Are you financially prepared for your new baby’s arrival?
15 April 19  /  Insights

The arrival of a new baby is an exciting time, with few life experiences or events more rewarding. It’s also a time of increased expenditure, with few new parents realising just how expensive babies can be.

A recent study reveals that 54% of parents-to-be believe the first year of a child’s life to cost around £3,800. The actual cost could be as much as four times that amount! The study also found that 57% of parents regretted not taking better care of finances in the first year of their baby’s life.

To help with budgeting and general ‘new baby’ finances, here’s a helpful checklist:

Household income
Work out how much your new baby will impact your household income. Check how much maternity or paternity leave your employer allows you to take, and how much leave is with full time pay and how much with a percentage of your wage. When this leave is over, decide what you will do. Will you return to work? If so, do you have family or friends close by to assist with childcare, or will you need to budget for nursery care? Also check out how much Child Benefit you’ll receive from the Government.

Essential items
You’ll need to budget for big items, like a crib or cot, pram, pushchair, high chair, baby stroller and so on. You’ll also need to factor in increased weekly costs, as you purchase nappies, wipes, baby clothes, baby food and formula feed. All too quickly, these costs will change to first foods and toddler clothes. Check out stores where you can buy in bulk, as it could save you quite a bit.

Health insurance
If you have private health insurance, find out how much it will cost to add your child to the policy. You should also check whether your policy provides cover for the birth, including prenatal care, labour and delivery.

Keep saving
Try to put an amount each month into a savings account for your baby, to help with long term costs, such as college or university fees. Also try to build up an emergency savings account to help pay for unexpected costs. A baby will impact your weekly/monthly spend more than you realise, and you’ll have far less disposable income to play with!

Take care of documents
You and your spouse should update important documents, such as wills, trusts, insurance documents and investment accounts, including your child as a beneficiary. It’s also a good idea to order some extra copies of your child’s birth certificate, to keep safe for future use.

Don’t forget your retirement!
Don’t neglect your usual savings, investment and pension activities. If possible, keep automatic contributions going into savings and investment accounts. These are the accounts that will provide an income in your retirement years. It might seem a long way off, but you can’t start saving soon enough – and you can’t rely on your child to take care of you in your old age!

Having a baby represents a huge change in lifestyle, impacting every area of your life. One area where can help you is the financial side of things. Whether you’d like to discuss your savings, pension, and investments or preparing for your baby’s financial future, our Lifestyle Financial Planner will be happy to assist.

To find out more, please call us on 01865 208000 or email info@mathewscomfort.co.uk. (And don’t worry about getting a babysitter, we’ll be delighted to meet your new addition!)

Source:
ROLA: The Smart Parent’s Guide to Preparing Financially for Your New Baby’s Arrival
www.nerdwallet.com/blog/

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