Costs of starting a family

All going well, this time next month I’ll be a Dad. I’m excited about starting a family but also daunted about the sleepless nights. But one thing I won’t be losing sleep over is my household financials. I’ve looked into the future costs and started to plan now. Read on to learn my top tips for being financially ready.

A study by insurer LV= reported that by the time a child turns 21 the parents would have spent £231,847 (nearly 1/3 of their income) on them. An all-time high! While this sounds worrying you need to balance this up with the years of fun, enjoyment, learning and family-time it brings.

So with such a large financial out-lay I’ve come up with top tips to allow you to be better financially prepared when the moment arrives.

Know your outgoings

If you are unable to list your monthly living costs then it’s going to be an uphill battle when baby comes along. Spend the time now to sit down and list all regular payments you make and work out whether they are necessary, nice to have, or ‘what is this payment we are making for?!’

You need to understand your main outgoings otherwise you will be stressed about renewals or having to make late payments. Don’t you want to spend more quality time playing and loving your new baby?

That is where BeeMyMinder comes in. Simply pull out all agreements, policies, bills and quickly add key details online. It’s safe, secure, takes 5 minutes and best of all you set an alert so you don’t take caught out. Even share it with your loved one, in case you’re too busy playing Mum (or Dad).

Cut back on current costs, but make sure your covered

Now that you have a good idea of your current outgoings you need to explore what changes could be made to save some money. Either cancel a policy not needed, phone up a current supplier and ‘haggle’ for a better deal (nothing to lose), or take a bit more time to find a new supplier offering a better deal.

Our partners’ page  offers deals that could save you money. If you like, contact us  and we can put you in touch with a UK independent advisor (regulated by the Financial Conduct Authority) or find better deals on your behalf.

However, you need to make sure that whatever you do that purchases made for your upcoming arrival are covered too. So, if you just bought a new pushchair, car seat, cot, new machine for making babies milk etc are these going to be covered? You might have done some home improvements or renovations so make sure you include them for future protection.

You may need to add or modify a policy, for example, upgrade your broadband to cover those Skype calls to family / friends, add a children’s channels to your TV entertainment package etc.

Whatever needs changing, save it quickly on BeeMyMinder.

Plan for the future

Now that you have reviewed your expenses and know that your household income is about to halve, how do you plan for the future? Well here are some options:

• Open a saving accounts and start putting away money towards family holidays, schooling etc
• Open a Junior Isa and make tax-free contributions till they turn 18 years old
• Remove all debt, try to pay off credit cards, loans and if possible reduce the mortgage
• Choose the right childcare! This can be a major cost so decide what you think is best for your budget, you and your child’s needs. There are many options from registered childminder, day nursery, nanny, au pair, playgroup or pre-school, family or friends
• Use a calculator to determine what it’s actually going to cost

In Conclusion:

It can (will) be the best time of your life starting a new family. However, you don’t want this overshadowed by constant concerns on money and stressing about costs that you were unaware of or just plain forgot about. Be realistic and take control before it’s too late.

I’d love to learn from others who have already learnt (the hard way) so please leave a comment.

Last updated by Nigel Brokenshire at May 23, 2016.