You may think you can buy shoes like it’s going out of fashion, but guess what? Your baby can spend money faster than you can (even if she’s not born yet)
Your baby is adorable and very little, but chances are she’ll still give your purse a bit of a hard time.
That’s why it’s never been a better time to get to grips with your finances. It can help you feel more in control and leave you in a better position as your child grows up.
Get started with these simple steps.
Be budget realistic
Yes, it sounds boring – and it kind of is – but a budget is key right now.
‘Write it in a spreadsheet or on a word document, not a scrap of paper, and use at least three month’s worth of bank statements to work out your monthly income and outgoings,’ says Dan Plant from Moneysavingexpert.com. ‘Map this out for the next year, tweaking your income to allow for maternity leave.’
This could take you half a day but will leave you with a better idea of your position so you’re not caught out. And allow for everything – that’s birthdays, Christmas, holidays and the rest. Try MSE’s Budget Brain tool.
If you can set money aside to save, do it. And if you can’t, perhaps look at where you can cut back – shop around for better phone contracts or energy bills, for example.
‘There are savings accounts called Junior Cash ISAs that are often useful for parents with young children,’ says Dan. ‘They let you put in up to £3,720 a year for your little one with tax free interest. You can do this with any bank – Coventry Building Society is a good option at the moment.’
From 2014, the amount you're allowed to save, tax free, in a Junior Cash ISA is being raised from £3,720 a year to £4,000 as part of George Osbourne's new Budget.
Get credit card smart
These can be a good way to cover outgoings so you and your partner can work out who’ll pay how much later on – particularly helpful if your income is suddenly lower.
The mantra when it comes to credit cards is Pay. It. Back.
And it sounds obvious, but the mantra when it comes to credit cards is Pay. It. Back. Ideally in full each month.
‘Cashback cards let you earn a percentage for everything you spend, but you have to pay off the balance in full every month to avoid the interest which would dwarf any money you make back,’ says Dan.
‘If you can’t do this, try a 0% spending card, which is interest free for a certain period – make sure you’re sorted to pay when that ends though.’
Reassess your benefits
If you’re entitled to state money, now’s the time to claim it. ‘Most people don’t realise what they’re meant to get,’ says Dan. Visit entitledto.co.uk to work out your position.
‘Also find out if your company does childcare vouchers – they come out as a proportion of your salary, which you then skip tax on,’ says Dan.
If you’re struggling with bills, talk to your energy company – some have support plans.
‘Switching credit cards to a balance transfer card with another company means they pay off your existing debt so you now owe them, hopefully at a better rate – this gives you some breathing space,’ says Dan.
‘Generally focus on the largest debt so you get that under control, and I’d recommend steering clear of payday loan companies – you can get into really tricky situations and it’s often better to see if you can get money elsewhere, even if that means borrowing from family or selling those old baby toys online.’ Visit stepchange.org for debt advice.