Family Finances: Baby Budgeting For Your New Arrival

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Pregnancy is a wonderful time for most families. There’s nothing more exciting than growing your family, and knowing that in a few short months you will have a beautiful bundle of joy in your arms that will change your life forever. However it’s not all sunshine and rainbows, there’s a lot of practical issues when it comes to having a baby, and your finances are just one of them. Thankfully you have nine months to prepare, and to get yourself in the best position possible for when they arrive. Here are some points to bear in mind when it comes to budgeting for a baby.

Living Situation
Do you currently live in a place that’s suitable for children? If you’re in a one bedroom apartment or a place where you have to climb loads of stairs to access, it’s going to be best to move. This is a huge expense within itself, not just due to moving costs but because you’ll likely need to upgrade to a larger place. You will probably want a nice area with good local parks and schools, and a back garden for your child to play in when they get a little older. A nice, stable home where you can put down roots with your family is so important, so this is a cost you will need to consider. You might need to sell up, or search for a new rented property depending on your current situation- so work these fees into your budget. As well as a new home you might even need a new car too. Lots of people change to more family friendly car models when they have a baby, ideally you need something big enough with five doors so you can get your child in and out of their car seat.

Work, Maternity Pay and Shared Parental Leave
One of the big questions after having a baby is deciding how much time to take off work. While many new parents would love to have as much time as possible to look after their new arrival, your financial situation might mean that you both need to return to work fairly soon after having a baby. It’s the law that a birth mother takes a minimum of two weeks maternity leave after having a baby (four weeks for factory workers). However did you know that the remaining fifty weeks you have can be shared between you and your partner? This means childcare can be split, you can return to work earlier if you want to and they can stay at home with the baby for longer if they want to. There are of course some rules and restrictions surrounding this, but you could find out more here if it’s something that would benefit you.

Childcare Costs
Once your maternity or parental leave is over, the big issue to consider is childcare. If you’re lucky enough to have family members willing to help then this will make life much easier. If not, start looking into childcare options early on to work out what’s best for you. As well as the cost of the care itself, you will need to factor in time and money for transport/ fuel there and back so it’s a big decision. Depending on where you live you may be entitled to some free childcare or free early education for your child, so make sure you find out what’s available to you. In the UK, many working parents of three and four year olds are eligible for thirty hours of free childcare a week (was previously fifteen), for thirty eight weeks of the year. If you’re entitled to the childcare part of working tax credits, this can cover up to seventy percent of your childcare costs too which is a massive help. Some employers even have workplace nurseries, they may be free or paid for but either way are a tax free perk of the job.

Benefits and Extra Help
As well as benefits to cover childcare, most people in the UK are entitled to child benefit. For the eldest (or only child) you get roughly £20 a week, and for additional children you get around £14. While it’s not a huge sum of money, it’s a little extra help that’s there if you need it and can be worked into your baby budget. If you’re out of work when you have your baby, you may be entitled to income support until your child is five if you’re a lone parent. Exactly what you can get depends on a variety of things, your midwife should discuss all of this with you at your appointments during pregnancy.

Saving Money
If you’re planning to have a baby, getting some savings behind you and putting money away before getting pregnant makes the most sense. You could start a savings account, and transfer a portion of your wages into it every week. You could sell items you’re no longer using, or start a second job from home to earn a little extra cash. Blogging, design work, an Etsy shop can all bring in some money if you have the right skills. Paying down debts so you’re in the best financial position possible is also a good idea if you’re in a position where you can do that. That way you at least have the cash to make the purchases below up front.

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Photo link: Pexels

Buying Baby Items
There are a few large purchases you need to make when you’re having a baby. A cot and nursery furniture, a pram and a car seat to name a few. Then you need clothes, baby products, toys and everything else that comes along with a baby. Write a list and set a budget and then work from there. If friends and family offer to help, you can show them the list so they know exactly what you need. It also means that you don't accidentally buy items repeatedly and waste money and it’s far easier to keep on track.

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