Take a look at your domestic economy

A baby brings change into your life, including financial change. Create a cushion to make facing new expenses easier and to guarantee your financial peace of mind

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.

What expenses are there with the arrival of a baby?

A newborn baby brings high expenditure. Besides clothing and hygiene products, you need no end of accessories for his or her care and safety, such as a pram, a bathtub, a car seat, etc., all of which cost quite a lot of money.

To these extra expenses we have to add:

  • Higher costs for heating in winter and air conditioning in summer (to cool the room before they go to sleep, as you should not use air conditioning with the baby in the room).
  • Possible medical fees in the event of illness, medicines or specific care.

Moreover, you should remember that the fixed and unforeseen costs can accumulate with everyday financial challenges that can bust your budget, such as breakdowns in the home or car, tax payments, costs related to sudden illness, dentistry... etc.

According to the Spanish National Statistics Institute (INE), the birth of a child can add up to 40% on your outgoings. This therefore means that the family unit needs to redistribute expenses to adapt to its new situation. And the reality is that you can handle any of these expenses with a bit of forward planning

Back-up instruments for expenditure provision

In order to have a proper savings capacity and manage your money well, you need to find value for money in your everyday decisions. This affects both your daily shopping and other more important decisions, such as rent, debts and other long-term financial commitments.

As a starting point, it is advisable to take stock of your income and expenditure, to find out exactly where the money comes in and where it goes out.

BBVA customers have a wide range of tools at their disposal to help them to meet their savings goals:

  • The My day to Day, My Goals and Budgets tools let you directly oversee your spending and bills.
  • The Budgets tool lets you choose one or more categories to set a budget and the maximum for this and future months.
  • The My Goals tool, available on the BBVA app or at bbva.es, lets you set savings goals and know or find out how to reach them.
  • The My Day to Day tool allows you to check your finances on a daily basis. The added option to also monitor movements allows you to quickly see an overview of your expenses, and thus proceed to lower them. A virtual piggy bank helps you with your daily savings.

This kind of tool will not only help you do things with your savings that may have seemed impossible to you, but will also help you coordinate the income and expenditure of the family economy before the arrival of a baby.