Financial planning for new parents
Having a baby is life-changing, but it’s also a huge financial commitment. According to an Aviva survey, parents with children aged between 0-5 typically spend over £7,000 a year on essentials and indulgences for their little ones. That’s £35,000 over five years.
Getting on top of the finances now can keep the costs down and help prevent any surprise financial shocks once your baby arrives. Here are some tips to get you started.
#1 Budgeting for a baby
One of the biggest challenges you may face is suddenly living on, effectively, one salary. Perhaps it’s time to think about tightening the belt. Look at what you can live without and make sure you’re really only spending on the essentials. Also, think about what new items a baby needs – nappies, clothes, a buggy. These costs can quickly mount up, but there are some ways to save money.
Baby budget hacks
See what you can borrow – You’ll only need a crib for a couple of weeks so why buy new? And babies will outgrow their clothes in no time.
Buy second hand – Check out the many online sites of used and nearly new cots and toys. Mumsnet, Gumtree and Facebook selling pages are popular.
Use vouchers – Save money on various products and services by signing up for websites with discount vouchers.
#2 Access to Healthcare
Being pregnant entitles you to free NHS prescriptions – not just during the pregnancy, but for a whole year after your baby is born. The same goes for dental care. You’ll need a Maternity Exemption Certificate in both cases. It’s also good to know that children can benefit from free dental care right up to the age of 18, or 19 if they’re in full-time education.
You could also qualify for the Healthy Start scheme, which currently provides vouchers for milk, plain fresh and frozen fruit and vegetables, infant formula, and free vitamin supplements.
That means one voucher a week if you’re at least 10 weeks pregnant or have a child under four years old and are in receipt of certain benefits. You will also qualify if you are under 18 and pregnant. All these add up. So it’s worth making sure you’re getting everything you’re entitled to.
Extra peace of mind
The NHS is fantastic, but with private health cover you have the reassurance of knowing you can get fast access to specialist care and treatment, should you need it. As your family grows, you may want to consider your options. Aviva’s family health insurance, for example, lets you choose where and when you get treatment from a network of hospitals nationwide. There’s also 24 hour telephone access to a GP and a stress counsellor. And free cover for younger children when you take out cover for yourself and your eldest child under 20.
#3 Saving for the future
Many parents are surprised by how quickly their children grow. One minute they’re taking their first steps, and before you know it they’re taking their first driving lesson. Raising a family is full of precious moments. It’s also a long-term investment. On top of clothing and food expenses, there may be school fees and university costs to think about. Right now, these things probably seem impossibly distant, but it’s never too early to start building a nest egg for your child.
#4 Protecting what’s important
As a parent you’ll do anything to protect your kids. Yet according to an Aviva family finances report, many of us haven’t put plans in place in case anything happens to either parent. This is partly because it’s an uncomfortable subject to think about. But there are some easy steps to tackle it.
Your family protection ‘TO DO’ list
Talk about it – once you broach the subject it becomes less emotional and more practical.
Choose a legal guardian – it can be anyone over 18, so a family member or a close friend.
Make a will – this is the next step to making your plans official.
Consider life insurance – it gives you added protection, for example Aviva offer £15,000 free life insurance for 1 year to each parent with a child under 4 years old.
Get expert help – it’s worth talking to a solicitor or financial adviser, and they may be cheaper than you think.
1 year of FREE Life Insurance for each parent of a child
When starting a family you have enough to pay for. So Aviva is giving each parent with a child under 4 years old £15,000 free life insurance as a first step towards protecting their loved ones. The cover continues for 12 months from when the policy is taken out. There are no strings attached, it’s easy to set up and it puts some protection in place for what matters most.
To find out more and apply visit www.aviva.co.uk/freeparent