6 Financial Tips For New Parents
Hearing the news that you are about to become a parent is one of the best moments of your life. you should cherish this moment while it lasts; however, there is a lot you need to prepare for.
Having a child changes everything, most notably your financial situation. Every new parent finds a way to manage, though, and that is mainly due to the fact that they follow the correct advice. Since this is such a universal experience, you will find plenty of tips to help you manage your finances as a new parent. As such, here are a few financial tips for new parents.
1: Update Your Life Insurance Policy
As a parent, it is your job to ensure that your child is equipped to deal with the future. Unfortunately, an untimely accident could leave you out of work, or worse. You need to make sure that you can continue to provide for your child even if you aren’t there to watch them grow up. The best way to achieve this is by setting up a solid life insurance policy. However, your life insurance policy is likely to change if you have a young dependent. As soon as you hear the news of your new arrival, contact your life insurance provider so that you have the appropriate cover in case the worst happens. That way, your family will be financially taken care of.
2: Create A Budget
Your monthly income should be enough for you and your partner to live comfortably. However, a new arrival in the family is going to stretch your purse strings further than have been stretched before. Therefore, you will need to account for this change.
It may not be the most pleasant of activities but calculating the monthly cost of having a baby will help you create a new budget. You need a budget to work out whether you are earning enough to live in today’s society, so get your ducks in a row now before it is too late. Things you should consider are the cost of nappies, childcare, and clothing.
3: Save For Emergencies
Your new budget will help you afford the everyday expenses of having a child. Sadly, these aren’t the only costs that new parents will encounter.
A large, unexpected bill can spring up at any time. you never know when your car will need fixing or when your boiler will break down. Let’s also not forget that your child will need a few extra amenities as they get older. You don’t want to get caught out without the ability to pay for these items, so try and consider how much you want to save when you are constructing your monthly budget. Also, make sure you research where you are going to get these things at the best prices. For example, you will find children’s beds for a reasonable sum at Children’s Bed Shop. This way, you can be sure you get the best deal when the time comes.
4: Think About College
College is a formative experience for most teens. It can give you a sense of independence, while also ensuring that you earn the qualifications necessary for your chosen career. Unfortunately, a college degree isn’t cheap, and it is this fact that prevents most students from attending when they reach the appropriate age.
Although you are at least eighteen years away from having to think about your child’s university career, you will benefit greatly from starting your savings now. You don’t have to put thousands aside right now but putting even a little bit in a savings account now can really get the ball rolling. You can commit to this idea further once you get a better idea about your child’s plans, but you will be grateful for having this money set aside to help them when they start to think about their future.
5: Apply For Support
There is no need to worry if your budget doesn’t go according to plan. The UK government has things in place to help new parents shoulder the financial responsibility of bringing a new child into the world.
Firstly, you can apply for child tax credits. Not everyone can qualify for these; however, it is worth checking to see if you can claim, nonetheless. Child tax credits can reduce your monthly tax bill significantly, allowing you to put that money toward the items your family actually needs.
Secondly, every parent in the UK can apply for child benefits. This is only a small payment, but this monthly instalment is designed to help you pay for food so your child never goes hungry. Therefore, you should always be looking to see what support you qualify for when creating your financial budget.
6: Don’t Forget About Free Childcare
Trying to work and take care of a new born is one of the biggest stresses facing new parents. You will have access to both maternity/paternity cover; however, this time off only covers you for the first few months of the child’s life. Also, you rarely receive full pay when you are off work with a young child.
Not many people know this, but parents in the UK are eligible to receive free childcare. Parents can qualify for thirty hours of free childcare when their child reaches the age of three. These hours can be used at a childminder or nursery provided that these institutions have been approved by Ofsted. Unfortunately, this offer is not available to any parents that earn over £100,000 in their combined income after tax. If you find that you are worried about childcare costs, remember that you are entitled to these free hours of childcare.
Worrying about money is a perfectly natural part of becoming a new parent. Fortunately, you have all these tips that can help you prepare for your financial future when you are expecting a child. Help is out there for those willing to look for it, so make sure you prepare correctly by following this advice.