News of a pregnancy brings much joy, but it also requires an economic reflection. To prepare yourself, it is a good idea to perform an in-depth review of your financial situation and reorganize your outgoings to make them fit the new family budget and avoid your finances getting tight.
Controlling the household economy
The monthly income of a family, with or without children, has to cover basic needs, meet possible debt commitments and, above all, guarantee a stable economic future. In this respect, the 50-30-20 rule is a good option to structure your income and outgoings.
The 50-30-20 rule means distributing your income into three groups of expenses:
- 50% of your income should be used to cover your basic needs such as paying the rent or mortgage, and food, utilities, travel, etc.
- 30% should be used for useful or fun, but not essential, goods or services. This would be for things as broad as leisure activities, tech gadgets, holidays, etc.
- 20% should go to your savings, preferably in a separate account.
This way of controlling your household finances guarantees that your income is well managed, and in the longer term, allows you to create a financial cushion for sudden, unforeseen expenditure. All of this, which all families should do, is even more important upon the arrival of a baby.