Foster Care Cost of Living: Managing Finances While Fostering

Tips for managing your money as a foster parent

Create a realistic budget 

The key to creating a budget that you’ll stick to is making it realistic. If your budget is overly strict, the chances are you’ll find it difficult to maintain, so be honest with yourself when you start the process.

Obviously, your budget will include money you receive from your fostering allowance, benefits and job (if you work while fostering), as well as non-negotiable bills that you pay every month, such as gas and electric, water, mortgage or rent, and insurance.

However, to create a realistic budget that helps you stay conscious of where your money is going, you need to review your past and present expenditures. So download your bank statements and work out how much you currently spend on groceries, subscriptions, hobbies, and treats and add these to your budget. This way, you’ll see how much you have left over for savings or something you really want to buy.

Set yourself achievable targets 

If you want to reduce spending or save for something special, instead of eliminating everything that brings you joy from your budget, set yourself some realistic targets that you can actually achieve.

For example, if your grocery bill has gotten a bit out of hand and you find yourself throwing food away, you could aim to cut it by £20 or £30. If you realise you have multiple streaming subscriptions but only really use one, you could cancel the others.

These little tweaks to your spending will add up over time, helping you reach saving goals faster while still being able to spend money on the things you enjoy.

Use a budgeting tool that works for you 

Throughout the year unexpected expenses are more than likely to occur, so there’s no point creating a budget and never looking at it again.

Find a budgeting tool that doesn’t feel like a chore to use so you’ll engage with it regularly. Here are some examples:

• Planners: If you prefer to put pen to paper, a budgeting planner could work for you.
• Spreadsheets: If you are a dab hand at Excel, why not create a spreadsheet? Or download the Money Saving Expert’s ready-to-use budget planner.
• Banks: Many banks offer budgeting tools in their apps, where you can set up categories and track your spending automatically.
• Apps: There are now hundreds of budgeting apps available, such as Emma, that allow you to track all your bank accounts, credit rating and mortgage deal in one place.

Life as a foster parent can get busy, so set yourself a monthly reminder to review your spending and adjust your budget if needed. Before you know it, budgeting will become a breeze.

Focus on your own financial goals 

In this day and age, we’re bombarded with advertisements from retailers, travel agents and influencers persuading us to part with our money for a product, experience, or service.

Couple this with our social media feeds being flooded with photos of piles of Christmas presents, new cars, and holidays, and it can be easy to get sucked into buying something you don’t need or can’t really afford to ‘keep up’ with friends and family.

In reality, everyone’s financial situation is different, and you never truly know how other families fund their lifestyles or if their finances are in good health. Take buying a new car, for example, over 80% are purchased using finance. And figures also show that 84% of adults in the UK had taken out credit or a loan between May 2023 and 2024.

If you’re feeling pressured to match the lifestyles of others, try to remind yourself of your own financial goals so you don’t end up living beyond your means.

Be a savvy shopper 

Even in a cost-of-living crisis, there are some things you just can’t cut back on. But you can still save money by being a savvy shopper.

When you foster with FCA, as part of our support for foster parents, you receive access to The Exchange, our exclusive foster parent rewards platform. All you have to do is log in, and you’ll find discount codes, instant vouchers, and reloadable cards that help you save money on everything from daily essentials to holidays, days out, and more.

It even includes a handy calculator to help you work out how much you could save, along with a SmartSpending app that gives you access to discounts and deals on the go.

Here are a few more easy ways to save money when you shop: 

• Use loyalty cards: From free drinks and exclusive discounts to vouchers for days out, holidays and more, loyalty cards are a really simple way to save cash.
• Buy pre-loved items: Whether you need a lawn mower, a bicycle for your foster child, or something else, Vinted, eBay, and Facebook Marketplace are your friends for saving money, with many items sold ‘like new’.
• Meal plan: Save money and prevent waste by only buying the food you need for your weekly mean plan.
• Have groceries delivered: When groceries are delivered, not only does it save time, but it also prevents you from adding things you don’t really need to your trolley, and you can see the running total while you shop.
• Buy discounted food through apps: At the end of each day, shops, restaurants, and cafes often have food that they won’t be able to sell the next day, but is too good to be thrown away. These businesses use apps like Too Good to Go to sell mystery bags of food and drink at a fraction of the original price.

Managing your money may sound like a bit of a slog, but over time, it’ll become second nature and you’ll feel better knowing that you have your finances under control. It’ll also free up your mind to concentrate on helping children and young people heal from their past, create new positive memories, and work towards a brighter future.