Becoming a parent is probably one of the most exciting times in your life. Soon, you’ll have a little one that relies on you for everything, and it will be your job to nurture them as they learn and grow. Unfortunately, it’s no secret that raising a child can be expensive (according to CPAG, it could cost £185,413 to raise a child to the age of 18), so as a new parent you want to do your best to minimise unnecessary spending. That’s why we’ve put together our top ten tips to help you manage your money with a little one on the way.
Budget, budget, budget
Expenses in parenthood quickly add up. Whether it’s all those nappies, clothes, baby food or the many other things that may pop up, you could find that you struggle to keep up with it all. The good news is, setting a budget (and sticking to it) can help you keep on track of spending. Not only that but having a budget can also help you to avoid ending up in debt and can help you to make the most of your money and maximise your savings. Every penny helps when it comes to raising your child!
Plan for a rainy day
It’s important to have some money set aside that can be used for a rainy day. That might be a time when there’s a loss of income, an accident, or unforeseen expenses like a broken appliance. Whatever it is, a rainy day fund can help you stay on top of finances in an emergency. The last thing you want as a new parent is to have a chunk of your monthly budget disappear when it’s needed most.
Start saving for their future
A three-year undergraduate university degree in the UK could set you back up to £27,750 as of 2021. And that’s just the tuition fees. When you add in accommodation, food, and other essential expenses, you could be looking at a lot more.
Of course, your child may not want to go to university but whatever it is they dream of doing will likely cost money, so having a dedicated fund is a way that you can help them to get started when they need it.
Apply for benefits and support
Having a baby is an expensive time, but there is help available. Make sure to find out what kind of benefits and support you could be eligible for before your little one arrives. For example, if you’re pregnant, you’re entitled to a year of maternity leave no matter how long you’ve worked at your job. As well as that, all prescriptions and NHS dental treatment are free while you're pregnant and for 12 months after your baby's due date. Children also get free prescriptions until they're 16.
Stick to the essentials when shopping
Impulse shopping is something we’ve probably all been guilty of at one stage or another. Maybe you saw something while out shopping and grabbed it last minute, or maybe you were up late with pregnancy insomnia and got carried away shopping online? It’s easy for this to happen but buying unnecessary items regularly could harm your budget and savings. Not to mention your house will be filled with clutter before the baby arrives! Try to stick to items that are absolutely essential and your purse – and house – will thank you.
Keep toys to a minimum
In all the new-baby excitement, you could be tempted to buy a lot of flashy new toys for their arrival. After all, you want your baby to have fun and have their mind stimulated, right? However, babies and young children are often more interested in the packaging of the toy than the toy itself. In fact, you could find that your baby prefers to play with your pots and pans and things around the house. So do yourself a favour and cut back on the toys until your child is ready for them.
Buy second-hand or borrow
Baby products can be expensive and usually aren’t used for very long. Ask around your family and friends to see if anyone has any baby products they can spare or no longer use. You could also ask to borrow items, like a pram or highchair. Remember to do your research when it comes to second-hand items. For example, it’s generally advised that you don’t get a car seat second-hand as they’re more likely to be older, have suffered more invisible wear and tear, and may not be designed to current safety standards.
Start thinking about childcare early
It can be difficult to think of childcare if you have only recently found out that you’re expecting but getting on top of it now could save you a lot of hassle (and money) down the line. Have a look at childcare centres near you and ask about the enrolment process. It could be the case that you have to be added to a waiting list, or if you wait until your baby is born you could find nearby centres are full and you end up paying more money for something less convenient.
Prepare for the unexpected
Becoming a parent for the first time is exciting, and it’s unlikely that you’re thinking about your own mortality when the focus is on this new life coming into the world. Unfortunately, life is unpredictable, and things can change quite quickly. With a little one on the way, it could be a good time to put a plan in place for a worst-case scenario.
Taking out a life insurance policy can help you to ensure that your family has some financial protection in place when they need it most, and you can have some peace of mind knowing that your loved ones carry on if you’re no longer around.
Write a will
One of the most important things you can do as a new parent is put together your will, if you haven’t already. A will is a way of deciding ahead of time what you want to happen to your money, property, and possessions after you die. It can also help you clearly set out who you want to care for your child if you or your partner were to pass away. It can seem a bit morbid to think about, but once you have a will in place, you’ll have some peace of mind knowing you have a plan.
One less thing to worry about
Managing your money can be a difficult task when you’re expecting. But taking small steps in the right direction now can help you stay on top of your spending and focus on what really matters – your new bundle of joy.
When it comes to planning for the future, we’re here to help. With Smart Insurance, putting protection in place for your family is straightforward. You can apply online in minutes, or if you’d prefer, you can speak to one of our friendly team who will talk you through your options.