Managing money can be tricky at the best of times, especially as a stay at home parent. If you’ve chosen to stay at home and raise your child rather than returning to work, you may find it challenging to manage your finances once you lack your regular income. Fortunately, there are things you can do to make money management more effective and live more comfortably while taking care of your little one. Here are three helpful tips on how to manage your finances as a stay at home parent.
Cut costs as much as possible
The number one rule when times are hard is to try and cut down on your spending habits and make savings. This can seem easier said than done, but there are some easy ways to make sure you’re minimising your spending as much as possible. Along with cutting costs such as your supermarket shop, one of the simplest and most effective ways to track your spending habits and save money is by budgeting with methods such as the 50/30/20 method. This method encourages people to split their money into three categories – needs, which 50% of your income should go on, wants, which 30% of your income can go towards, and savings, which you put the remaining 20% towards.
Your ‘needs’ are defined as things you need to spend money on such as bills, food, and medical care, while ‘wants’ account for any treats such as takeaways or family days out. Then you should have a good amount of money left to go towards your savings, which can go into a rainy day fund or help you pay for any large outstanding costs. This is considered a helpful strategy for saving money as it helps you get more perspective on the amount of money you’re actually able to save. For instance, you may find that you have much more money than needed for your ‘wants’, and therefore are able to save money more quickly.
Think about ways to earn money from home
If you have the time and ability to do so, it’s worth exploring ways to earn some extra cash from home while taking care of your child. There are a number of different ways to do this, all of which suit varying levels of skill, ability or time restraints. Those who have a certain skill such as content writing or graphic design could explore freelance opportunities on sites like Freelancer or People Per Hour. This way, stay at home parents can earn extra money by taking on tasks whenever possible, and could make a substantial amount depending on the job.
Other things you could do to earn money from home include selling items online using sites like Depop or eBay. You could be surprised how much money those old designer shoes or outgrown baby clothes could go for! Keeping an eye out for ways to earn extra cash is a crucial money management tip for everyone to consider.
Consider your long-term plan
In order to really get to grips with your finances, it’s crucial to think about your long-term goals. If you think you’re going to be a stay at home parent for a long time, you may need to consider more substantial ways to manage your money and possibly boost your income. For instance, if you’re hoping to save enough money for certain milestones such as significant events or to build a fund for your child, you may need an extra push to see the results you hope for. Investing your money is one of the best tips for a long-term financial strategy, particularly property investment. By investing in a buy to let property, you can earn regular money from rental payments, while also gaining a lump sum of money once you choose to sell the property, provided it’s grown in value. RWinvest, a property company based in the UK, put together a guide to UK house prices which reveals that certain parts of the UK such as Manchester and Liverpool are set to see huge property price growth over the coming years, which is good news for investors set on high long-term capital growth. If you’re financially able, it’s definitely worth exploring investment options as a way to boost your financial stability and meet goals more quickly.