Tips For Saving For A New Child

by | Oct 26, 2021 | Savings and Investments | 0 comments

Adding to your family is a joyful and life-changing experience, but it is also an expensive one.

From nappies and clothing to a buggy with more features than your own car, these little bundles of joy create unlimited extra costs that will suddenly become integrated into your annual household budget. Fast forward to the beginning of their school years and outgoings will drastically increase, with items like uniforms, school trips and books also to be factored in at various intervals.

So, how can you prepare for such a substantial hike in your yearly expenditure?

Tips For Saving For A New Child

Assess your current financial situation

Sit down and look at your existing accounts in detail. Are there any areas where you might be overspending and could afford to cut back in the name of saving a few extra cents? Identify any unnecessary outgoings and work towards limiting or avoiding these entirely. This will allow you to gradually build on any existing savings you already have, laying a strong financial foundation for when the baby arrives.

Clear outstanding debts

If you have any outstanding loans, you could pump the savings you make from reassessing your current spending habits into paying them off or reducing them. Starting out on your parenting journey with a clean financial slate will create some wiggle room for any unexpected expenses that might crop up after the baby comes. Even if it means sacrificing an annual holiday abroad or perhaps a weekend or two away, you’ll thank yourself when you are debt-free.

Assess your future financial situation

Once your current accounts are in order, it’s time to examine what they will look like after the baby arrives. Do your maths based on your new income, which will be in the form of maternity pay either from the state or your employer. Figure out how much disposable income you will be left with once all bills and outgoings are subtracted from your new salary and adjust your budget accordingly. Don’t forget to include the child benefit payment of €140 per month in your revised calculations for single births and more for multiple births. You will need to claim for this through the Department of Social Protection and this can be done after you have registered your child’s birth.

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Create a “baby fund”

As an excited parent-to-be, it can be tempting to splurge on cute clothes, toys and every baby gadget on the market. However, by putting aside a set amount of money each month for your baby buys – and most importantly, one that is proportionate to your income – you can dip into this fund as and when needed, rather than spending excessively and finding yourself out of pocket down the line. You should also aim to keep paying into this fund once the baby is born. Having an extra money pot on hand for any emergency or unexpected costs that crop up will provide great peace of mind.

Make allocations for childcare well in advance

If you are planning to return to work once your baby reaches an appropriate age, you will no doubt be considering possible childcare options in the months ahead of their arrival. With a drastic shortage of creche spots paired with lengthy waiting lists, getting your ducks in a row early when it comes to securing a place for your child in your preferred creche facility is a must. Furthermore, with a potential bill of more than €200 per week for this vital service, it’s never too early to begin putting money aside to cover this significant expense.

Focus on the necessities

When kitting out your home for the new addition, focus on what you will need rather than what clever marketing dictates to be necessary. The baby market is saturated with novel products that often ultimately end up unused and taking up space in your crowded house. Make life easier for yourself and for your pocket by keeping it simple and sticking to the tried-and-trusted basics.

Bag a bargain

There are certain items that you won’t be able to function without as a new parent, such as a cot, baby changing mat or station, car seat, buggy and lots more. Shop around before purchasing and search for the best bargain available. Keep your eyes open for pristine second-hand goods that will likely be on sale for half the price of a new edition. Each euro saved on both big and small purchases is another boost for your bank account.

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Save for their future

While it is vital to ensure you have enough of a nest egg in place to cover all the immediate expenses that come with welcoming a baby, it is also hugely important to plan ahead and begin saving for their adult years. Once they have come to the end of their primary and secondary school journey, it will be time to embrace the college years and the many associated costs.

From college fees to accommodation and living expenses, the latter of which can reach as high as €14,000 per annum depending on location – providing your child with the opportunity to pursue their dreams will cost a pretty penny. Set up a savings account for your baby as early as possible. If friends and family members come to you looking for baby gift inspiration, suggest instead that they lodge the money they intend to spend into your child’s account. This will allow them to contribute to your baby’s future while limiting the possibility of any impractical gifts.

If you are expecting a baby or planning to start a family in the near future, an experienced financial advisor can help to alleviate any financial concerns you might have, while pointing you in the right direction when it comes to saving and clever budgeting. Get prepared in advance of this exciting new chapter by contacting Symmetry Financial Management today for a consultation.

If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.