Sorting out your finances

1 – Make a budget

The first thing you should do is to sit down and work out your budget. It’s never too early and definitely shouldn’t be left until the baby is born.One of the main things is your income is likely to change, particularly if you are planning to give up work or cut back your hours. You will also need to consider the added expense, from buggies to car seats, bedding and clothes to nappies, baby food and childcare.

2- Cut back

When you have a new baby you will have lots of extra expense so it’s a good idea to try and cut back in other areas particularly if you think your income will be stretched.Start by dividing your outgoings into essential and non-essential items. Here are some top saving tips for essential items:

Shop around: When it comes to household bills such as phone, internet, TV and gas or electricity it really is worth looking at other providers to see how much you could save.
Reduce your gas/ electricity bills: Simple measures such as reducing your thermostat slightly or turning the dishwasher on at night instead of during the day can reduce electricity bills significantly.
Economise: When you’re not filling up your dishwasher, washing-machine or tumble-drier, use the half load or economy programme and where possible wash clothes at 30°C.
Plan your grocery shopping: Take stock of what you already have in the house and make a list of the essentials that you need. Never shop hungry and avoid buying unhealthy, convenience foods as not only are they bad for you but they are also far more expensive than buying healthy foods. Buy generic brands where possible, they are generally cheaper and are very often the same quality as their branded counterparts.
Bundle internet/ TV/phone: One of the easiest ways to save money on your internet, TV and phone bills is to bundle them with one supplier. Dropping premium channels is another way to make significant savings. Also, don’t be afraid to haggle with your provider, particularly if you are out of contract!

Once you have examined the essential outgoings; it’s time to cast a glance at non-essential items. Are there things that you don’t need such as an expensive gym membership or a subscription to a magazine? It might be worth shopping around and seeing if there are cheaper offers out there or if your current company would be willing to offer you a better deal. If you’re treating yourself to a cup of coffee and a muffin every day, remember that these costs all add up. Bear in mind that you will have your hands full once your baby arrives.

3 – Pay off debt

When it comes to certain kinds of debt, such as credit card debt, it can be easy to just pay off the minimum each month. However, by doing that, you will never get it paid off. Instead, allocate a certain amount of time and try to pay it off within that timeframe. While this might seem hard to accomplish, it will save you money in the long run.

If you can’t afford to pay off all your credit card debts right away, don’t lose heart. Instead, pay off the most expensive ones first.

Also, be aware that other debts with fixed repayments such as personal loans may incur an early-repayment charge if you decide to pay them off sooner than agreed.

4 – Open a savings account

It’s always a good idea to start putting money aside and the sooner you start the better. Begin by setting up a savings account that will cover your baby costs and see you through any period of reduced income. For this purpose, it is probably best to opt for an account that lets you dip into it if needed, rather than one you simply can’t access.

It’s important to note that there is still ample time to put some money aside. With seven or eight months from the time you know you’re pregnant until your baby arrives, a regular savings account can be set up. A set amount of money can be transferred into the account every month so by the time of the birth, a nice little amount has been set aside. Importantly, regular savings accounts are now available that allow your partner to also pay into the same account.

If you think you may succumb to the temptation of spending your money, make the account a little harder to access. Choose a savings account that you don’t have a bank card for!