Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life's money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to moneycoach@timesofmalta.com
Dear Luca,
They say life offers many challenges, and yet I am proud to say that, together with the help of my husband, I’ve been able to overcome most of them. We went through a miscarriage, which was a terrible experience, but we overcame it together.
Now, we have a son who is the joy of our lives. Yet I never imagined the financial strain that this would bring with it. I earn much more than my husband does and it is next to impossible to reduce my hours to take care of my son.
Apart from that, I have to admit that we are also struggling in terms of saving, mainly because of the increased expenses that came with the birth of our son.
I am sure that I am not saying anything new here and that there are many parents out there facing the same difficulties, yet I cannot deny the feeling that, although others may be managing well, I am struggling.
The mere fact that I am now checking the receipts after going to the supermarket or that I am actually worried there will not be enough to save once we have gone through all the expenses of the month makes me feel uneasy.
My family has always been firm savers. My parents had five children, and I never heard them complain about financial struggles. Could it be that life was cheaper then? Or maybe it was better financial management?
Finally, a big worry I have is that, since I am not saving, I will not be able to leave anything for my son when he grows up. I know it is not essential, but it would be nice to leave him a small sum of money by age 20-25.
Your thoughts and guidance would be greatly appreciated!
Uneasy Mother
Luca responds:
Despite my experience in personal finances, I was also completely caught off-guard after the birth of my children.
Expenses increased a lot, and for a few weeks I found it difficult to save as well. It was only when I sat down and revisited my personal finance plan that things started getting easier.
The biggest problem, I found, was that although in practice my wife and I were preparing for the birth of our child... mentally I wasn’t that prepared. And as a result, the personal finance plan I had only made sense for when it was just me and my wife.
I had to literally sit down and go through all expenses and income to see what made the most sense in this new financial reality. Some things had to be given up - the things that we previously considered needs, but now became wants given that priorities had changed.
That is why I encourage you to sit down with your husband, and go through the following:
- Your monthly expenses – what are your needs, really?
These are the things which are absolutely necessary for a good life for your family.
With those out of the way, ask yourself, what about your wants? These are the things which you don’t really need. For example, I am all for taking a break and going on holidays... but do they need to be expensive ones? And if your back is really against the wall, there’s nothing wrong with not travelling at all, until your financial situation gets better.
- Your monthly income – and once this is defined, ask yourselves – how can I increase it?
This could involve your husband taking on a part-time job, you asking for a raise at work, or exploring opportunities to create a side income. For example, coincidentally, I started my money coaching business as a side hustle the year my son was born. Little did I know it would turn into one of the best decisions I ever made, both financially and in terms of my own personal growth.
- Once you do all the above, revisit your savings goals
Your first priority should always be to set up an emergency fund, making sure you have three to six months worth of expenses saved up. If you don’t have one, start making small contributions to cover at least one month's worth of expenses. I cannot repeat this enough, nothing is more essential than having liquidity. You might say I can only save €20 a month – it doesn’t matter! Small contributions make a difference, and they create a habit... which is the most important thing of all.
Luca is the founder of the Money Coaching Hub. Email him your financial questions or your response to today's question for a chance to be featured in a future column.
Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.