Planning for a family
There are so many vitally important, exciting preparations to make when you are expecting a new baby. While financial planning may not be the most interesting task on the ‘to do’ list, it is definitely amongst the most critical and certainly should not be put off.
Raising a child to the age of 18 can be a costly affair, especially when childcare and school fees are factored in. And parents will typically find themselves having to meet these new costs on a significantly reduced household income. Thorough financial planning before the birth is therefore imperative.
Save, save, save
It’s always a good idea to open a savings account before starting a family in order to amass the funds required to cover initial expenses and to help finance the early months when most new parents take a hit to their income. Additionally, reducing outstanding debts is often a sensible strategy that can ultimately save money in the long run.
As well as finding the money to meet the initial costs of a new baby, there are a number of other financial planning decisions it is advisable to consider when starting or expanding a family. For instance, welcoming a new arrival into the family may necessitate extra life protection, a new Will, a change to the named beneficiaries in a pension and even the opening of new savings or investment accounts such as Junior ISAs.
So, if you are considering parenthood, it makes perfect sense to review your finances first in order to ensure a financially secure future for yourself and, more importantly, for your whole family.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
The above article is purely for information purposes and does not constitute advice.