How will your finances change with a baby on the way?

By Jenn Taft
1

When there’s a baby on the way it's worth working out how your finances will be affected. Ignore it & it will catch you!

When you find out you’re expecting a baby your finances might not be of a great concern. The big picture needs looking at though - they may be little but a baby can change your finances massively!

So what simple changes can you make to help you out?

What do you really need?

What you need and what you want realistically are greatly different things! Without a bit of thought it would be easy to over spend on things you may never use.

I know I wanted a matching furniture set in my first baby’s nursery but the reality was that such items would have totalled about £1000. If you can spare that money, great! But if not then realise that second hand furniture is a real winner. I managed to kit out my daughter’s room with a beautiful pine wardrobe, cot, storage unit and changing table for less than £100. It looks beautiful, does the job and cost a fraction of the price because I took the time to scour eBay and charity furniture warehouses.

For a great list of what you might need have a look here. It’s quite a full list so think carefully about whether you need everything on it, but if nothing else these ideas could fuel your hunt for the best bargains while pregnant. Have a look out for baby events at supermarkets as deals and bulk buys could save you a small fortune.

How is your pay looking?

Take the time to look up the maternity/paternity policies for your place of work. Knowing exactly what you are entitled to from your employer will go a long way to help you plan for your baby’s arrival. You are entitled to 52 weeks leave regardless of how long you have been in your job, and you are eligible for up to 39 weeks of pay dependent on your service. That’s not to be sniffed at so ask what you will be able to receive as soon as possible. Speak to an HR representative if you can as they will have the knowledge to be able to break down your circumstances and how you will be paid if you take leave.

Time to save.

It can’t hurt to have savings in place for when your baby arrives. If you don’t save much then look over your outgoings and reduce them so that you can put any money you can into savings. You could also reduce your debts, or look for ways to boost your income. Having savings will give you peace of mind and will allow you to enjoy the time you have with your baby. Anything you can do to put money away ready for their arrival is worth doing.

Need help starting your savings? You may be eligible for a Sure Start Maternity Grant of £500 so check the eligibility criteria.

Are you insured?

Life insurance is certainly worth taking out when a small person is on the way. There are many who have never and will never take out life insurance, but I can vouch that the peace of mind it brings definitely feels worthwhile.

As parents you would apply for separate policies to accommodate your personal health needs, but ideally each policy will cover similar points. I know for me and my husband our life insurance policies will help pay off our mortgage if something happens to one of us and will help to pay for bringing up our children, loss of earnings etc. There are also conditions should something happen to both of us, meaning our children will be well taken care of.

Isn’t it worth putting these safety nets in place just in case? Speak to a financial advisor if you are unsure what you are looking for – they could be hugely useful when making an application.

What help is available?

It is well worth your time looking here for what the government can do to help you when you become a new parent. From benefits to tax credits, savings options and childcare support, you would be hard pressed to find nothing of use!

When registering the birth of your child you will also most likely fill out the forms for child benefits. For your first child this is £20.70 per week, and £13.70 per week for each child after that. This is hugely useful, because it can pay for toiletries, food, milk, clothing and many other things that a baby needs each month. It’s free money, so make sure you apply for it – it’ll pay out until your child is 16 years old!

I also use childcare vouchers provided through my employer to give me a reduction in my childcare costs. My employer pays a portion of my childcare costs before tax is taken from my pay, and I pay about two thirds of my costs this way. Knowing this money is taken care of is one less thing to account for, and the saving is welcome!

Top Takeaway

Get your outgoings in order – use an app or a spreadsheet to help you see where your money goes each month

Start saving! Open a separate account and put a percentage of your pay away every month

What are you entitled to? Check with your employer what you can get in terms of pay and leave and check what government schemes you are eligible for.

 

By Jenn Taft

Jenn is a freelance writer and physics teacher from the West Midlands. She has a love of writing about personal finances, especially how they change when you become a parent, and enjoys the honesty that such writing brings. When not writing, teaching or being a mum, Jenn loves nothing more than indulging her love of hospital and police based documentaries, and cake.

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