Bringing a new life into the world can be one of the most rewarding and exciting things you can do. But as most parents will tell you, it’s an expensive business. Our Money Stats show, it costs an average of £29.65* a day to raise a child to the age of 21. So if you’re planning on starting a family, or have a child on the way, we’ve compiled 10 key things to start thinking about that should help baby-proof your finances.
- WHAT ARE YOUR PLANS?
Have you thought long and hard about what you’re going to do when the baby comes along? Will you go back to work, or had you dreamed of quitting your job to stay at home with the kids? One way or the other, your life will never be the same! Understanding exactly how your income and expenditure will change will go along way in helping you make these crucial decisions.
Therefore it is important to think about whether you can comfortably live off one partner’s income. Or alternatively, if you are going back to work, find out how much childcare costs are in your area so you can get a better idea of what your expenses will be once your family starts to grow.
- BUDGET BABY BUDGET!
In many cases it’s likely that you’ll suddenly have a bunch of new expenses, and significantly less income than before. Therefore, make budgeting a priority.
Find out the cost of food, formula, bottles and a lot more laundry detergent, then find space in your budget to cover these. Think of ways (big and small) to cut corners and generate extra cash for baby expenses. Can you cut back on high-priced lattes or is there an alternative way you can travel to work, to make room for these new costs?
If you can try and implement this budget even before the baby comes along, you will be in the best possible position to weather the financial storm. Our free online Budget Builder can help.
- TRY TO PAY OFF OUTSTANDING DEBTS
The last thing you want when you could be out playing in the park or going swimming with your little one, is the added stress of debt hanging over you.
Your new budget will help you find areas where you can cut costs, so if you possibly can, try to pay off any outstanding debts before the baby is born. If that’s simply not possible, you still need a clear plan in place to make at least the minimum repayments and hopefully a little more each month.
If you feel that your debt has become a problem and you are struggling to meet the repayments, speak to StepChange, for free independent debt advice.
- WHAT’S YOUR MATERNITY/PATERNITY PACKAGE?
Make sure you know exactly what the package is at your organisation. This can vary greatly from business to business so speak to your HR representative as soon as possible.
You can find out your statutory rights here.
- KNOW WHAT YOU ARE ENTITLED TO
No matter what your situation, everyone can do with a little helping hand during this stage in their life. Find out exactly what you are entitled to and what support is available to you; this could come in the form of Child Tax Credit, Child Benefits, Childcare Vouchers, Sure Start Maternity Grant. Or the free NHS prescriptions and dental care you are entitled to during pregnancy. Bonus!
Additionally, pregnant employees are legally eligible to take paid time off for antenatal appointments. So it pays to do your research, literally.
If you are still unsure as to what you are entitled to, have a go on this benefits calculator
- DON’T GO ON A SHOPPING SPREE
It can be difficult to curb the spending when you see how cute baby clothes are or when every baby magazine is promoting the latest state of the art buggy. And while it’s important to equip yourself with the essentials, do you really need that nappy disposal system?
Before you panic about all the baby gadgets you’ll need, it is worth having a real think about where you can afford to splurge or where you can make do. Are there things that you could even get for free? Do you have friends that can lend you items they no longer need? Or can you find some of the items in second hand or charity shops, which can be a great source of baby paraphernalia!
- CHECK YOU ARE ON THE RIGHT FUEL BILL
Your current energy provider might offer you the best deal for your current situation, but this may not be the case when there is suddenly a lot more baths to be had, extra heating needed and lights left on. Don’t be afraid to shop around and change energy suppliers if you can get a better deal elsewhere. There are lots of comparison sites out there that can help you do just this.
- TALK FRANKLY ABOUT MONEY
Talk openly about money with your partner to ensure you are both singing from the same hymn sheet. Don’t keep money secrets and there won’t be any nasty surprises later on down the line.
Also, talk to others, family, friends, or whoever is there to support you. If you are a single parent, Gingerbread can offer free support and great resources!
- A GOOD SAVINGS PLAN
If you will be shifting from a double to single income family, now is a great time to start saving…while you still have 2 pay cheques!
Whether you are just thinking of starting a family or 3 months away from one, having a bigger net for those emergencies will make a huge difference. Don’t get too worried about tackling everything at once (try not to worry about their higher education just yet!), but anything you can start saving now will make money matters later down the line easier to deal with.
And the earlier you adopt the habit of saving the easier it will be to save for those University funds later down the line!
If you have given some thought to all of the above and put some plans in place you are much less likely to have to worry about the money side of things, leaving you free to enjoy every second of this exciting new experience.