The Five Top Expenses for Young Families and How To Cut back

Young families have many obligations to fulfil, and the financial burden can sometimes feel overwhelming. It can be hard for a young couple raising a family to make ends meet month to month with the constant stream of expenses always coming in. With a limited disposable income that most young families have to live on, some costs can overrun others and lead to financial constraints. Once you’ve established where the majority of your family’s money is going, knowing how to manage and reduce certain expenses can free up otherwise spent income, allowing you to pay off debt, save for retirement or even invest. Let’s look into the top five expenses for young families now.

Home Repayments

As the majority of families own homes, the highest expense that young families have to deal with is a mortgage, or rent if they don’t own. A common miscalculation that leads to unnecessarily costly mortgage payments is getting more house than is necessary. Even when thinking expanding your home or looking to buy a larger property in readiness for a family, consider how much additional space you really need and the financial implications. For instance, if you’re expecting your first child, don’t look to buy a four bedroom house that you know will stretch your finances month to month. So many young families feel pressurized to have the perfect family house in the perfect location, but this isn’t always possible when you have a young family and the expenses that go alongside them to think about. It is far more practical to start smaller or even working with the space you have (if possible), only up-sizing once completely necessary. This will help with your monthly expenses enormously, as you won’t be paying out each month on a mortgage (or rent) disproportionate to your earnings, making you short across everything else. Financial experts advise that a family should spend no more than 30% of its income on home payments, and that includes insurance and property taxes. See if you can renegotiate loan repayment terms with your lender to avoid spending half of your income on them.


Often young families where both parents are working find their largest, and most unavoidable expense, to be childcare services. The cost of having childminders look after your little ones can add up to a considerable expense in the long run. It’s far worse for families with more than one child in need of care. While it’s often necessary that both parents go back to work, really question whether you have any relatives or friends between the two of you that would consider childminding. It’s not always viable, but even if a family member or friend can only help out once a week you will still be saving considerably on the cost of childcare. During the holiday season look into whether you can hire a babysitter, as costs will lower than those of a professional day care service.


The weekly grocery shop is a huge expense for any family, and many young families spend far more than they should on food and drink. You may find your refrigerator packed to the door and then a third of that goes to waste, or perhaps you’re spending more than you need to be on unnecessary sweets and biscuits. The presence of a detailed budget for your food expenditure will come in very handy when trying to save, as well as a weekly meal place. A meal plan is an extremely useful way to manage the expense of the grocery shop as it allows you to only purchase food you need for each of your meals. Anything additional (such as soda or desserts for the kids) can be budgeted for, and you can decide week to week how much (if any) you can afford to spend on these ‘additionals’. If possible, do your grocery shop online so that you’re not tempted into buying unnecessary treats. Not only will your bank balance thank you, but you may find so will your health. On top of the grocery shop, Young families can spend a lot of money dining out. Try and limit these to special occasions, rather than habit, create fun alternatives like a candlelit dinner in your backyard. Carrying packed lunch, particularly for young children, is a very effective to save on your expenses.

Children’s birthdays

Monthly movie nights, day trips out and annual holidays certainly contribute to many young families expenses, but quite often the worst offender of all is children’s birthdays. They can end up contributing hugely to your monthly expenses. Birthdays are deceptively expensive. Try to set a realistic budget for birthdays, and starting this when your children are younger will mean that they don’t have inflated expectations. So many young families will turn to credit cards to cover the cost of their children’s birthdays and Christmas, but don’t fall victim to the temptation. Not only is this the worst idea when looking at the long term financial health of your family, but it’s creating unattainable standards as you’re purchasing above your means. You don’t need to add credit card repayments to the list of monthly expenses. Be realistic about how much you can spend, and set a budget relative to your monthly incomings. Getting gifts for all of your children’s friends can be quite costly, so there may be times when you need to say no, or at least set realistic budgets.

Energy Bills

Fuel is one expense that most families have trouble with. Depending on the appliances and equipment in your home, you may be dealing with very high power bills that eat up the largest proportion of your monthly expenditure. However, there are ways a family can cut back on energy use. Getting energy efficient appliances is one way to minimise consumption. Closing windows and using curtains during winter can help your heating system work well. Turning off unused lights can account for significant savings and so does switching off appliances. Encourage your children to spend time reading or playing outdoors so that they’re not reliant on Another way to help cut back on energy bills is to compare deals on energy usage annually, as there may be other providers offering cheaper rates.

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