Discovering that you are having a baby is a very exciting and emotional time. However, parenthood does bring with it a certain element of financial pressure. In today’s economic climate of uncertainty, it is more important than ever to budget and plan ahead for your child’s future. The best time to make a financial plan is before your baby arrives. This way you have time to fully prepare for what financial changes you need to make and begin forming good financial habits.
Follow our 5-step plan to control your finances:
- Keep a spending diary: Make a note of everything you spend money on each day, for four weeks. This will show you exactly what you are spending money on so your parenting budget will reflect more accurately your baby friendly budget. This spending diary will highlight if there are any cut backs you need to make and what areas you can afford to make these cut backs in. There may also be things that you are spending money your money on which are unnecessary. If this is the case, these can be cut back on.
- Complete an income and expense check: Check your bank statements to track what money is coming in and what money is going out.
- Set personal goals: It can help to get into the mindset of saving to identify a short time goal such as paying for baby-related expenses.
- Prepare a 12 month budget plan: Make a list of planned expenses within the next year. Include your additional income from child benefit and consider any extra benefits you may have within the next year. If you are working, you should confirm with your employer what exact pay you will receive while on maternity leave and the impact this will have on your other employee benefits. If you are facing unpaid maternity leave make sure to factor in this.
- Keep your finances under review: Irrespective of your circumstances, you should review your financial situation annually, particularly when faced with a change in circumstance such as the birth of a child.
Read more: Money saving tips
