Preparing for the patter of tiny feet is an exciting, if somewhat daunting, time. And such a momentous event will clearly have major implications for household finances. So, while financial planning may not feature at the top of many prospective parents’ ‘to do’ lists, it is a key action that will need to be tackled.

Financially stretched

Raising a child is an expensive business, particularly when childcare and school fees are factored in. Additionally, new parents typically find themselves having to meet these extra costs on a significantly reduced household income. This means most people find themselves more financially stretched when they start a family than at any other point in their lives. Planning for a new arrival

Take stock of your finances

It’s therefore vitally important to work out a budget before the baby is born. Opening a savings account is also a good idea in order to amass the funds required to cover initial expenses and help finance the early months when money can be particularly tight. In addition, reducing any outstanding debts can be a sensible strategy that will ultimately reap rewards in the long run.

Look to the future

It’s also advisable to consider other financial planning issues when starting or expanding a family. For example, your new arrival may necessitate extra life cover, a change to named beneficiaries in a pension, a new will or the opening of new savings or investment products such as a Junior ISA.

Review your finances

In short, thorough financial planning before a new arrival is essential. So, if you’re considering parenthood, it could be the perfect time to review your finances so you can be sure you, and all your family, stay financially secure.

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

cafs logo

Fill in the form below and one of our experts will be back to you within 24 hours.