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How Your Budget Changes When You Start a Family
How Your Budget Changes When You Start a Family
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How Your Budget Changes When You Start a Family

Doris Kendi
August 8, 2022

While having a child might be phenomenal in terms of emotional and physical ups and downs, it is the financial aspects of starting a family and raising a child that keeps new parents up at night. Your monthly expenses will increase, and if you don’t stay on top of your budget and finances, you might spend more than you have to.

Considering that your child will be financially dependent on you for at least the first 18 years of their life, being prepared for that task is vital. It is the only way you will ensure they’re fed, clothed, and given the best education. And you’ll have to balance all this with other financial goals like retirement planning.

So what happens to your budget when you start a family, and how do you control it? This article will explore five changes to your budget and some steps you can take to adjust accordingly. 

Also read: How to Financially Prepare For a Child

5 Budget Changes for New Families

Apart from having to budget for your everyday household expenses like food, utilities, entertainment, and transportation, you will need to start budgeting for all the costs that come with raising a child. Here are five changes you will need to make to your budget when you start a family.

Also read: The 7 Types of Personal Budgets and How to Choose

Child Care Costs 

Childcare costs are the first thing you will need to incorporate into your budget when you start a family. The costs begin when you are expecting a child and have to visit clinics and hold baby showers (if you choose to). With the rising cost of living, without proper preparation, your budget might significantly be affected. 

Some child care costs you'll need to factor into your budget include food, clothing, nanny, daycare, toys, etc. 

With a whole new human being to take care of, you might be forced to cut some unnecessary spending from your previous budgets, adjust your expenses and prioritise childcare costs. 

Read Also: The Financial Cost of Being a Father in Kenya 

Changes in Health Care 

Children need more medical attention, and you will have to make uncountable hospital trips as a new parent. And medical bills are high. To cut on medical expenses, ensure your child and the whole family should be well insured. 

To save money and get the best deal, you can opt for combined health insurance for your whole family. The NHIF Supa Cover, for instance, starts at Ksh500 and covers all your nuclear family members. This is the national insurance coverage, but you can opt for other health insurance policies that cover everything excluded from Supa Cover, like dental care. 

Read Also: Family Health: Budgeting for Healthcare Costs in Kenya

Changes In Housing

When you start a family, you might need to move to a bigger house in a safer neighbourhood with the best amenities, especially good hospitals and schools. This could mean paying more rent and commuting more to and from work. 

You will also be thinking about homeownership and how you can provide more stability to your family. You might need to revisit your financial goals and start saving and investing towards owning a house. 

Read Also: The 9 Routes to Owning a Home In Kenya

Education Planning 

Ensuring your child receives the best education is on top of every parent's mind. But the best education is expensive. Alongside your other financial goals like retirement and homeownership, you will also need to prioritise education planning. 

Some parents start the process as soon as their child is born. This ensures they will lower the amount they need to save or invest and take advantage of compound interest.

You will need to plan how much you will spend educating your child from kindergarten to university. While primary and secondary school fees may be relatively affordable if you put your kid through the public education system, college and university fees have sharply risen in recent years. 

Read Also: Every Young Parent’s Struggle: Planning for Children's Education

Insurance Changes

Insurance will play a significant role in ensuring your family's financial future is protected. When you start a family, you'll need to update all your insurance covers and introduce new ones, which might lead to paying more in premiums. 

The most essential cover you will need is life insurance for you and your partner. If you die or are incapacitated, your insurer will pay your dependents the insured amount which should ideally cater to most of their needs. This money should ensure your family's lifestyle won't be interrupted, they will be cared for, and your kids can continue their education. 

Other essential insurance covers you'll need include health, income protection, disability, home, and education insurance. 

Also read: 6 Signs You Are Financially Ready to Have a Baby

Adjusting your Budget When you Start a Family

With a lot of changes happening to your budget, you risk driving your family into financial turmoil without enough preparation and budget adjustments. You will need to take the necessary steps to invest and save for your family's future by diversifying your sources of income, increasing your income streams, and getting properly insured. 

Here are some steps you can take to keep up with the new changes:

Create a new monthly budget: With all these changes to think about, you will need to make a new budget. Prioritise your needs over wants, and set realistic goals. Put measures in place to ensure you stick to your budget and constantly review and make changes where you see fit. A budget will help you curb compulsive and unnecessary spending.

Pay off debt: As you take steps toward providing your family with financial stability, an important factor to work towards is eliminating debts. Debt can slow down your progress without proper planning and even prevent you from accomplishing your financial goals. Prudent borrowing on the other hand can be a good fuel to your financial goals.

Read Also: Why Debt is Good For You

Have emergency funds: Put away three to six months' worth of family expenses to ensure your lifestyle isn’t interrupted, and you have enough time to adapt and bounce back when you lose your jobs, get sick, or have to foot a bill outside your budget. You should separate your rainy day funds from your savings and investments and make them easily accessible.

Read Also: How Much Emergency Money Should a Family Have In 2022

Align your goals with your partner: Without being on the same page, creating a budget and sticking to it will be challenging. You should both be able to make compromises and decide how you will spend the money you bring home for the family’s benefit. To prevent money arguments, you can allow each other a reasonable amount for personal use and entertainment.

Read Also: 7 Smart Ways To Manage Finances With Your Partner


Once you decide to start a family, which may take the form of a formal wedding, the popular route of ‘come-we-stay, or the birth of a child, this is a significant juncture in your financial journey that will necessitate changes.

You need to be financially prepared for the responsibilities that come with sharing your life with someone else, the prospect of combining incomes and sharing expenses including those you would never have thought of before and the costs of childcare if you have one. 

Being prepared will ensure the change of status does not come in the way of your most cherished financial goals and you can enjoy family life as much as you did singlehood. 

Also read: Step-By-Step Approach to Planning Your Child's Education

Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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