Having a baby can be a wonderful, yet life-altering experience. While you want to be able to enjoy every moment together, you might also need to start looking at your finances more seriously, both in the present and for the future. This can help you to avoid any payments that may put you into debt, while also giving your child some options of their own for when they eventually grow up.
Even though you may have another 18 years or so with them living at home, you want to make sure you consider all your options now, so that you can make informed decisions and not be caught out if unexpected expenses occur.
You might have heard of ISAs that you can save in, without the fear of tax costs, each year, but these are also available to save on behalf of your children. ISA providers, such as at this site, allow you to open accounts for your children, depositing up to £9000 each tax year. With this, you can gradually put money aside for when your child eventually turns 18. You can put in as much or as little as you like, depending on your financial situation, and interest will be accrued on that money over time. This can really help your child in the distant future, such as if they want their own vehicle, or even to go travelling.
Planning for a Rainy Day
Putting money aside in case of an unexpected circumstance or emergency is something that all people should consider doing, regardless of whether or not they are a parent. By setting up a savings account, you can create a pool of money that can be used should the need arise, such as if you need to replace your windows or simply want to splurge on a family holiday.
Considering the number of tasks you need to remember when caring for a new-born baby, it can be a good idea to automate your savings, meaning the money will be taken from your main bank account each month without you needing to authorise or lift a finger, allowing you to get back to your time with your infant.
Many people have heard of the idiom of ‘keeping up with the Joneses’, and it really applies when you are a new parent. All too often, new parents feel the need to buy the latest and best brands and toys, even though they may not be essential, or even needed. This feeling can be made worse when seeing what other parents have for their own offspring. Instead, cut back to basics. You can ensure your child has everything they need, without putting yourself severely out of pocket for it.
Whether you have become a parent for the first time, or have just given your existing children a sibling, you want to still make smart financial decisions. By considering your options, as well as looking to the future, you can ensure you are prepared while still enjoying those precious moments.