Congratulations! The patter of tiny feet is on the way, and there’s a lot of planning to do before the new baby arrives.
One thing that you need to think about, especially if this is your first child, is how your finances will change after you’ve had your child. A lot of this will depend on your own personal circumstances – but here are a few important things to think about to help you start planning ahead.
Calculate what your reduced income will be
Most people will have to survive on a reduced income after the baby is born, as one or both of you will be on parental leave which usually means less income than you’re used to. Take the time to calculate what this reduced income will be. You could even practice living off this income now, and save what’s leftover. That’s a great way to get used to your new budget whilst also putting money away for all those baby essentials. Speaking of which…
Budget for your one-off items, and aim to buy them gradually
Make a list of all the big one-off purchases you’ll need to make as early as you can. This means things like the pram, car seat and crib. Work out how much each one is going to cost you – and don’t forget that you can often buy second hand items that are in good condition and perfectly safe. Friends and family will sometimes club together or contribute money towards a big ticket item, but if you’re buying for yourself then it’s a good idea to spread the cost by buying these individually, rather than in one big spree.
Remember that the costs will start before the baby is born
Pregnancy can be expensive too, as you’ll need to consider things like maternity clothes as well as comfort items such as body pillows. If you’re still in the early days of thinking about pregnancy, make sure that you factor these in when creating your budget.
Think long-term, too
While your main priority should be planning how to cover the baby costs, you should also spare a thought for the expenses that will come further down the line. From extra meals on the table to hobbies and activities, there’s always going to be another reason for you to spend out on your kid. Make sure you know what these costs will be, so that you can start to consider how your income will cover them.
Make sure you’re claiming any money you’re entitled to
Use the government benefits calculator to work out how much you could be claiming. Aside from child benefit, there are several other family benefits that are designed to help ease the cost of raising children. Things like free school meals, for instance, can be an essential part of budgeting if you’re below a certain income threshold. There is more information available here.
Budgeting for your new born might not be top of your priorities right now, but if you leave it too late then you’ll end up regretting it. It can even become quite a relaxing process, giving you a chance to get excited about the reality of the new life that’s on the way, and helping to ease worries about how you’ll cover the costs.