Fatherhood can really put a strain on your finances. To begin with, there is an additional mouth to feed. Second, you have probably just received a huge pay cut (in yours and your wife's combined income) and then there are all the other new expenses which continue to come up. Nursery furniture, nappies, toys, safety devices, baby clothes, medical expenses. The future does not look too bright on the financial front either, when you consider things like school fees, pocket money and the inexhaustible list of expenses which children create.
From my recent experiences, I thought I'd put together a Fatherhood Finance Cheat Sheet. So here it is. 4 ways you can finesse your way through the financial challenges of fatherhood.
1. Check Through Your Subsciptions
I found that I had subscribed to a bunch of services I was not using anymore. So I did some house-cleaning and cancelled all those which were frivolous or not being used. This alone saved me about $100 per month.
2. Check Your Service Providers
Do you have services such as telephone, internet or pay TV that are out of contract? If so, do some shopping. Look for a better deal. You will probably find an offer out there that will give you more for less. In my case, I found a mobile phone deal which provided me with more free monthly phone calls for half the price. I saved $30 per month. They also gave me a free iPhone as part of the deal.
3. Check Your Debts
This is a tough one, many people find it difficult to manage debt. Review your debt portfolio, do you have debt from many sources? This includes credit cards.
3a) Eliminate Debt If Possible
Look at the smallest debt. Can you completely pay it off without too much hardship? If so, do it. Then look at the next smallest one and repeat. The problem with multiple debts is they all have their minimum payment requirements. If you can eliminate your small ones, you can quickly free up cash (by removing these minimum payments) which can be used for family.
3b) Consolidate Debt If Possible
Look at your cheapest debt. (the one with the lowest interest rate) Can you approach the provider and ask them to take more of your business, by buying out your other debts. If so, do it. This will give you two benefits. By consolidating many small debts into one large debt, you will reduce your minimum monthly payments, freeing up cash for family. If you do it in a way that reduces your average (across your debts) interest rate, you will save money over the life of the debts.
4. Use Ebay Where Possible
You do not have to buy new baby things all the time. Babies grow so fast, they rarely wear anything out, be it toys, clothes or furniture. There is a massive market for second hand baby gear on eBay. You will save a fortune.