Having a baby doesn’t just affect your sleeping pattern, it can also have a significant impact on your bank balance.
In fact, raising a child to the age of 18 could cost you an eye-watering £192,000 according to figures from NatWest, and it doesn’t stop there. Expats working in the UAE have the added cost of education and medical bills to contend with, on top of rent – one of the biggest expenses in the region.
You get the point, having a child isn’t cheap, but there are ways to ease the stress. Our financial tips for new parents are a great place to start, but speaking to friends and family can also give you some money-saving ideas.
1- Create a budget – And stick to it
Remember, the cost of having a baby starts before birth. Decorating the nursery, baby-proofing the house, all these costs start to add up and before you know it you have spent a small fortune – and the baby hasn’t even arrived yet!
Creating a budget is one thing, sticking to it is not so easy. With the cost of having a child coming in at just over £9,000 in the first year alone, having a budget is a great tool to have in your arsenal.
There are a number of budgeting apps and online tools, you could even write it down on paper – just make sure you don’t lose it. Whatever method you choose remember to include everything. No matter how small, all costs add up so be detailed.
A budget might be a great way to keep on top of your finances but why not take things a step further. Look at your outgoings and see if you could make some cuts and divert funds to other areas such as savings.
2- Start saving
As a new parent, you probably don’t want to think about your child growing up but you might want to consider saving now so that you can help them in the future. Whether it’s university costs, maybe money towards a car or even helping them onto the property ladder, children past the age of 18 could set you back as much as £85,000.
3- Have an emergency fund
Unemployment is stressful enough but when you’re a parent it can be downright terrifying.
We have already talked about the cost of raising a child so having an emergency fund is a smart move and something worth factoring into your budget. Hopefully, you won’t need it but you will thank yourself for including it in your budget if you do.
Having that financial cushion while searching for a new job will take some of the stress away. Experts usually suggest having an emergency fund that will cover 6-12 months of living expenses but something is better than nothing.
4- Insurance
So far we have spoken about saving money rather than spending it. However, one expense that you should consider adding to your budget is insurance.
Life insurance provides financial security for your family should the worst happen. Whole-life policies usually provide the most comprehensive cover but are not great for your budget due to their high premiums. Term coverage might be cheaper but also comes with its own drawbacks.
Return of premium life insurance might be a good middle-ground for new parents as this can also act as a savings account.
5- Make a will
None of us likes to think about our own mortality but as a new parent, a will is important. A will isn’t just to decide where your money and possessions go to when you die, it also allows you to name a legal guardian should something happen to you and your partner.
For more information, please contact me. I will be happy to help with whatever questions you have. www.rgwealthsolutions.com +6011-51565649
Comments