For many couples, deciding to have children brings an additional question: "Can we cover household expenses and pay for a new baby with one less financial provider in the home?" For those families who opt to have one parent stay at home after the birth of a baby, smart money management becomes more crucial than ever. One way to do this is to start with understanding what you've got, then planning for what you need. Here are some suggestions for how to live within a budget in a single-income home.
Define Bi-weekly Spending. When asked to estimate how much money is spent in a two-week period for household expenses, many moms (and dads) have a hard time coming up with a figure. The easiest way to calculate how much you spend overall is to identify specific regular expenses, for example: $90 for groceries, $20 for dry cleaning or $90 for bills.
Identify Wants vs. Needs. When trying to minimize expenses, it's sometimes hard to give up things that we want, particularly if we've grown accustomed to having them. If the above exercise shows that you are spending an excessive amount (as it relates to your income) on dining out, it's important to acknowledge that expense and discuss alternatives.
Assign Dollar Amounts to Each Category. When developing a household budget, it helps to factor in fixed costs first, and then include additional baby-related expenses. These are the expenses that are consistent every month, such as the mortgage and a car payment. If the costs of a certain item vary from month to month, look at what you've paid the last three months and come up with an average.
Devise a Savings Plan. It's a good idea to include a savings plan as part of your budget. Whether it's 50 cents or 50 dollars a day, many of us tend to fall short when it comes to putting money away. But let's face it: Most people would agree that they feel more comfortable with some sort of financial cushion for unanticipated costs or emergencies.
