Guest Post from Family MoneyBox.

Ten ‘Top Tips’ from the team at Family MoneyBox

There’s no getting away from it – having a child is probably one of the biggest investments you’ll ever make. And the ultimate irony is that it all begins at a time when your income is likely to be taking a big hit, as you plan to take time off for maternity leave.

Here are Ten ‘Top Tips’ to get your finances prepared – giving you more time to sort out all the other things you’ll need to get your head round before baby appears…

• Maternity leave payments
You’re only entitled to Statutory Maternity Pay if you earn at least £109 per week, and you’ve been in your job for at least 6 months prior to reaching 15 weeks before your due date. Statutory Maternity Pay lasts for 39 weeks – you get 90% of full pay for the first six weeks, and for the next 33 weeks, you only get £136.78 per week or 90% of full pay, whichever is lower. If you earn less than £109 per week, you could qualify for Maternity Allowance instead.

Checklist:
• Find out more about Statutory Maternity Payments here
• Check any specific arrangements with your employer – if you’re lucky, they may offer better terms…

• Who’s taking time off?
Gone are the days when time off to look after a new addition to the family was the sole preserve of the lady of the house, with the new Dad just having a couple of weeks off just after the birth to smoke cigars and generally get in the way. Nowadays, new Dads can take up to 6 months Paternity Leave. But it only applies if Mum has gone back to work and isn’t claiming any maternity leave benefits or payments.

Checklist:
• Discuss and decide in advance who’s taking time off to look after the new arrival
• Find out more about Paternity Leave entitlements here

• Know your benefits
For many people who are in work, starting a family may be the first time they qualify for any state-funded benefits, and it can be a minefield understanding what you’re entitled to. Don’t join the ranks of hundreds of thousands of new parents who miss out – do your research before baby arrives, and find out what you can claim, and how to get it. There are even some benefits you can claim before the birth – like free prescriptions and NHS dental treatment – so find out what you could be claiming right now!

Checklist:
• Feeling guilty about claiming benefits? Get over it! You’ve probably been paying your taxes for years – now’s the time to take advantage of what is rightfully yours.
• Check out this handy quick reference table for details of all the benefits you could be claiming now, and in the future

• Don’t go mad at the shops!
Recent research has shown that the cost of raising a child from birth to their first birthday (excluding childcare) can be as little as £1,600 or as much as £7,200, depending on how you approach it. Here are some tips for keeping costs down – whilst making sure you have everything you need to look after your baby properly, of course…

Checklist:
• Ask friends and family who’ve already been through it all, for advice on what baby stuff you will actually need (and what you’ll probably be tempted to buy, but won’t ever use)
• Save money by buying baby clothes and accessories second-hand – babies grow quickly, and their needs change just as fast, so second-hand stuff is normally in good condition and remember that your baby will only be using it for a short while too, so why spend a fortune?
• Use this handy calculator to find out how much you’re likely to have to shell out on bits and bobs for baby

• Get budgeting!
If you’ve never had to watch the pennies in the past, you probably will need to, once baby comes along. Just a quick look at the cost of the most basic baby essentials like child care, nappies, food and clothes is enough to send your pay packet running for the hills! Now’s the time to analyse where all your money goes currently, and work out how you’re going to afford all the extra stuff your new arrival will need.

Checklist:
• Set yourself a monthly budget, and stick to it!
• Try using this free online budgeting tool to take the guesswork out of balancing your monthly income and outgoings

• Switch & save
You’d have to be living on a desert island to miss all the constant TV ads about how you could save £££s by shopping around and switching your utilities to a cheaper provider. Well, if you’ve blissfully ignored all the ‘Meer cats’ and ‘opera singing’ until now, maybe it’s time to sit up and take notice? After all, you’ll be spending a lot more time at home with the heating up high and chain-loading the washing machine, not to mention boiling umpteen kettles on a daily basis…

Checklist:
• Just take the plunge – take your pick of the online comparison websites, and see if you could get a better deal on your utility bills!

• Plan for childcare
One of the biggest expenses that working families will have to bear is the cost of childcare, and it’s a long term thing, so the sooner you start looking into it, the better. A bit of good news for the future is that 3-4 year olds (and some 2 year olds) who haven’t started proper school yet, are entitled to a free early education place – a minimum of 15 hours per week in England and 10 hours per week in Wales.

Checklist:
• Read lots of useful hints and tips about choosing and arranging child care here
• Find out more about financial help that may be available with child care here

• To work or not to work?
If you’re planning to return to work after your maternity leave, take a realistic look at how this will work in practice for you. Apart from factoring in the cost of childcare, those long commutes, early starts and late nights of the past may just not be practical anymore? And whilst employers these days are obliged to offer ‘flexible working options’ to parents, there are limits to this obviously! Maybe it’s time to consider a career change? Could you work from home, or go freelance for more flexibility?

Checklist:
• Don’t just assume you’re going to go back to the same job after maternity leave – take the time to have a think about other options too!
• If your skills permit, maybe look into freelancing and/or working from home, for extra flexibility? Read more here

• Free time costs money!
You may think that once baby arrives you’ll be busier than ever before, and free time will be a thing of the past, at least for the first few early years. And you’re right of course – you will certainly be kept on your toes, and tortuously deprived of sleep too, unless you’re very lucky. But you will be spending lots more time at home than ever before, so plan ahead to avoid the temptation to get addicted to expensive things like TV shopping channels and online bingo.

Checklist:
• Think about hobbies you used to enjoy as a child, or something you’ve always wanted to try, but never had the time – and get creative!
• Make regular plans to meet friends for coffee or a picnic in the park – get out and about as much as you can

• Swap skills to save money
If money’s going to be a bit tight when you’re at home on maternity leave, do you have any skills which you could ‘barter’ with your friends and neighbours to save you money? Obviously if you’re a hairdresser or nail technician, this could work really well, but think about other perhaps less obvious things like helping with paperwork, doing a bit of babysitting, ironing, gardening, cleaning…

Checklist:
• Talk to friends and neighbours about things they may need help with, and see if you can offer your services in exchange for something you need
• Use word of mouth to expand your circle of friends and acquaintances to find more people you can help, and who can help you in return

Latest figures show that the average cost of raising a child from birth to age 21 is a staggering £222,458! That fact in itself is surely enough of a wake-up call for every new parent – financial planning, clever budgeting and canny saving can help!

Tags:   FamilyMoneyBox · Maternity · Pregnancy4 Comments