Being a parent is truly an experience like no other. Whether you’d been planning to have kids for years or the pregnancy came as a surprise, the job is yours, and you need to step up to the plate. While kids make a wonderful change to your life, they can also cause a massive strain on an unprepared household’s finances. Due to this, it’s essential that you adopt a proactive attitude to managing your personal finances in order to provide the best life possible for you, your partner, and your children. In this post, we’ll go over some of the best advice for new parents trying to keep on top of their finances.
Assess Your Budget and Costs
If you haven’t had your baby yet, or they’ve only just popped out to say hello, then you need to assess your budget and costs as soon as possible. Yes, chewing over your finances can be painfully boring. Still, the sooner you tackle this, the easier things will be in the future. Planning ahead will help you work out what you’ll have to spend on essential baby gear, such as dependable pushchairs and child seats, and how much you’ll have left over to spend on some of life’s luxuries. You’ll also find it much easier to establish any kind of spending you can cut down on. Babies are small, but can be very expensive, and through smart planning of those first essential purchases, you’ll give yourself much more financial flexibility in the future. If you want, you can start planning further ahead for things like sports clubs and school uniform. However, the immediate costs that come with a baby should always take priority.
Open a High-Rate ISA or Savings Account
Having established everything you’ll need to buy for your baby, opening a good savings account will make things much easier to pay for them. The web is bursting with sites you can use to compare different ISA accounts, allowing you to earn tax-free interest on all the money you can afford to put away. The limits on what you can deposit vary from tax year to tax year, but any reputable cash ISA is always going to be better than most of the alternatives. If you’ve already opened one of these accounts and maxed out your allowance for the year, do a little research into other accounts you can use to save instead. If you’re still in the process of determining how much money your child’s upkeep will cost, then an instant-access account is generally the best option. These give you the freedom to take out your money whenever you need to, as opposed to ISAs.
Get Some Free Baby Gear
Once you have your baby, there are a lot of free things and entitlements you can take advantage of to help you cover the cost of raising your child. Many parents think that the difference these can make is negligible, but if you do enough digging, you’ll be amazed at how much easier these resources can make life as a new parent. Cashback websites, Bookstart packs, and parenting clubs can all be excellent sources of free and cheap things you’ll need. If you’re still expecting, there are also various ways you can save money before you actually deliver your baby, such as free dental care and prescriptions, along with antenatal classes.
Having leveraged all the childcare freebies that are available to you, you should move onto sourcing used baby equipment. Obviously, you want the very best for your child. However, used baby equipment is very rarely sub-standard, and it’s usually easy enough to tell whether or not a product is safe and practical for your needs. Buying used is especially handy when it comes to things that your baby will quickly grow out of, such as clothes and toys. After a quick Google search, you’ll be able to bookmark the best sites for purchasing used baby equipment, and the easiest methods of finding used baby-gear sales near you. Just make sure that some items, like car seats and pushchairs, are always bought new. These can be weakened with enough use, and may not be safe by the time you get them.
Get the Maternity (or Paternity) Pay That You’ve Got Coming
Do a little reading into your maternity or paternity rights enshrined by the government, as well as what your employer is offering. This will make it so much easier to ensure you get the pay you’re entitled to for maternity or paternity leave. There’s all kinds of things to think about when you’re having a child, and far too many parents let the details of their maternity or paternity leave go straight over their head. Let this slip through your fingers, and there’s a big chance you’ll live to regret it later.
Returning to Work? Ask About Vouchers
After your maternity leave is up and you need to look for childcare, it’s worth finding out whether or not you can acquire childcare vouchers from your employer. For some parents, in a household where all the adults are working, this has the potential to save you £1,800 on childcare costs over the course of a year. Here’s a handy guide to childcare vouchers you can read to learn more. Just bear in mind that using these vouchers can affect your entitlement to the childcare end of working tax credits, so be sure to read up on this first.
Look into a Nanny Share
Like many parents, you may be stuck in the difficult position of wanting to hire a professional nanny, but not being able to afford one. If this is the case, then it may be worth looking into a nanny share. This is basically a scheme in which separate families in the same area share the services of a single nanny. The nanny will either divide the time between the families in question, or look after the children from all the families together, allowing you to trim down the costs. If you’re working part-time, then try to simply bring up the childcare issue to other working mums. You may be able to work out a timetable for taking care of each other’s kids that works for both of you. Obviously, it’s a big step to let an acquaintance care for your child, but this can be the most economical option, and you might learn a thing or two in the process!
Save for their Future
You might feel like you’ve got enough on your plate already, but there’s a lot more work ahead of you as a parent! Pricey school trips, driving lessons, university, a gap year, it all costs money! By opening another savings account, specifically for your child, you can mitigate the strain of all these costs. Junior ISAs allow you to save thousands of pounds completely tax free, ensuring the money you put in works for your child as efficiently as possible. Again, like your own ISA, the limitations vary depending on the tax year. Do some reading on how junior ISAs work, and compare the best rates available to you. Again, if you max it out, there are child’s savings accounts for when your kid gets a little older. These are easily accessible, and can also present a great opportunity to teach your child about the importance of saving.
Take this advice, and you’ll make the cost of being a parent so much more manageable. The less you’re worrying about money, the more time you’ll be able to spend on the truly important parts of being a mum.