Baby budgeting: the ultimate guide
Baby budgeting: the ultimate guide
Having a baby is one of life’s greatest milestones, whether it be your first child or another addition to your family. But as much as it’s an exciting time, bringing a new life into the world can come with a hefty price tag attached.
According to data from American Express, parents will spend around £1,500 on average preparing for the arrival of their little bundle of joy, and £442 million is spent by Brits in general on baby gifts for their friends. As such, it’s important to get your finances in order and be prepared well before you’re knee-deep in nappies, muslin cloths and prams.
That’s why we’ve created the ultimate guide to helping you save yourself some much-needed cash, avoid worrying about your baby budget and enjoy being a parent.
Maternity/paternity money plans
In the UK, how much leave you’re entitled to differs between the genders. Women are able to take maternity leave for up to a full year, whereas men are only entitled to either one or two weeks leave, which has to be taken all at once within 56 days of the birth.
There is also the option to share your parental leave. If you choose this option, you can share up to 50 weeks leave, but with only 37 weeks of pay.
It’s important to give your employer plenty of notice of when you are going to start your leave and check with your HR department in regard to how much your pay will be. This way you can plan for your parental budget in advance, which will also allow you to know how much to save in the lead up to the big day.
Sign up to everything that you can
In this current age, there’s loyalty schemes, points cards and discount clubs everywhere – including ones specifically for pregnant people.
Shops such as Boots and Mothercare offer clubs specifically for parents that come with multiple offers such as extra reward points on baby products and 20% off toys on your child’s birthday. You can also pick up a mum-to-be pack from supermarkets such as Asda or Tesco through pregnancy and parenthood advice company bounty.
These can be a great help in saving you valuable pennies in those nine months before labour and can continue to do so afterwards. The more you sign up for, the lesser the chance you have of missing out on a good promotion.
Check if you qualify for additional help
Depending on your situation, you may be able to apply for some extra help from the government. Every little helps, so it’s always worth checking if you qualify.
If you are already on benefits, you could be entitled to receive things such as Healthy Start vouchers to help you with your food costs. There’s also the option of the Sure Start Money Grant to help you to buy everything you need to get set for when your baby arrives. However, you will need to fit their criteria to be able to qualify.
It’s also important to remember that you are entitled free prescriptions and dental care from the NHS whilst pregnant and right through the first year of your child’s life. All you need to do is fill out a FW8 form, which is available from your GP.
Make your savings account your friend
We all know that savings is an important thing to do in case of emergencies. Well this becomes even more so when you’re pregnant as your income will drop whilst on maternity leave, especially if you end up depending on one wage instead of two.
Putting that little bit extra away each month will allow you to build up a nice little nest egg, which in turn will help you get by until you return to work.
It may also be worth looking to see if you can cut costs on any of your bills to give you even more money to either save or invest in items for your baby. One of the best ways to do this is to compare packages on things such as your broadband or energy to find the best deals.
Frugal Family Life
Benefitting from benefits
If you aren’t already claiming, you may find that you will be entitled to certain benefits once your child has been born.
Depending on your earnings, you may be eligible for things such as Child Benefit, Tax Credits (working, child, or childcare) or Tax-free Childcare. In order to check what you are entitled to, you can use the governments free calculator.
The rules and criteria for this will differ over time as the government make changes to legislation – so it’s best to check as soon as possible before you become ineligible.
Insurance is key
Having security for your family is extremely important. Should anything happen to you, life and home insurance will guarantee that your children and significant other are taken care of.
There a whole bunch of different types of insurance policies, and the price will change for each one depending on your situation. The best way to do this is to shop around and compare policies to find one that’s suited to you – and some even offer free gifts and discounts.
Another option that could help you, is income protection insurance. This is designed to pay you a benefit should you become unable to work due to illness or injury – usually for a set level of income (75% of your income before tax). This is normally paid out for an agreed amount of time or until you can return to work.
When it comes to your future, no one wants to think about the end. But making sure you have an up to date will can help to give you that assurance you need to know that your wishes will be carried out.
When it comes to doing this, you need to make sure you plan out who will be your child/children’s guardian should something happen to you before they reach 18. You’ll also need to make financial arrangements to ensure that they aren’t left without once you are gone.
You made your savings account your friend when you were pregnant, but what about once you’re a parent?
Continuing to set aside savings once your baby is born will not only help you to get by until you stop maternity leave but can also help you to prepare for their future as well.
On average, parents will spend £75,436 per child to raise them until they are 18. As such having saved for their whole life will allow you to help them when it comes time for them to go out on their own.
The best way to do this is check with your bank – or shop around with other banks – to find out the best options for you to save enough to cement their future.
If you’re struggling with your finances, contact us today on 0808 2234 102. Our friendly advisers are on hand to help you work through your money worries and offer you free help and advice – no matter what situation you’re in.
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