If you’re expecting a baby, it’s just as important to start planning your finances as it is to have baby grows and nappies. This will make any adjustments to your life a lot easier, instead of you trying to figure everything out once your baby is here.

Having a robust plan in place will ease initial stress, giving you reassurance in how stable your finances are and how you’ll afford your monthly outgoings.

 

Change of priorities 

After having a child, your priorities will often change a lot.

You’ll likely spend more time thinking about the future, as the decisions you make will affect your child too.

Expecting a new baby can be a prompt to save and budget for your future, which will be beneficial in the long-term, as you will have money saved up for when you need it and won’t have to worry as much about providing for your child as they grow.

How does it impact financial planning?

Having a child will affect your financial plans in many ways, one key way being increased monthly – or even weekly – outgoings for essential items, such as nappies, food and clothes. Making sure you have all these things – and more – in your budget is crucial.

When a new baby’s on the way, it’s more important than ever to revise your monthly budget and stick to it. When creating a budget, you’ll need to calculate your income before creating a list of monthly expenses – this will include essentials, savings, bills and all other costs. When you first have your child, keep track of how much you’re spending weekly, so you can create a realistic monthly budget as soon as possible.

You may also need to revisit – or even create – your will, as having a baby can invalidate your will. This will make the process easier if anything was to happen to you, as it sets in stone where your finances and assets will go. This will also allow you to set out legal guardianship of your children if the worst were to happen.

 

Working after having children

Going back to work after having a baby is never easy, for anyone. It can be hard to let go of the time where you’re spending all day, every day, with your new child. However, going back to work is often a key part of supporting your child’s future.

Lots of parents would agree, one of the biggest struggles of returning to work after having children is childcare. If you’re planning to go back to work before your child is at the standard nursery age of 3 – as many parents do – you’ll have to pay for private childcare, and this can be a huge financial burden, with childcare costing UK parents on average over £250 a week for a full-time day nursery.

Shopping around for childcare can help. You want a safe and friendly environment for your child, but it’s also important you’re not paying more than is necessary, as this can restrict your income further and affect how much you can afford to pay for other essentials. This could mean you use one type of childcare for your child – such as a day nursery, creche or informal childcare – or a mix to best suit your finances.

Funding education

One of the most expensive things your child may need from you in the future (and it might seem like a lifetime away!) is university tuition. This expense can be a real burden on parents who haven’t thought about it before the time their child needs it.

Even though a large amount of university fees are supported by the government, there is still often a large sum – such as living expenses – left for parents to support their child in some way.

If you’re able to, it’s important to start saving and planning for this early on in your child’s life, as it can take away a lot of that stress for you and your child later on. Your child may choose not to go to university, with more and more alternative education opportunities available, however these savings could be used to support them in other ways further down the line.

For more information on budgeting to support the arrival of a new baby, book an appointment with us.

Disclaimer: Whateley Wealth Management is not responsible for any external site content.

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