Budgeting For A Baby – how to cope with your new finances

Budgeting For A Baby: You Can Afford One (And Still Treat Yourself)

by Stephanie Spencer |
Published on

If planning for your baby has left you terrified you've a future of perpetual beans on toast and cut-up credit cards, don't panic. There are ways to make your new budget work.

For something so tiny, babies sure need a lot of stuff. From Moses baskets to buggies, the bills can soon add up, so it pays to do some financial planning. The most important thing to do is work out your budget.

Clear your debts

‘By the time your baby arrives, you want to have a healthy bank balance,’ says Madeline Thomas, author of Babynomics: Money Saving Tips For Savvy Parents. ‘Channel as much of your disposable income as you can into paying off cards, so you can start family life with a clean slate. Most of the minimum payment goes on interest anyway, so it doesn’t actually reduce your balance.’

Once you’ve paid off the balance, put away your credit cards. Place them in a container of water and store them in the freezer to keep them out of reach – drastic, but if you’re tempted to splurge, you’ll have to defrost them first. If you’re worried about money problems or have built up unmanageable debts, speak toNational Debtline or visit your local Citizens Advice Bureau.


Switch your utility providers

Use your early maternity leave to save money on your household bills. ‘Switching your utility providers, shopping around for cheaper car and house insurance, plus bundling your TV, internet, telephone and mobile together can save you money each month,’ says Marie-Claire Carlyle, author of Money Magnet Mindset.

Visit uSwitch to search for better deals on all your monthly outgoings. You may even get cashback just for switching.

Start a savings account

If you’re planning to live on just one salary after your baby is born, start practising. ‘Set up a separate savings account and put away as much of your salary as you can afford,’ says financial coach Lavinia Osbourne. ‘Not only will this help build savings fast, it will give you an idea of how realistic the plan is.’ Find the right savings account by comparing them at MoneySupermarket.

Draw up a list of the things your baby really needs, then stick to it


Have a baby shower

Friends and relatives will be only too happy to buy things for your baby, so you may as well ask them for practical things that you and your newborn really need. Even if you don’t have a baby shower, close family and friends will buy you presents, so it’s worth waiting to see what you’re given before spending too much in those baby shops.

Draw up a list of the things your baby really needs, then stick to it. Apart from the cot mattress and car seat, both of which should be brand new for safety reasons, most things can be bought second-hand, on eBay or at NCT sales.

Sell your unwanted stuff

You’re going to need some extra space, so why not sort out the spare room, clear out the garage and empty the loft? You can then sell what you don’t need on eBay, or hold a car-boot sale.

If you don’t have time to sell unwanted items yourself, and don’t mind giving up part of your profit, get someone else to do it for you. Visit Stuff U Sell– you can even arrange to have it picked up from your home.


Plan ahead

‘Look into childcare options now if you’re planning on going back to work,’ says Madeline. Asking a family member to help out can reduce costs substantially.

Whether it’s one of your parents or your in-laws, discuss this now to give them time to plan ahead. You might be eligible for tax credits. For details of how to claim for this and other benefits you’re entitled to, visit the Revenue & Customs website.

Find out more about Family Savings

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