MyBump2Baby is proud to work with trusted financial advisers throughout the UK, raising awareness around the importance of protecting your family. To find your nearest local trusted adviser head to our family protection directory.
Having a baby is an expensive decision, as a new parent it can be extremely daunting to work out how much everything is going to cost you. That’s why at MyBump2Baby, we have decided to provide you with a list of 10 financial moves that you should make as a new parent.
Get a Will
It’s important to have a process in place in case anything were to happen to you. Along with where you’d like your money to go, your will should also state a legal guardian of your little ones, so you know they’ll be cared for in the best way. It’s a good idea to talk to the person/people that you plan to assign the role of legal guardian to, so that your will is easier to execute in the future should anything happen. A will can be updated at any time in the future, so you can add to it if you have more children or your circumstances change.
Invest in Life Insurance
If you haven’t already, then consider taking out a life insurance policy. It will help you and your family in the long run. As parents we pay for a lot of things, so it’s important to weigh up all of your financial responsibilities and consider how it easy it would be to take care of them in your absence.
Budget your income and outgoings
Set yourself a household budget. Many expenses come with a baby, you have to buy nappies, milk, clothes, prams, and many other things. It’s a good idea to budget early and unfortunately accept that you may have to lay off your favourite perfume for a while. Also think about the difference in ongoing costs and one time costs, for example, you’ll need to buy nappies for a few years, but a pram will be a one off purchase every now and again.
Have an Emergency Fund
Once you’ve worked out a new household budget for your family, you can build an emergency fund, which means you have a safety net just in case you suffer from a financial burden. You should aim to sort an emergency fund to cover 6-12 months of living costs. If your family is reliant on one income, we cannot stress enough how important it is to consider building up an emergency fund.
Track your Spending habits
Whether you’re going out for lunch next week, or you’re purchasing your baby’s first car seat, you need to keep your receipts and stay on track with where your money is going. There’s nothing worse than when you’ve forgotten how much you’ve spent and all of a sudden a whopping £300 leaves your bank account, so don’t fall into that trap.
Plan your maternity
Plan your maternity/paternity leave well. Work out how much leave you’re entitled to and have a good read for your company’s policies. It sounds boring but it’s actually really important for your household’s finances.
Prepare for the Worst
Add your child to your life insurance policy, it will help your child in the long run. It’s important because if anything were to happen to you, then you know that your child and your partner (if you have one) are not left in a bad situation financially.
Plan for childcare costs. If you’re working full time, it’s highly likely that you’ll have to pay for a nursery or childminder to look after your child. It’s important to ensure that your child feels safe in their nursery environment, so that should be the main priority for you. Childcare can be expensive, so you must research into what works for you.
Try and save some money up for when you retire. No matter what age you are, saving for your retirement is incredibly important and it means there’s one less thing for you to stress about when it does arrive. It’s helpful to have a savings account which you can pay into as well as your pension scheme.
Start saving for your child’s education. You might want your child to go into a private school, in which case you’ll need to research the costs that are involved with this process, and take into account that it’s not just a one off payment. Also, if your child wants to go to university in the future, depending on your household income, you may need to help them out with finance along the way. We know it may seem like a lifetime away right now, but they really do grow up so fast.
We really hope that our financial tips for new parents have been helpful for you. If you need any help, please visit the financial area on our website or don’t hesitate to contact us directly.