Before a baby arrives, there are a number of once-off purchases you will have to consider, such as a cot or car seat, as well as ongoing costs when the baby arrive, such as nappies and baby care products. To help you prepare for this, we have some baby steps for you to follow.
Balance your existing budget. Reviewing your finances is a great way to start planning for your new arrival. It will give you a clear picture of your financial situation, and you can use our financial health check to help you. You should include all your income and outgoings no matter how big or small to get a realistic idea of your financial situation. This will help you work out how much money you can afford to spend before your baby arrives.
Add up all your income. You may have to plan for a change in household income depending on your maternity leave entitlements and work situation. If you stop working, you should also take into account the impact that this will have on your travel costs. If you are considering the option of one parent staying at home, try spending a month living on one income as a trial run. You can then put that month’s second salary towards any debts you have, or use it to start an emergency fund.
If you are taking maternity leave, check with your employer to see what you are entitled to. If you are not sure what state benefits you may be entitled to, check with the Department of Employment Affairs and Social Protection at www.welfare.ie. Make sure to include any entitlements in your new budget. If you have a pension plan with your employer, it is a good idea to find out how it might be affected when you are on maternity leave, if you were to change your working arrangements, or take a career break.
Budget for baby. You can use our baby budget planner to help you work out everything you will need to buy before your baby arrives. Try spread the costs over the nine months so you are not trying to pay for everything in the last few months. Saving might not be as easy once your baby arrives, so try and save as much as you can afford to beforehand to pay for these items. You should also consider trying to pay off as much debt as you can, such as overdrafts and credit cards so that you are in a better position for the arrival of your baby.
You can make changes to your spending. Even small changes on non-essential items like dining out and buying coffees can make a big difference to your budget. Use our spending calculator to see how much you are spending on smaller everyday items.
Safety is important. Before you rush into buying anything for your new baby, consider which items are worth paying more for and which you can get more cheaply. Make sure that anything you buy for your child is safe for them to use. If you are not sure, check out our tips for buying toys, equipment and clothes for children.
Think about your baby essentials. Don’t feel under pressure to spend a fortune on the top-of-the-range buggies, highchairs and cots that you see in baby magazines or shops. There are ways you can save on your baby essentials. If you’re buying a few things at once, don’t be afraid to bargain or haggle with the salesperson, especially for the more expensive items. See if you can get any good deals in the summer or winter sales. You can also check out second-hand shops for maternity clothes or online for baby bargains. If you are concerned about paying for the really big baby items such as buggies or car seats, ask family and friends to contribute to the cost instead of buying gifts that you might not need. You could also ask friends and family for any equipment that they may not use anymore.
Emergency fund for a rainy day. It’s a good idea to build up an emergency fund to cope with unexpected expenses such as doctor’s bills. Saving even small amounts every week can really help set you up for the future. Our regular savings Money Tool will help you compare the interest rates available on savings accounts. You should also check out credit unions and An Post for savings accounts.
Protect your family. When you are a parent, you need to provide for your family today, but you also need to protect them into the future. None of us want to think that anything bad will happen to us, but you need to make sure you have the right insurance in place to protect your dependants if they rely on you for support.
Steps for the future. It’s never too early to start planning for your child’s future. If you start planning ahead now for large future expenses such as school and college fees, this will help to ease the financial pressures you may experience later on. Check out our Baby Steps booklet – stage 1 for more information to help you plan for the years ahead. Make sure you also stay on top of your pension payments for when you retire, as this is easy to forget when a child arrives.