your entitlements
Find out about your eligibility for parental leave pay, family tax benefit, and childcare subsidy. These entitlements can help make up for any reduced income during your child’s early years.
- Plan ahead for education
Consider investing in an education bond to help cover the cost of your child’s education. Education bonds can be a tax-effective way to save for courses, textbooks, tutors, uniforms, accommodation, equipment, and travel.
- Pay down ‘bad’ debts
Focus on paying off high-interest debt, such as credit cards and personal loans, which can hinder your ability to save.
- Use behavioural science to accelerate your savings
Behavioural science can help you save more by making simple changes to your spending habits. Writing down your savings goals, removing ‘friction’ from your spending, and saving frequently and consistently can form new saving habits.
At Catapult Wealth, we’re committed to helping our clients achieve their financial goals. If you’d like more information on how we can help, visit our website at www.catapultwealth.com.au.