Budgeting tips are so important when you become a parent. Kids are expensive, there’s no denying it. Before having children, planning for your future seems pretty simple. Earn a decent wage, put money aside for emergencies, marriage and retirement, you’re good to go. But as soon as your new little bundle of joy comes around, you all of a sudden have a whole new set of bills and futures to think about.
It’s often easy to sit and wonder, ‘how am I going to do this?’. The best way to avoid giving yourself extra stress is to get your finances sorted from the beginning. If you start on solid ground, then the only way to go is up, so here’s my 7 budgeting tips for new parents.
1. Make sure your budget is solid
There’s going to be a long list of things you’ll need on a regular basis such as nappies, wipes, baby food etc., so having a solid budget is key. If you’ve accounted for everything, it becomes easier to avoid getting stuck should something happen.
There are apps out there to help you budget, such as Yolt and YNAB, but you can always go down the old fashion root of writing it down on pen and paper. There isn’t one right way to make a budget so just do what’s right for you.
2. Give your savings a boost
Now you’ve set your budget as a good basis to start from, it’s time to find ways to cut down spending and give your savings a much-needed lift. By giving yourself some spare cash to put by, you’ll have a nice little nest egg on the side to help you when on maternity leave or for bigger purchases.
3. Have a financial first aid kit
You never know what’s going to happen; should you become seriously ill or lose your job, then you want to make sure your children will be provided for, which is where a financial first aid kit comes in.
Also known as a rainy-day fund, putting money aside for financial emergencies helps you to be prepared for whatever life throws at you. It’s often advised to have enough to last you 3-6 months, but this isn’t exactly easy, so we advise to set smaller goals in order to help you reach this.
4. Do some research
Baby products aren’t cheap, especially the bigger items such as your pram or cot. But spending more doesn’t always mean you’re going to get the best quality and as such, it often becomes difficult to know how much to spend.
Do your research beforehand can be a great way to make sure you avoid overspending and can help you spread out your purchases throughout your pregnancy – which will ultimately give you better cash flow.
5. Insurance offers peace of mind
Everyone want security for their family, and should anything happen to you, having life and home insurance will provide this. There’s a whole bunch of different types of insurance policies, and the price will change for each one depending on your situation.
The best way to do this is to shop around and compare policies to find one that’s suited to you – and some even offer free gifts and discounts. Another option that could help you, is income protection insurance, which is designed to pay you a benefit should you become unable to work due to illness or injury – usually for a set level of income (75% of your income before tax). This is normally paid out for an agreed amount of time or until you can return to work.
6. Check if you qualify for benefits or support
You could qualify for some extra help from the government depending on your situation. Any extra cash is a blessing, so it’s always worth checking.
For those who are already on benefits, you have the option to apply for additional support such as healthy start vouchers or the sure start money grant. However, it’s important to remember that you will need to qualify to be entitled to these, which means you’ll have to fit a criteria.
You’re also entitled to free prescriptions and dental during your pregnancy and through the first year of your child’s life. To get this, you simply need to fill in a FW8 form, which you can get form your GP.
7. Deal with your debts
As a parent you already have enough to deal with, so you don’t need to be dealing with debts too. Money worries can distract you from the important things in life, and it’s important to make sure you have your financial priorities straight.
Make a conscious effort to clear as much of your debts as you can beforehand to allow you to focus on giving your child the best life possible. If you find yourself struggling to do this, there are options out there to help you pay back what you owe at an affordable rate – which you can find out more about online.
Being a parent is one of the best things in life you can be, so don’t let the thought of how much it’s going to cost get you down. We hope you find these tips helpful, and we encourage you to start using these budgeting tips today and find your way to a better money mind set.