It’s a thought that all new parents, or soon to be parents have – do we really need all this stuff?
Everyone has an opinion and only too eager to share their experiences of what’s good value, what will be a waste of money, along, of course, with their parenting advice!
While you might not need all the stuff that you have planned to purchase and can probably revisit the list, there’s no getting around the fact that having a baby will bring changes to your budget.
Having a new baby is exhausting and time consuming and you’re likely to be a little emotional, so this time can easily bring out bad money habits, because you just don’t have the brain power to make logical decisions and you just want to do the best for your little one!
But just because you want the best for your little one, doesn’t mean you have to go broke doing it.
Here are Magenta’s top 10 tips to try and help prevent you falling into a budget or money spiral when baby is demanding all your attention.
Plan for new costs and budget, budget, budget
Your spending will change with having a baby. You may be socialising less and that may balance out against nappies, bottles and car seats, but spending more on good food and convenience items when you are busy and sleep deprived is likely to go up.
Work out your outgoings for the average month and set a realistic monthly budget including those new things. If you stick to it, you won’t go overdrawn and if you save a bit, you can put it towards paying off any debts you may have lurking around, or maybe pay someone to cut the grass!
Squash those debts!
If you have loans and your credit cards, now’s the time to pay them off. Look into the options available, you may be able to switch to a new card with a zero per cent rate on transfers and balances and consolidate your loans into one.
Best baby care
If you have decided to take maternity leave from work, find out how much you’re entitled to and how much your employer will pay. Take into account your partner’s earnings and consider if they will take Shared Parental Leave – this way you can do all your sums!
Have a think about your childcare options when you go back to work; who will you use and how much will it cost?
Shop smart and don’t cave to parental or peer pressures
You aren’t compromising your child’s future if you don’t buy every new gadget that claims to make your baby smarter, less fussy or a champion sleeper.
You can find amazing second hand bargains on your highstreet and online, for things like high chairs, stair gates, cribs etc (although mattresses and car seats should be new).
In our experience, family, friends and even friends of friends are willing to pass things on to help out, even if the item is on loan!
Try to increase your emergency savings
Unplanned expenses are even more likely to crop up with a baby. Those bottles you spent hours researching? The baby won’t take to them. Or the buggy you tried out at the store and seemed easy to use at the time just is too heavy and frustrates you every morning.
Make sure you’ve saved in the run up to the baby arriving and have at least six months of expenses saved up.
Having extra money stored away can also help make the transition back to work easier – and this time comes around much faster than you imagine it will.
Don’t buy too much house
It seems that we are under increasing pressure in the current modern world to have more space and multiple rooms, when years ago sharing a room wasn’t uncommon for children. The decision to start a family is often preceded by purchasing a house, but many new homeowners don’t take into account the future expenses they incur after having a child, combined with higher mortgage payments.
Make sure you don’t over extend yourself financially and that even if interest rates go up dramatically you can afford the roof over your heads.
Don’t miss out benefits
Make sure you claim your Child Benefit as soon as possible. There’s no limit to how many children you can claim for. Only one person can get Child Benefit for a child. If you or your partner’s income is over £50,000 you will have to pay a tax charge if you receive benefits.
However, we recommend that even if this is the case, you make a claim for Child Benefit, but choose not to receive it. This is because:
- it will help you get National Insurance credits which count towards your State Pension
- it will ensure your child is registered to get a National Insurance number when they are 16
You can find our more here: https://www.gov.uk/child-benefit
Start saving for their future
Waving your child off to university or seeing them buy their first home seems far into the future when you’re just trying to make it through the day with a new-born, but you should try and start saving right away – especially if they are gifted any money by their Grandparents or friends of the family.
A Junior ISA, or JISA, is one of the best ways to do this as it allows relatives to build up funds tax-free until your child turns 18. The earlier you start saving – even if it’s a small amount – the better.
Don’t stop funding your own savings and retirement
It can be tempting to redirect money you are currently saving for your future to help make ends meet post baby, but try and avoid this. Your future security will be vital for your children as they grow up and is just as important. Try to budget and do without some discretionary items now, such as unnecessary clothing or a 2nd trip away, for the benefit of all your futures.
Make a will
When you have a child it’s even more important to make sure you have a Will – because you will need to appoint a guardian to look after your child(ren,) should something happen to you.
Get it written as soon as possible as there is no need to name children and it can be made before they arrive!
Magenta is very good at helping clients to budget and organise their financial affairs most efficiently. If you need help, please feel free to call for a friendly chat.