Starting a family?
4 simple tips to set your new budget.


Beyond the Bugaboos and bite-sized beanies, babies also add more practical, day-to-day expenses to your budget – and a few additional financial and insurance considerations too. Here’s our short list of things to remember.

There’s no doubt that starting a family is a life-changer financially. Generally, one parent will be off work for some time, preventing the household from earning as much. Other unexpected expenses can also arise as children grow and develop. For this reason, just as you might adjust your home to prepare for the arrival of a newborn, so too should you adjust your budget. Here are a few things to consider….

  1. Set up an emergency fund (and define ‘emergency’)

Before the baby arrives start an emergency fund and begin contributing to it. Life can throw all sorts of trouble your way and, when you have children, wading through these hard times becomes all the more complicated. Removing finances from the list of stressors will be a great relief in these situations.

Make sure you have a discussion about what constitutes an emergency too. If one party dips into funds to rectify a patchy lawn or a failed birthday cake this can cause conflict – which is the last thing new parents need! The best way to approach this kind of fund is to create an automatic payment into a new account, preferably one that is not immediately accessible from phone or internet banking.

  1. Get your insurance right

The stakes become higher when you add children to the mix – and your insurance should be set up to reflect this. It’s likely that you will want to add some income cover and life cover (if you don’t already have some). This way, if something happens to one of you, the other will be able to carry on with the additional income for some time. Most insurance providers will also allow you to add your children to your health insurance policy for a small fee.

The best way to ensure that your insurance is up to scratch for family life is to speak with your advisor. They can help you determine what is affordable and safe for your circumstances. If you have any further questions or would like to know more please don’t hesitate to get in touch with us.

  1. Agree on your financial goals

When most couples start out creating a family, financial goals are not exactly front of mind. Taking a cut in income with one parent staying home may mean that the first few years are spent ‘just about’ getting by. However, it’s best to make sure you are on the same page about this.

Discuss your goals for the next five to ten years and then make a plan for how you can achieve them. Such a plan might involve an honest chat about when the stay-at-home parent will go back to work and whether you need to cut out any superfluous expenses to get through the early childhood years. Doing this will help to make sure you don’t run into any disagreements further down the line.

  1. Consider who might want to stay at home for longer

For some families determining who will become the primary, stay-at-home caregiver is a purely practical decision – one that involves establishing who earns more money and can make the family more comfortable while existing on a single income.

For others, it may be the mother is the more practical choice for non-financial reasons (such as breastfeeding and a keen willingness to carry out the daytime care). While feelings may play a large part in this decision, finances should not be overlooked.

If there is going to be a significant deficit in income, discuss how this is going to be countered – perhaps by reducing leisure spending, cutting the grocery bill, or foregoing memberships and subscriptions. It may also help to move to an area with less expensive housing (if this is a possibility). As lifestyles change dramatically when children come into the picture, a move to a more suburban area with good access to amenities can sometimes be for the best.




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