If you’re expecting or planning on having a baby there’s lots you need to know, but the costs associated with having a child are one of the most significant things to consider. Like all major life decisions, it will pay (literally and figuratively) to start planning ahead of time.
Plan ahead
Unless you or your partner work for an employer with generous benefits, it’s almost certain your household income will reduce dramatically shortly after the birth of your child. One of you will be on parental leave [insert link to parental leave and pay guide] and therefore be subject to a drop in your salary, so it’s important to understand the costs of the big ticket items you need and to buy them in advance if you can.
Also think about your regular household budget and how this will be impacted by income reduction. How much do you need to cover the mortgage or rent, bills and subscriptions? Ahead of the birth of his second child, our co-founder Paul increased the amount he paid into the joint current account he has with his wife to build up a buffer for when his wife’s statutory maternity pay kicked in. This meant they could rest assured that all their priority bills would be covered during the period of reduced income.
Assess your outgoings
Once the baby arrives you’ll find that there’s always something else to buy, whether you need it or not. To make space for the inevitable spend on baby, reassess your outgoings to see whether all of them are completely necessary.
We’re not talking about standard household bills here, but rather those subscriptions that steadily build up over time, perhaps because you got a free trial and meant to cancel but forgot about it. We do this exercise every year and still manage to end up with half a dozen subscriptions we don’t need or want.
Five streaming services, really? Trust us when we say you’re not going to have the time to watch that much TV.
Check what you’re entitled to
Depending on your circumstances you may be entitled to certain benefits and entitlements. Here are just a few.
Child Benefit is a welfare payment made by the government to help with the cost of raising a child. Only one parent can get Child Benefit for a child. You’ll receive Child Benefit for each child under the age of 16, or 20 if they stay in approved education or training. There is no limit on the number of children you can claim for, but your salary could impact your eligibility. Parents earning over £50,000 become subject to the High Income Child Benefit Charge.
Click here to read our full guide on Child Benefit.
Sure Start Maternity Grant is a one-off £500 payment toward the cost of having your first child, or for a multiple birth (e.g. twins) if you have children already. You also need to be in receipt of an eligible benefit.
The grant can be claimed by either parent.
Healthy Start provides help to buy healthy food and milk. You must be in receipt of a qualifying benefit, be pregnant or have parental responsibility for a child under the age of 4.
You’ll receive a prepaid card that can only be used to buy:
In addition, your partner will be entitled to additional in-kind benefits, such as free prescriptions and NHS dental work during pregnancy and for 12 months after the birth.
Pay off your debts
We’ve all had to take on debt at some point, but if you only pay the minimum it’ll take longer to clear and cost you more in the long run through accrued interest.
If you’re struggling with debt you can find detailed information and signposting to support services here. [insert link to support service article]