How to manage your mortgage with a growing family

How to manage your mortgage with a growing family

Whether you’re about to have a baby or you’re juggling a growing family, stuff like your home loan is often the last thing on your mind. There are day-to-day living expenses to worry about and new costs, like childcare, that can sometimes put a strain on your finances.

The good news is there are things you can do to ensure managing your mortgage doesn’t prevent you from doing what you love with your family.

Plan for big life events

It’s not always easy to think forward when there are little mouths to feed but a solid plan can help you avoid financial mishaps in the future. Map out some of the key milestones where money might get tight, for example when you or your partner are on parental leave or when you need to start paying for your child's education (it might be daycare, school or even university).

While you can, consider putting a little extra aside to help with your mortgage repayments when there’s less money coming in or big expenses to pay.

Put together a family friendly budget

Once you’ve mapped out your family milestones, creating a budget is a great way to stay on top of your everyday expenses, like groceries and bills. Find ways to save on stuff you buy regularly – get nappies and household items in bulk to make them cheaper – or cut out some of the expenses you don’t really need, like mid-week UberEats.

Your home loan repayment is usually your biggest expense so make sure you’ve always got enough to make your repayments on time. But most importantly, remember it’s OK to have fun with your family and splurge on the things you love every now and then.

Consider refinancing your home loan

If you haven’t reviewed your home loan in two years or more, you’re likely paying more interest than you need to. What was working for you and your family back then might not be suitable as your family starts to grow.

Shop around to see if there are better deals available. You may be able to find a home loan with a lower interest rate or lenders that offer loan features that are more suitable for families needs. You’ll need to weigh up the costs and benefits before making any decisions - more often than not, the yearly savings outweigh any upfront costs. If you’re not ready to refinance, chat to your existing lender to see if you can negotiate a better interest rate.

Get savvy with your finance reminders

It’s a good idea to make reviewing your home loan (and other big expenses) a regular habit. That way you won’t get hit with the loyalty tax. One way to keep on top of it is by choosing a day that you can dedicate to reviewing your finances every year.

Try setting an alarm on your phone or using an app like GetReminded, it reminds you when there is important stuff coming up so you can avoid overpaying. There are a lot of great apps out there to help busy parents stay on top of their home loans.

Having a plan and putting it into action can put your family in a better position when something unexpected pops up. If you’re worried about your expenses or being able to repay your home loan, it’s best to speak to your lender or broker to understand all your options.

Article supplied by True Savings.