Happy new year, everyone!
While I’d like to wish for abundance this 2023, I chose to begin the year with a more realistic mindset. Coming from a challenging 2022, I’ll be honest that I’m not expecting too much from the Year of the Rabbit, financially speaking. With prices of goods going higher and higher, and economists talking about recession, I chose to start my 2023 journey with my feet on the ground.
This year, our little family is preparing for some big changes—a baby coming, and the start of our eldest’s grade school years. With major life changes come a long list of major expenses. So I’m bracing myself for major changes when it comes to our family budget.
Of course, we know the basics—the “save for the rainy days” motto or the utopian formula INCOME-SAVINGS=EXPENSES. But when your family is growing and your bills are unending, but your income is motionless, the financial knowledge in your head suddenly becomes a blur.
As parents, we can’t be all that pessimistic, can we? We have no choice but to make things work, whether or not the odds are in our favor. While staying realistic with our expectations, we can still be proactive in managing our family finances. For my very first blog post for the year, I’ll be sharing with you some of the tips I got from mentors, friends, and online research that I think can somehow help us become smarter in handling our family’s finances this 2023.
Create sources of passive income
While reducing expenses might be ideal, it might not be realistic for some families. So I’d rather start the list with a tip that’s more feasible for parents who can’t remove formula milk and tuition fees from the expenses list but can certainly find ways to achieve passive income.
If we can’t trim our expenses, why not increase the income? On top of our salaries from employment or the income from a business, we can invest in passive income sources that can give us additional income. Passive income is money earned without your active or direct involvement or without demanding much of your time and effort.
Here are some passive income ideas you can try this year:
- Investing in stock market
- Buying and selling real estate
- Investing government bonds
- Writing a book
- Having properties rented
- Creating online courses
- Starting a blog or vlog
- Selling stock digital photos
Make some necessary budget cuts
Though it can be impossible to remove major expenses in our life, it is feasible to make little temporary budget cuts that will make a big difference in your budget. To make room for more essential expenses and still leave some space for savings and investments, review your budget and determine some expenses that you can live without. Cancel that app subscription you seldom use. Cut down on the coffee shop visits. Limit your restaurant hopping. Avoid unplanned getaways.
Review your benefits and use them
When I became a parent, I became more mindful of my benefits, whether government-mandated benefits or the ones I get from health plans or insurance policies. There are so many benefits that can help us financially. We just don’t care to know them when we’re still young, single, and carefree. When you already have a family, it’s best to know your benefits so you can make the most of them. If you’re employed, check your benefits. You might be surprised that you have a variety of benefits from healthcare to housing loans. If you’re self-employed, check your government-mandated benefits.
Take saving money seriously
Saving for the future is like a cliché in every new year’s financial resolution, but this financial goal is certainly easier said than done. Though that’s the case, we should always try to take our family savings seriously every year. Make a concrete plan for it. You can even use a financial tool like SavingsCalculator.org to help you calculate how long it will take to reach your savings goal or how much you will need to save in order to reach a goal at a certain time.
Get an insurance
While purchasing an insurance policy may seem like another expense, it will surely come in handy at the right time. Just be wise in selecting an insurance plan. Get one with investment benefits or savings component. Based on my experience, my insurance plan gave me an extra hand when I needed emergency cash. So though paying the premium can be overwhelming, getting an insurance is a smart financial move for every adult.
Get a side hustle
Now that remote and flexible work arrangements are in, it’s easier to get side hustles. If your schedule still allows it, get a flexible job to increase your income. Whether you’re a full-time working parent or a stay-at-home mom who can’t leave the kids, you can get a remote side gig that will fit your schedule.
Side hustles won’t make you rich in an instant, but at least they can help pay those bills or give you extra money to use for investment. Focus on what you’re good at and start searching for side job opportunities that need your expertise. Some side hustle ideas are graphic designing, video editing, content writing, and virtual assistance.
Let’s start the year right by following these simple financial tips. May we be smart in managing our family’s finances throughout the year.
Got more financial tips for fellow parents? We’d love to know them. Please share your thoughts in the comment section.😉