Life changes when you have kids

Guest post by: Tamsin McCahill

Everyone told you about the sleepless nights. You knew there’d be a bit of crying. But what about the biceps of steel you’ve developed from the endless rocking? The dubious stains on every item of clothing you own? The unsolicited advice you now have to endure from well-meaning people on buses? 

But one of the biggest (and most overlooked) changes starting a family can bring is the impact it has on your personal finances. 

First off, there’s the all the kit you need to buy. Even if you don’t fork out on the latest ergonomically designed highchair, essentials like cots, car seats and sterilisers can make a huge dent in your savings. No wonder then that a baby, according to the Guardian, is thought to cost its parents more than £9,000 in its first year alone.

Then there’s the small problem of managing the mortgage while you’re on maternity leave or if one of you decides to go part time. 

And if all that’s left you sobbing into your organic hemp nursing shawl, look away now. Even when your overdraft has made it through their babyhood, the cost of raising a child to 21 is now believed to be as high as £210,000 .Ouch.

Bearing in mind the huge financial burden involved in raising children, it’s no wonder that many parents take steps to ensure their family is protected into the future. So what should you do? Here are our top five tips for new parents.

1.     Start saving for the future

It can be a good idea to start putting small amounts of money aside each month, whether that’s into your Child Trust Fund (if your child was born before January 2^nd, 2011), a savings account or even a junior ISA - the tax-free children’s savings account launched this year.

2.     Don’t overspend on baby costs

It’s natural to want everything to be perfect when you’re a new parent, but make sure you come up with a budget and stick to it before costs spiral out of control. Always accept hand-me-downs and look out for second hand shops for bargains.

3.     Find out about benefits

Even if you plan to carry on working, you’re more than likely to be able to claim child benefit as most families resident in the UK are entitled to it. You can get extra help if anyone in the family has a disability and you may be entitled to child tax credits, too.

4.     Prepare a will

The only way to ensure your money will pass to the right people after you die is to have a will written up.  It’s also a way of setting in stone who you would like to care for your children if you die while they’re still young. You could write your own but it’s advisable to ask a solicitor to help you draw one up.

5.     Take out adequate life insurance

Could your family survive financially without you? Even if you’re not the main breadwinner, consider the impact your death would have on the family, for instance in childcare costs. Having adequate life insurance in place will protect your partner from financial burden should the worst happen.