Budgeting for baby – Plan ahead because they cost a packet!
It’s usually around the end of the first trimester that parents start to realise “this is really happening!” And suddenly you have to start thinking about some of the more serious issues connected with bringing a baby into the world: namely, they are EXPENSIVE!
If you’ve already started budgeting for your imminent family addition, you’re ahead of the game. But if you haven’t, now is probably a really good time to start.
If you are currently in work, you’ll have to take at least two weeks’ maternity leave after your baby is born, or four weeks if you work in a factory, so your income is almost certainly going to be affected.
However, by checking out our budgeting tips, financial worries shouldn’t give you sleepless nights and you should be able to enjoy the precious first months of bonding with your child without money worries clouding your thoughts.
Maternity Leave – What you are entitled to
In the UK, women are entitled to 39 weeks of statutory maternity pay (SMP) if they have worked for an employer for six months and earn, on average, at least £112 a week. SMP is paid as 90% of your average weekly earnings (before tax) for the first six weeks and then it will either continue at that rate or drop down to £139.58 a week for the next 33 weeks (whichever is lowest).
Start saving early
There’s no time like the present to start saving. Planning ahead as early as possible will help you cope and could even mean you have some extra cash available when your baby is born. A thorough budget and savings plan could also help you decide how much of your maternity leave to take because you can have up to a year off (if you can afford to).
One thing’s for sure: ignoring your finances until you’re 39 weeks pregnant is probably not a great idea. Now, at the end of the first trimester, could be the best time.
Check your spending – and we mean ALL of it!
Before you’ll be able to come up with an effective budgeting plan, it will help to work out exactly how much you are spending currently. Sorry if we’re stating the obvious here, but note down all your income and then take off everything that goes out regularly – not just food and bills, we’re talking nights out to the cinema, gym membership and regular trips to the hairdressers etc. Check your bank statements to find those things that are easy to forget (if you send flowers to your mum four times a year this could work out at something like £140 a year or £11.66 per month). While you’re on maternity leave, some of these non-essential items might have to stop (sorry Mum). It will also make it much easier to see where the necessary purchases for your baby will fit in.
If the sight of how much you are spending monthly/weekly acts as a shocking eye-opener, there are a few things you can do to help keep your bank balance looking a little fuller.
Small savings can fuel a big change
For utility bills, you could contact your suppliers to make sure you’re getting the best deal. Comparison sites are a handy tool to see if you could be getting your gas/electricity/phone/internet cheaper from a different supplier.
It might be that the weekly food shop is routinely draining your purse more than necessary. If this is the case, take a look at your receipts and try to see if there is anything you are buying too much of. Your high outgoings could possibly be due to buying premium brands. To help save money, why not try out the next cheapest brand. You may find that you don’t even notice a difference. And always keep an eye out for discounts and deals, but make sure they are a proper saving before buying ten yogurts to save 15p.
On that note, don’t forget to make full use of any vouchers, points cards, and loyalty schemes. This doesn’t just apply to food purchases; you can make savings on clothes, electronics, and homeware if you make the most of these schemes.
Many people will have hobbies and indulgencies that they spend a surprising amount of money on. Whether it’s going to the cinema or watching your favourite team, buying lots of clothes or video games, or frequenting restaurants or pubs, you may need to cut down a bit once you see exactly how much you spend each month. Obviously, starting a family shouldn’t mean you have to completely stop doing the things you enjoy, but it’s worth considering how you can cut back on these activities to create some extra cash for baby items or to put away into a savings pot.
Don’t go overboard buying baby supplies
It’s understandable that in all the excitement over the new arrival you may be tempted to do some early shopping for baby items. But don’t feel you have to splash out on the entire myriad of baby products as family and friends are likely to be very generous once they hear the news of the new arrival. So hold off on all but the essential purchases, such as a starter pack of baby wipes, new-born nappies, and some neutral-coloured babygros, until later on.
For those on a strict budget many items of baby equipment can often be bought quite safely second-hand. However, for safety’s sake, certain items, such as car seats and cot mattresses, should always be purchased brand new and from reputable retailers so that you can be sure they’re in good condition and conforming to the latest safety standards.
If this isn’t your first child, then you are at a slight advantage compared to new mums, as items such as high chairs, cots, and prams may still be perfectly usable, and friends and relatives may only be too happy to let you have their baby equipment once their child has grown out of it.
Get rid of the old to make way for the new
Once your baby is born, your life will change in a big way. So, there’s no better time to take a look at your lifestyle and to determine whether you really need all the things you have. As you declutter, selling the items you no longer want is a great way of making some extra money. Doing a car boot sale could help you afford the fancy pram you’ve got your eye on, or start an Ebay account and sell items to a wider audience.
Once you’ve had a look at how you can be smarter with your finances and decided where you can make and save money, you should be able to come up with an effective budget plan – the hardest part will then be sticking to it. With a small amount of self-discipline and readjustment, you’ll be fine. Having a baby is a wonderful thing, and you shouldn’t let worries about money put you off raising a family, especially when the ways of saving can be really simple.