How to Financially Prepare for Starting a Family

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There is nothing quite as magical as starting a new family with someone you love. Sharing in the welcoming of new life into the world is a profoundly moving experience, but not one without its difficulties. 

Financial issues may be the furthest from your mind when excitedly planning for a new member of the family, but simple considerations made early can make all the difference. Here are some helpful ways to prepare for your new family.

Set a Family Budget

First and foremost, your priority should be to draw up a short- and long-term budget for your new family. With a new child comes new financial obligations, as well as the impetus to better prepare yourself for the future.

Your budgeting should begin with an honest review of your finances as they stand. What is your combined income, what are your rent or mortgage payments, and how much are your monthly utilities? How much do you spend on entertainment and leisure, and do you have any subscriptions to consider?

At this point, you should also budget your future with your child. What are the additional expenditures you are anticipating, and how much will they cost on average each month? These expenses would include one-off purchases such as cots and prams, as well as long-term continual investments like clothes and food. With this information, you will know exactly how much more money you need to source.

Pay Debts First

If you are in a position where you have outstanding debts, your key financial priority should be to pay these off. Tempting as it may be to save simultaneously to paying off debts, the cost of interest on your outstanding debts will outweigh the value of any money saved. The sooner you pay off your debts completely, the sooner you can save and the less money you will lose.

Seek Professional Advice

At this point, it would be wise to seek professional advice regarding the future of your finances. As far as long-term saving is concerned, for your child’s provisions or future education, robust financial planning will ensure the best action is taken for the organisation of your savings, and the protection of your money’s value over time.

Build Emergency Savings

While you chart a comprehensive financial plan for your larger savings and investments, it is important to build up a short-term emergency savings cache. This emergency pot will shield you from unprecedented economic shocks, such as the loss of a job or a surprise payment in the form of boiler or vehicle repair. This buffer can be essential for continuing to be able to provide for your child.

Plan Your Parental Leave

Parental leave is a crucial provision for bonding with your new child, and for effectively raising it in the first months following birth. There are different provisions for biological mothers against fathers or non-biological parents, with maternity leave allowing biological mothers to receive 90% of their salary for up to 39 weeks of their leave. 

Paternity leave is paid at a statutory rate. Blessings as these periods of leave can be, they will have an undeniable impact on your finances, so be sure to plan them carefully.