For many of us, having children is one of life's great joys, but doing so can play havoc with our finances.
According to research by Loughborough University in 2018, the average cost of raising a child to 18 will cost couples an incredible £150,753.
The good news is that there are plenty of tips and tricks which can help you ease that financial burden so you can focus on your new bundle of joy.
Set a realistic budget to stay on track
Budgeting isn't a revoluntionary suggestion but it's a fantastic starting point to focus your thinking when it comes to the increased spending levels that you'll experience courtesy of your new arrival.
It's especially important if you're likely to have a reduced income during Maternity/Paternity Leave. Take stock of your spending and see where you can cut back, set some new ground rules and agree a weekly budget.
Try setting a separate 'baby' budget for all things like; nappies, food, milk, furniture and everything in between. It's easy to get carried away spending on new arrivals because of all the excitement, but setting a budget means you're more likely to focus on sourcing the best deals to keep on track.
A practical approach to buying for your baby
Buying your child a whole new wardrobe is a fun, but expensive away to go about it. This won't be new information - but babies do grow - so chances are you'll be spending cash on something adorable but unsuitable in a few month's time.
Recognisng that your newborn is going to spend 99% of their time in baby grows can save you spending your money on outfits that they'll rarely have the time to wear.
Reach out to your friends and family and take advantage of any hand-me-downs they can offer you. The NCT also runs a host of 'nearly new' children's clothing sales which are also worth a look.
Alternatively, make a baby wishlist for your friends and family. They'll likely want to buy you a little something when the baby arrives, so why not ask for clothes for 3-6 months old so you have things for them to grow into. Let's face it, you don't need 20 babygrows for the age of 0-3 mmonths.
Go for pre-loved larger items
Things like car seats, cots and buggies are real money-saving opportunities. These tend to be the more expensive options to buy brand-new but a quick scout on eBay will show you just how much cheaper you can bag these items for.
A lot of larger stores and supermarket offer discounts and vouchers on these larger items, so if you are keen to buy a new item for your little one then take your time to get the best bargain out there.
Explore childcare options
Thinking ahead about the costs associated with caring for your child if/when you go back to work. The decision is a big emotional, and financial one, so the sooner you get a plan in place the better you will feel.
There are many options when it comes to childcare, some are substantially more expensive than others so it's worth looking at all the available options. Here's just a few to consider;
- Registered childminder,
- Nursery and playgroup,
- Fulltime or part-time nanny,
- Family and friends.
You can get help to cover the cost of childcare from the government and your employer. To work out how much you can get, use the Childcare Calculator on GOV.UK. There are certain eligibility criteria you have to meet, and you can check these here.
Know what benefits are available
Child benefit is available for anybody who cares for one or more children under the age of 16 (rising to 20 if they are still in full-time education or training).
For the eldest or only child you will receive £21.05 a week, while for additional children you will receive £13.95 per week per child, though this will be reduced if one of the parents earns more than £50,000 a year, and potentially attract a tax charge.
It's worth applying as soon as the child is born, as it can take up to 12 weeks to process a claim. For more information you can check the Gov.uk website here.
Saving for your child's future
If you want to try to provide your children with some additional financial support when they get older, it's worth setting up a savings account in their name.
An excellent option here is the Junior ISA, which, much like the adult version, offers tax-free returns. You can save or invest up to £9,000 in one each year (though this limit will generally increase on an annual basis), and the money is locked up until the child turns 18.
Bear in mind that as the account will be in their name, that money will be theirs to do with as they wish once they hit 18 - you can't stop them splashing the lot!
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