Becoming a new parent can be quite the thrill, but it also requires you to deal with several financial challenges you never needed to think about before. As well as the existing money concerns you needed to think about, like saving for retirement and holidays, you'll also have to deal with the expenses involved in looking after your most recent bundle of joy.
Fortunately, you can prepare for the challenge of becoming a first-time parent. The quicker you start talking to your partner and addressing your budget, the more comfortable you'll feel by the time your new addition arrives. Here are a few things to consider.
1. Review Your Income Immediately
Most parents will find that their household income decreases significantly when a new baby arrives. One parent will need to take leave to look after the child for a few months, and the mother will undoubtedly need some time to recover physically. On top of that, you may also find that you have more money going out than you once did too. For instance, you'll need to pay for food, milk, nappies, and other essential expenses for your youngster.
Start by finding out how much support you can get from your employer when it comes to maternity or paternity leave. You should at least be entitled to statutory pay. From there, you can start to figure out whether you might be entitled to any additional help such as child tax credits and housing benefits too. The more government help available to you, the better off you'll be.
2. Start Tracking your Expenses
There are numerous tools out there that you can use to track your expenses. For instance, you can put all of your expenses onto a single joint bank account, which you can track every month, and set up with direct debits to ensure that you're paying bills on time. On the other hand, you can try downloading a budgeting software that helps you to track your expenses on a spreadsheet.
The more you know about the money you spend before and after having a baby, the more you'll be able to manage your costs. If you're not sure what you're going to need to prepare for when the new baby arrives, try joining parenting groups or visiting nurseries to talk to other parents about how much they spend each month.
3. Set Your Budget and Stick to It
A new baby often means that parents have to cut back on spending wherever they can and look for new ways to make their money stretch. Sometimes, the smallest change, like reducing the number of coffees you buy at expensive branches, or switching your utility provider, can go the longest way.
Set your budget as early as you can when you're planning for your baby, and make sure that you stick to it, even before the youngster arrives. For instance, you can plan to live on a single income for a while, and simply save back everything the other parent makes so that you have a safety blanket to fall back on.
4. Don't Be Afraid to Look for Help
Becoming a new parent is never easy. Not only do you need to get used to a complete change in the way that you live your life, but you also need to think of new ways to make ends meet - even if you had trouble with your expenses to begin with. The good news is that there is plenty of help out there if you know where to look. For instance, you can turn to friends and family for help making sure that you have childcare for your new baby when you need it.
At the same time, remember that the citizen's advice can help you to find new benefits and credits to apply for when you're not sure if you're making the most of the support the government has to offer.
5. Keep Your Budgeting Plans Simple
Finally, when it comes to making ends meet as a new parent, the simpler you can make your plan, the better. Remember that you're not going to be able to cut down all of your frivolous spending immediately, so look for ways to save more money one step at a time. Take advantage of vouchers and coupons that you find online and track your spending so you know where you're having the biggest problems with your cash.
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