Today I am delighted to bring you a guest post from mum’s mall on finance with a new baby. Enjoy!!
Having a baby is a joyous occasion that is not without its own stresses and strains. Finances can present a particularly large concern for new parents, especially as the cost of raising a child continues to climb. This guide is designed to take the fear out of financial planning with a new baby.
1. Examine Your Current Financial Situation
• Budgets, Maternity Pay, and Debts
2. Costs To Consider
• Where Your Money Goes For The Next 18 Plus Years
3. Seek Out Sources Of Financial Benefits
• Tax Credits and Grants
4. Save For Your Child’s Future
• Savings Accounts and Investment Schemes
5. Save For Your Future
• Pensions and Savings Accounts
6. Plan For The Unexpected
• Emergencies and Insurance
7. Shop Smart
• Second Hand Goods
8. Train Your Child
• Raise A Smart Saver and Spender
9. Reevaluate Your Financial Situation
• Returning To Work
Examining Your Current Financial Situation:
Start by formulating a budget based on the income that you would have once your baby arrives. Be sure to include all of your monthly bills and expenses as well as pocket money for entertainment and pleasure.
Talk to your employer now to find out what benefits you will receive, as far as Statutory Maternity Pay or Paternity Pay, and how long they will be paid. Many employers will pay over the legal minimum. If you are not entitled to SMP, inquire about other benefits that you may be eligible to receive.
Look for sources of waste and excess spending that you can cut out now to save money in the long run. Try to eliminate any existing debt that you have before your baby arrives.
Costs to Consider:
Raising a child is an expensive undertaking. Expenses will vary from family to family, so you will need to consider where you can cut back and save. Items that you need to plan for include childcare, schooling and educational expenses, food, clothing, personal care, toys, hobbies, bedroom furniture and accessories, recreation and entertainment, holidays, pocket money, driving lessons, and medical bills.
Check out any tax credits that may be available to you as parents. Government grants are available to assist you with heating and insulation improvements to your home as long as you meet certain qualifying factors. In the unfortunate event that your child dies due to stillbirth or neonatal death, financial assistance is available for you during this difficult time.
Saving for Your Child’s Future:
It is never too early to start saving for university and career training. Create a nest egg that can grow with your child. Other options include junior ISAs, children’s savings accounts, Stakeholder pensions, and stock market investment schemes. Ask grandparents and other family members to make birthday and holiday contributions rather than buying expensive presents for your child.
Saving for Your Own Future:
If there are gaps in your State Pension qualifying years, consider making National Insurance contributions to boost your State Pension. Look into the Pensions Advisory Service’s National Insurance contributions planner for assistance. If you have other pension schemes, be sure to check whether or not you can continue making contributions whilst at home with your baby.
If you do not already have your own savings account or investment scheme, now would be an ideal time to start paying into one. Small contributions add up.
Plan for the Unexpected:
Hope for the best, but plan for the worst. Start an emergency fund that you can dip into if needed. Consider various types of insurance to invest in, should you lose your job, become ill, or die. If you have not already drawn up a will, do so immediately to ensure that your child is provided for in the future. Look into life assurance and income protection plans.
Try to borrow baby items whenever possible and shop second hand stores. Many hand-me-down items are still in great condition and will save you a fortune on things that you will only use for a certain period of time. Do not cave in to the pressure to have all of the latest designer items for your child.
Train Your Child:
It is never too early to begin teaching your child to spend money wisely. Be a role model of good spending habits. As soon as your child is old enough, teach him or her how to put money in a savings account. Help him or her to understand the wisdom in sacrificing now to save for the future.
If you decide to return to work, look into childcare benefits, tax credits, and other financial assistance that is available to working parents.
Do not worry, panic, or stress over your financial situation. Set reasonable goals, and speak with a financial adviser if you need additional guidance.
This post was written as a guest blog post by mum’s mall – a specialist price comparison site for maternity products, toys, kids & baby clothes featuring over 50 online stores. Find mum’s mall on Facebook and Follow mum’s mall on Twitter.