Whether you’re discussing the possibility of raising a family with your partner or the bump is even beginning to show, it’s important you carefully consider your financial options. It’s no secret that raising a child is tiring and expensive work, but ultimately one that changes your life for the better. Therefore, it’s important you prepare accordingly and here are a few ways you can feel secure financially when that first born is excitedly on the way:
Look into the benefits you can receive
A little help goes a long way, so look into child benefit and determine how much you can receive. For example, your first born child entitles you to £20.70 a week – correct at time of writing – which amounts to £1,000 a year, a total that can’t be grumbled at. It’s important you make your claim before your child is three months old and will be received if your child is under 16 years or under 20 and in full time education.
We all have unnecessary expenditure, a shopping trip here, an unused gym membership there, but when a little one is on the way it’s so important every penny is meticulously considered before being spent. Remove any unnecessary expenses from your life and ensure you are only spending money on the things you really need.
Set budgets for monthly everyday purchases, such as groceries and toiletries and ensure you don’t exceed this, find better deals on mobile phone contracts and your utility bills and swap branded products for supermarket own to make some savings that can be set aside for when the baby arrives or to put towards a big purchase for your first child.
Set up an ISA
It’s important emergencies and large expenses are provided for in the future, which is why a high interest ISA is a good thing to set up to keep money aside for such occasions. An ISA is essentially a tax free savings account, with a yearly allowance on how much can be paid into it, and is a great way to invest your money with excellent rewards when it comes to interest over time. It’s a great way of financially preparing for future expenses for your first child and you can even set one up for them too.
Clear your debts
You don’t want to raise a new baby while worrying about knocks on the door from debt collectors, therefore it’s important you find a way to clear your debts. This could be simply taking a handle on your monthly repayments and negotiating with creditors or setting up a debt solution such as a DMP (Debt Management Plan) or if you have debts of £7,000 or more and can pay a minimum of £50 a month an IVA (Individual Voluntary Arrangement) is a potential solution.
Ensure you’ve checked your maternity pay
It’s a good idea to talk to your boss about maternity pay and what you are entitled to, receiving the right amount can help when the baby arrives and you have to give up work for a certain amount of time. If you are not entitled to maternity pay, then you could obtain maternity allowance instead and this can be claimed from 26 weeks of pregnancy, and is available for women who are earning less than £112 a week or are self employed.
Welcoming a new baby is an exciting stage in any couple’s life, just be sure to consider the financial implications and cover all the costs before that bundle of joy arrives!