Having children is a blessing, but it’s not always a blessing for your bank account. More children equals more money to spend every month on clothes for a growing child, their food, their medical needs – the list goes on. Understanding what changes in your finances is so important because as much as your world will change when your baby comes along, your finances will change, too. You may be planning for things like diapers and formula if not breastfeeding, but you should also be planning for a myriad of other costs that will need proper planning before your baby arrives.
Debt is not the ideal thing to be in when you are planning a family, and you may have to consider what is an IVA and what is a debt management plan before you go for it. However, all things financial can be managed and you can start working on ways to plan your budget properly before your new little life arrives. You have to change the way in which you manage your money when you have children, and so let’s take a look at a few ways your budget will change.
- Costs of childcare. Right now, you may not have any childcare costs in your life, which means that you can’t truly appreciate how much a child can cost. If you are planning to go back to work before your child grows up and turns school age, then you have to work out the cost of a nursery or a childminder to watch your baby for you. Depending on how many hours a day you need, you may find this to be one of the biggest expenses that you have. Childcare costs vary from place to place depending on whether you live in a city or a town, how many hours of childcare that you will need and whether you need part or full time care.
- Private health costs. Your health insurance costs will change when you have a baby in the family. There are plenty of healthcare plans that will cover your baby, but you should always check. People in the UK tend not to have private health insurance but those who do want access to the very best. If you do have a private health insurance plan, your costs may go up with the added family member to your plan. Otherwise, you’ve got the good old NHS to help!
- Education savings will be a consideration. Are you planning to send your children to private school? It’s likely not going to be the case but education isn’t just about private schooling. University costs are expensive and if you can save your children the future of student debt, wouldn’t you want to? Saving for their university fees or spending money instead of them taking out loans and grants will change everything. Not to mention that before they even get to university age, you’ll be paying for school uniforms and bags, stationery and more – it’s all important to ensure that you have a backup of savings before your child is school age. This way, you never have to be out of pocket if something goes wrong in life.
- Added baby costs. You never had to add nappies and formula to your grocery shopping before. You didn’t have an extra mouth to feed before, either. You should consider all of the added costs that are going to be included in your new budget, and you should plan around them. If you know the budget will be too squeezed with formula, then look at breastfeeding and ask for as much help as possible to help you to achieve it; it’s free. You could invest some money into cloth diapers and then keep up with washing them, which will cost you much less cash over time than disposable nappies that end up in landfill. You can do the same thing with cloth wipes, too, and save the planet and your wallet on baby wipes or cotton balls.
- Your mortgage or rent may change. Are you currently living in a studio property or a one-bedroom home? You may want to upgrade your home to two bedrooms for when the baby moves out of your bedroom and into their own space. Babies need to sleep in the same room as you for six months at a minimum, but after that more space is often a good idea. You need more room for their things, to move around once they become mobile and often it can help to have a rocking chair in a separate room so that you can soothe your baby without having to interrupt your partner. You can always manage in a smaller property, but a baby can often propel you into that bigger place and sooner. Your costs may change and it’s a good thing to include in your budget.
- Life is going to shift in a way you didn’t know it could. Having a baby means that you may pay for more streaming services for those long night shifts. You pay more on your electric and heating bills when there is a baby in the house. Before, if you have a lack of cash you wrap up and you bear the cold evenings. With a baby, it’s not an option. You also have costs like somewhere for them to sleep to consider and while a baby shower can get you a lot of what you need for your baby, not everyone likes to have a baby shower. It’s important, then, that you are aware of what you need to pay for. Babies grow really quickly, so paying for clothing may be more frequent and expensive that you considered before.
The changes to your budget may not be massive at first, but when you’re on a lower income and have debt to handle at the same time, the costs for a baby can become too much. Getting your finances in order as early as possible is so important when there is a baby on the way. The last thing that you want to do is miss out or feel stressed: a baby is a blessing and shouldn’t be a stress for you.