8 ways having children will make you change the way you spend money

By Jenn Taft

How does your spending change once baby arrives? Find out how you can prepare financially for a new bundle of joy.

It’s no mystery that babies are expensive. With the cost of raising a child over their lifetime coming in at around £250k it’s no wonder parents want to manage their finances better.

Expenses are expensive!

Of course your outgoings are going to change! You’ve added another human being in to the mix who comes with their own set of requirements. From clothes, furniture, food and travel equipment, this tiny little person sure knows how to add to your finances!

If you have a baby on the way make a list of everything you think baby will need on a monthly basis and work out how much that will cost you. By doing some research early you can be better prepared for the costs when they arrive.

What do you really need?

Don't buy everything!

There are some key pieces of equipment and items that you'll need but there are also some that can wait until you feel you really need them. There is no harm in spoiling your child but if money is tight and you want to be careful then do pay close attention to what you are buying.

If you need a little help staying in control then take on board this advice from the Money Advice Service.

Who will look after your child?

It's well-known that childcare can cost a lot of money and can be hard to plan for.

I pay £42 a day for my childcare in the West Midlands, but closer to Birmingham this rises to roughly £55 a day, and in London it can rise well over £60. This is a lot of money, especially if you return to work part-time and so are already taking a pay cut.

To decide whether childcare will be expensive it's worth looking at the balance of days worked and the pay you receive. Obviously, if you can get any help from family and friends for free then take it!

Want to know how much childcare costs in your area? Have a look on Childcare.co.uk and if necessary phone some of the local nurseries it suggests and ask.  

This is the rainy day you’ve been saving for

There will be times when you just can't save like you did before you had children. But times like these are what saving is for.

I saved when I was pregnant with my first and used the whole lot when on maternity leave. That's ok because that's what I had it for! I then built my saving back up before my second arrived and used that again during maternity leave. I'm now back at work and saving again, so a lapse in savings is not the end of the world.

Let's face it - what are you saving for if it's not the times when you need it most?

Need help saving? Have a look at these tips for saving for maternity and paternity leave.

Will the kids be alright?

Life insurance is important if you worry at all about what would happen to your children if you were to pass away. I know that may seem morbid, but this little person relies on you for everything – if you are not there who will be? And how much will be available to help raise your children in your absence? If you have a mortgage, will it be paid off?

You should also consider Critical Illness Cover and Income Protection, both of which will provide cover for possibilities such as long term illness or injury that could affect your ability to work and earn. Thinking about these situations is key when expecting a family because you are no longer just providing for you.

Lastly, do you have a will? If not, get one. Knowing your children’s care is decided and your belongings will be taken care of should anything occur is reassuring. Speak to your solicitor and make these decisions so others won’t have to.

If you want to understand life insurance better then look at some life insurance tips for new parents, and plan your finances carefully for your babies should the worst happen.

Is it time to move?

It is a little clichéd but it is quite impressive how many couples buy a house when they find out they are pregnant or just after they give birth. Not only will children make you think properly about how suitable your house is but will also make you look towards accommodating them in the future.

I moved house just before my first was born and although it was a busy time it was also exciting to see a fresh start for us as a family with all the space we needed. It was also good to take into consideration the schools in the area we lived, so we knew we were covered when we had to apply. All the space we needed and the right schools made for a great move.

It’s important to take care when moving, but if you sensibly know your limits have a think about whether a move is necessary for you.

Do you need to spend your money?

Children are a great way to realise what you do and do not need to spend your money on. You might have changed your working hours, you might be a stay at home parent, or you might just be finding the extra outgoings hard, but reigning in your spending will help you hugely.

I know my spending habits changed after having children. If I need anything I check whether I can get it second hand first on sites like eBay or in local charity shops, and after that will search properly online to find things as cheaply as possible. That might seem like hard work but when you don't have as much money to spend you’ll want to spend it well.

It’s worth noting that hopefully this frugal attitude won’t be necessary forever. Certainly, once your children go to school and the childcare cost goes you will have more expendable money to play with. Make the changes now so that that time is even more satisfying when you get there!

There is some good news!

There is a good change to your monthly money; you'll receive child benefit! If each parent earns less than £50k a year you are entitled to child benefit. This equates to £20.70 a week for your first child and £13.70 a week for any subsequent children. The date on which this is paid each month can vary , and with each local council, but it is a welcome payment! That money can cover food, clothes, medicine and toys for your child each month, so really does help you out massively.

Want some help sorting out your finances with a baby in the picture? I find the Money Advice Service to be honest and helpful, and their advice is usually just what you need to hear.

Author bio: 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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