How to manage finances in a single income household

Financial independence is the greatest, so, your life seems perfect when you and your partner are both earning. When the income is doubled, no one is answerable to the other in terms of expenses and losses. “So far so good” is what you are probably thinking.Soon enough you want to start a family and then the dynamics of your arrangement alter slightly. In most households the woman steps up and decides to extend her maternity break, leaving aside her career and that dear fatty paycheck (The ETA could be anywhere from three to thirteen years!). Now, the three of you are reduced to a single income household. You begin to watch out for every single transaction that is monetary in nature and before you know it, you are already feeling the pinch. After all, it isn’t what you and your partner had anticipated when you made that robust plan and arrived at a common understanding to quit your job! Things begin to get slightly difficult and a little out of hand. Amidst changing nappies, sore breasts and sleepless nights you begin to worry about finances too.Your expenses now are directly proportionate to your child’s growth. And with each passing day it dawns on you that people who say “Money is not everything” are big fat liars! Because, if you need anything more to your happy family right now, is that little extra monetary buffer that will ease out the pressure on your partner and will make you feel a tad bit more secure. download

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So what can you do to manage your financial situation?
  1. Start with small but smart Investments: I wish I could say plan ahead, but then who am I kidding? Our grand plans don’t churn out the way we desire and often we find ourselves running helter-skelter at the eleventh hour. So start putting aside a rather meagre amount into short term investment plans like mutual funds, Chit funds, fixed deposits or maybe into an insurance plan. That way you will be assured of decent returns on those investments after the stipulated period.
  2. Set budgets: Your expenses over the next few months are only going to spike up. So it might not be wise to indulge in impulsive purchases, although what you can do is to prepare a budget for each of your slightly pricey purchases like car seats, strollers, crib etc. But the most important part is to stick to your budget. What you need to keep in mind is to have realistic budgets and arrive at the amounts taking into consideration your total income and your ability to spare without hampering your day to day expenditures.
  3. Improvise: This is nothing but making the most of what you already have. If you have two kids, it goes without saying that your first borns clothes and toys can be used for the second one too. Sometimes, it's wise to buy unisex clothes like T-shirts and shorts that can be worn and passed down to the sibling of another gender. That means, sometimes you may have to invest in slightly superior-quality products so that their shelf life is extended. Buy clothes that are slightly bigger in size because you could always wear trousers that are loose with a belt or fold the lengths of denims and elongate the durability of clothes. The same applies to shoes as well, you could stuff a tiny piece of cloth in your kids sneaker and utilize them for longer periods!
  4. Needs Vs wants: This is always going to be a struggle to decide what you want as against what you really need. And the difference is that your wants may not always be a necessity. Thus, you could write down and analyze the things you absolutely need and strike off the things that can wait for a bit.
  5. Bulk buying (wholesale): Usually when you buy in large quantities you could get better deals in terms of price. So things like diapers which are pricey and which you will need truck loads of during the first few years could be bought from wholesale stores (Like Metro cash and carry) or also online where you get competitive rates and great discounts.
  6. Work from home options: The internet has been a savior to so many of us and with the technologies we have at our disposal we are privy to flexible working arrangements and opportunities. If you have a few hours to spare you could try doing some online jobs (data entry jobs) that are available in abundance or take up a hobby (baking, writing)and turn it into a small income by freelancing.