Guest post by personal finance expert, Gabby Revel
You’re having a baby! Wonderful news. There’s so much to think about, particularly if it’s your first.
In the hustle and bustle of preparing for your new baby, it’s easy to neglect some of the more mundane but equally important practical issues. And that means looking at your finances. You need to take stock and secure baby’s financial future, as well as your own. Here’s what you need to know.
What do you have?
You may already have assets on which you can build. Do you own your own home? If so, how much do you owe on it? What else do you own? What do you owe?
If things seem a bit on the “We owe too much” scale, consulting with a financial advisor is a great way to come up with a personalised asset management plan to administer your money and get out of debt faster. There are also investment books and online resources available to help you manage and grow your money.
What do babies really need?
Liverpool Victoria Insurance estimates that the average cost of raising a child from birth through 21 years of age is £222,000. That’s an all-time high. Most experts agree the upward trend will continue, some predicting the cost could reach £350,000 by the year 2023. That is a staggering amount.
With every new baby comes the desire to spend. As a parent, you want the best for your baby, of course. But, if you don’t buy the pram with pneumatic tyres, will your baby care? Not likely. And what about all the toys in the shops? Shop merchants will do their best to convince you to buy this toy for baby’s development or that toy for physical growth. It’s their job to convince you to buy. It’s your job to think before you spend.
Safety is always a top concern, but shy away from unnecessary major purchases.
Plan for your time off
Having a child means taking time off work. That doesn’t start and end with baby’s birth. Mums and/or dads will have to take time off when baby is sick or when child care falls through. As children get older, long school holidays mean you have to either take time off work or pay more for child care. If you haven’t already, start a savings plan now to carry the family through.
New baby financial checklist
- Check your eligibility for maternity leave pay at UK.gov.
- Talk to your employer about the time off you’ll need, the possibility of adjusted working hours and whether or not the employer offers child care vouchers.
- If you are a lower income family, calculate child care tax credits for which you may be entitled at gov.uk.
- Obtain life insurance. Life insurance protects baby if something happens to you.
- Save by purchasing only what the baby really needs. The bells and whistles are fun, but college tuition fees are not.
Now is the time to save for baby’s future—before he or she even gets here.
Post written in collaboration