Starting a family is without a doubt, a costly endeavour. Of course, it’s exciting and life-changing as well. Over the course of your child’s life, it could cost you hundreds of thousands of pounds for one single child! But not to worry, you can prepare for the added expenses for the next few decades through careful financial planning. Here are a few ways you can help ease the financial burden of starting a family.
This does not constitute advice and advice should be sought in all instances before acting on it.
Build a budget
Designing and sticking to a budget is one of the fundamentals of financial planning. And it’s the first step to preparing for the extra expenses you’ll have to deal with once you have a family. First, track your income and spending so you have an understanding of how much comes in versus how much goes out each month.
This helps you identify exactly where your money goes and if you’ll be able to kerb any overspending in nonessential areas. Build into your budget enough savings each money to help you prepare for your baby. Don’t forget to accommodate any change in income due to reduced work schedules once the baby arrives.
Ensure your family is protected
If you don’t already have wealth protection policies in place, now is the time to secure them. Protecting your finances in the event that you can’t work due to illness or injury — or as a worst-case scenario, death — is crucial. Policies like critical illness cover, income protection, and life insurance are designed to help provide financially for your family in case the unthinkable happens.
Additionally, it’s a great time to plan your estate and put a will in place. This will ensure that not only will your assets be distributed as you wish after your death, but you’ll also be able to determine who becomes your child’s guardian in the event that you die while they’re still under the age of 18.
Set up your child’s financial future
At the start of your parenthood journey, you might be preoccupied with the difficult task of keeping your baby fed, clothed, and rested. Before you’re in the thick of it, think about how you want to help them flourish financially later on in life. Setting them up with everything they need in life certainly includes ensuring they’ll have money to help them kick-start their finances. You can set aside money for education, a deposit for their first home, or even to give them a head start once they graduate from university.
As with all things savings and investing, the earlier start you get, the better, so your money has time to grow. There are plenty of options to help you get started, from bank accounts to Junior Individual Savings Accounts to Junior Self-Invest Personal Pensions. It doesn’t matter what avenues of savings you choose, all that matters is that you start as early as you can.
Are you ready for everything that comes with being a parent?
Even after following these tips, it might still seem daunting to get everything in order to start a family. While we won’t be able to help you with preparing to become a parent for the first time, we can help you be financially ready when the big moment arrives.
Consulting with a financial expert in order to get your finances in order helps take away some of the difficulties and reduce the amount of time you spend on the task. To learn more about how we could help, get in touch with the experts at Dental & Medical Financial Services today.