Top 6 tips: financial planning for new families
Whatever big life change is heading your way, whether you are becoming a parent for the first time or your family is expanding – money is an important consideration. Read Ferratum's top 6 tips for saving money and better money management for expectant families.
Itemise, organise and plan to save
If you were buying a new house or starting a renovation, one of the first things you'd do is research. You can take the same approach when extending your family. There's plenty of apps to help you get started with planning a new budget or savings plan, but you can always use a written list or excel if you prefer.
If you already have kids, you probably have a very good idea of what you will need for the new baby and maybe already have some of these items on hand. However, if this is new territory, don’t forget to reach out to your friends and family who can give you tips and tricks that you haven’t thought about. Also, some online research can give you some range of what products cost and where you can find good sales.
One method is to make an essentials list for different age stages (say, baby, toddler, preschool) or you may prefer to see what parenthood is like first before you decide what you want to buy, in which case, maybe put some money aside to cover essentials as and when you need them.
Start by planning for the child’s first year
When starting or adding to your family, it is easy to get overwhelmed by thinking of the distant future such as school expenses or even saving university. A good place to start is thinking in manageable time-frames. Plan ahead for the first year and consider the supplies that will be needed for the new addition.
Stick to basics at first: car seats, prams, cots and changing tables. Many of these items are convertible as your child grows, such as adjustable prams and cots which can take you further than the first year. After the larger items are accounted for, then start making lists about the smaller items that will be needed such as blankets, clothing and nappies. This is a good time to use an Excel sheet.
Then you should consider some of the larger financial issues, like nursery costs, and how that might impact your budget.
Avoid big brand names to save money
It might be tempting to kit your new baby out in the cutest high-end brand named clothes, but in practice, your little one is going to grow out of their clothes so quickly, it might not be worth spending a lot in unnecessarily in this area. We all like to pick up something special, but try and be sensible, look for sales or bundles of clothes sold online. Many items for young babies are in nearly new condition and there are great bargains to be had.
Don't forget about baby toiletries, there's a lot of choices out there and a lot of price variation. As with clothes, there are some Baby toiletries also come with a lot of choices and also a lot of price variation. Like brand name clothing, this could be a good time to choose off-brand products or cheaper options. Consider your priorities and choose your battles. For example, if exclusive or organic products are important to you, sale shopping ahead can save you significant amounts of money. But many supermarket brands are rated very highly in quality by parents, and it's worth considering what budget options are available.
Make the most out of baby registries
Baby showers are becoming commonplace in the UK, so you can take advantage of the trend and make sure you tick some bits off your list.
Like wedding registries, baby shower registries are picking up speed in many countries. Retailers have responded to this by offering specific baby registries, such as IKEA and Amazon. If you want to be a bit more subtle, reach out to family and friends and mention that it would be nice if they consult you with gift ideas before making purchases. That way you don’t end up with 10 sets of bodysuits and no baby blankets.
A good tip is to put a good range of items on any registry so your guests don't feel like they're being pressured into spending more money than they planned.
Buy and sell second-hand children’s clothing
As we mentioned earlier, babies and children grow fast, and parents can easily find themselves with a wardrobe full of barely worn clothes. Don't be afraid of asking friends and family if they're looking to get rid of any clothes they have hanging around, and don't forget to reward their generosity with a bottle of wine!
You can also sell on items that you don’t need fairly easily online on eBay or local selling pages on Facebook.
Consider your family's future needs
Before you list your baby's entire wardrobe and bedroom on your local selling page, it's also worth considering the long term first! If you're planning to have another child in the future, then actually hanging onto some items may well save future-you some pennies. Big ticket items like prams, cots and walkers are nearly always in good enough condition for baby number 2 or even 3. And you can bag up clothes in age groups so they're easily to hand for the future baby. Which will save you some time as well!
It's also not a bad time to consider if your budget will stretch to regular savings for your child. Starting small when they're tiny means you could have a sizeable sum 18 years in the future.
And don't forget the bigger family-related expenses which can be trickier. Is your car big enough? Your house? These things may take a bit more forward-thinking planning to get into place for your family, and whether they're a right now necessity or do you have some time to save?
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|Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk. Representative example: APR 1270% if borrowing £400 for 4 months. Interest rate: 292% p.a. (fixed). Total amount repayable: £665.48 by four instalments of £166.37. Maximum representative APR: 1604% if full loan repaid after 7 days.|