Steps to avoid new Baby Debt…..

Welcoming a new child into the family is a moment of natural happiness and a wonderful euphoria that can be indescribable for those not fortunate enough to have children. It is however a highly sobering thought that a new child can impact severely on your finances. Reading this article on new baby debt should not blunt the wonderful experience of looking after your new born, but instead be an enhancement of the financial measures required to ensure your families prosperity.

The cost of the child through nappies, clothes, milk and care is considered at the forefront of the expenses whilst the wider implications need to accommodate investments in the pram, utilities, a separate room, and the monetary impacts this will have on other aspects of life’s outgoings.

Throughout my research on families within the UK the best causes of financial management have originated through planning and research.  Here are some tips to avoid new baby debt within contemporary financial planning.

  Budget – Whilst preparing for the birth of your child, try and save 10% of income into a trust fund that can be used as a safety net for any unforeseen circumstances. The baby’s welfare will become the main priority and ensuring the correct resources are available to deal with this are incredible important.  If no proper planning is made, then seeking short time financial solutions can be more costly in the longer term.

  Lifestyle – A meticulous review of existing expenditure should ensure that your home financial forecast is both accurate and plausible.  Disposable income should avoid being spent on niche products but instead focus on sustainable options available to your family and children.

  Childcare – Sometimes when there are multiple life errands to complete, having a babysitter can be a beneficial and cost effective option. Research into day-care child opportunities should consider the most effective options available and do not be afraid to ask for help from friends and relatives when times are challenging.

  Financial Income – When income is short try to avoid relying on credit cards as this will almost certainly incur higher interest then other financial options. There are multiple routes to explore for credit and managing your income prior to your baby’s arrival to avoid this necessity. Do not forget to plan the use of child tax credits and government incentive schemes as this can provide useful additions to your capital.

Maternity Leave – Employment law is friendly to maternity leave during pregnancy and birth but be careful to ensure you retain the full financial income available during this period. The management of your employment before you depart is also critical to ensure that upon returning, you can still climb the career ladder quickly and a debt free business will be vital to your happiness when returning.

   Unnecessary Expenses – Expensive baby clothes are often an unsustainable luxury as babies grow very quickly and will undoubtedly not appreciate the current fashion trends. Equally once your baby progresses to solid foods, utilise your garden vegetable patch as oppose to the dependence on supermarket products as this is a costly and less healthy option.

Author Bio – James Barnett is a writer on behalf of Cooper Matthews  analysing contemporary wealth management for families across the UK. 

(Guest Post)