Advice on arranging your finances and budgeting for the arrival of your baby with tips on saving money, reducing your debts and the cost of your outgoings.
As I'm sure anyone with children will tell you, baby's are expensive little things and many parents-to-be find themselves stressing about how they will shoulder the increased financial responsibility. Regardless of whether you or your partner are planning to stay at home with your baby and having to cope on a reduced income, or whether you will both return to work and have to finance the cost of independent childcare, the key to managing your money once baby arrives is planning.
Whether you are trying for a baby, nearing the end of your pregnancy or already have children, spending a couple of hours taking a realistic look at your finances can be hugely beneficial in helping you to prepare for baby's arrival. Here is our guide to saving for your baby.....
- Be honest - The only way you can get a realistic picture of your financial situation is by being honest about how much you spend and how much you owe. The best way to do this is by gathering together all of your current accounts statements and receipts from the last couple of months and working out your average monthly expenditure. Remember to include things that are taken out annually such as insurance as well as cash withdrawals and smaller items such as cups of coffee.
- The workings -Take a piece of paper and write down all of your monthly incomings and outgoings as well as how often they happen and the interest rates that you are paying on any debts. If you are unsure about any of your outgoings then its always best to overestimate. You should then sum your incomings and outgoings respectively so that you can get a clear picture of whether you are spending more than you earn. Regardless of whether you are in the black or the red there are always savings to be made, now that you have a list of your income and expenditure you can identify key areas to target.
- The basics - When looking to cut your expenditure the first place to look is at the basics such as accommodation and insurance. If you are a homeowner then it would be well worth taking a look at whether its possible to make a saving on your mortgage especially if you are currently paying a lenders standard variable rate. Looking for cheaper insurance for your car, home and pets is also a really simple way to save, as is comparing potential savings on utilities such as gas, electric and water. Thankfully there are a range of financial comparison sites that make searching and applying for new financial products much simpler.
- Tackling debt - If you are carrying outstanding balances on credit cards or loans it can be worth looking for a more economical option especially if you are paying a high rate of interest. For instance, many credit card providers are now offering 0% balance transfer offers to new customers and for some this can provide a good opportunity to clear as much outstanding as possible. One word of warning though, you should always read the small print including any restricting terms and conditions before moving your finances so that you can be sure that you will actually save money.
- Maximising income - With a baby on the way increasing your incomings may seem really unrealistic especially with maternity leave looming, its the perfect time to find out about entitlements and benefits you may be eligible for.
- Cutting the cost - When you look at your finances its always amazing how much you actually spend on necessities such as food and cleaning products. By planning your meals, making more home cooked food and going for more economical choices its really possible to make huge savings on your household basics. Why not try swapping brand product for supermarkets owns and see if you can tell the difference.
- Learning to say no - While it can be tempting to buy as many cute baby items as possible before your baby arrives its a much better idea to only get the basics in advance, this way you'll avoid purchasing expensive baby items that you don't actually need. Its more than likely that you'll receive more toys, cute outfits and novelty gifts than you'll ever need once your baby arrives so learning to say no when your tempted to buy a non-essential can really help save those pennies.
- Say yes to seconds - If you're struggling to afford everything you need for your baby opting for second hand choices can be a great way to save money. This can be a great way to stock up on baby basics such as nappies, bibs and baby grows. When looking to buy nursery items such as cots second hand you should always check that they are in good condition and comply with current safety regulations. The only exception to the 'second hand is great' rule is car seats, it is always worth investing in a new one for your baby.
- Money for nothing - Why not have a big clear out and sell anything that you no longer need, not only will this make extra room for baby things but will also provide you with a bit of extra cash that you can put towards buying for your baby.
- Budget - Once you've taken a good look at your finances and have cut your outgoings on the necessities and basics, its time to create a realistic budget that allows reasonable amounts for living and entertainment costs but also allows you sufficient funds to meet all of your existing commitments and to put aside as much as possible for your baby's arrival.
- Start a nest egg - In the months before your baby's birth you should try to save as much money as possible and opening a high interest savings account will help you to maximise any money you manage to put aside. Starting a nest egg for your baby now will help you to manage expenditure later on.
- Regularly review - Its important to keep up your good spending and saving habits once your baby arrives, by regularly reviewing your outgoings and sticking to your budget you should be able to cope with any financial demands that parenthood throws at you.