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Having a baby is one of the biggest changes that can happen in your life and with the costs of raising a child going up, it’s important to plan ahead.
Hormonal ups and downs bring feelings of excitement, anxiety, nervousness, elation and fear; but along with managing all these emotions your finances play a massive part in preparation for a baby.
The drop in income along with the costs of a new-born can cause even the most stable household budgets to buckle. However, with a little planning you can minimise the worry of having a baby on a budget.
We don’t live in an ideal world and for some people pregnancies come as a surprise (hopefully a pleasant one!). Whatever your situation, start planning your finances as early as possible.
Sit down and work out a budget to see if there are any changes you can make:
Read our guide to saving money and increasing income to get some tips.
Have you got any debts that are manageable now, but that may become unmanageable when your income decreases?
Don’t leave it until after the baby arrives – now is always best. Get some free and impartial debt advice now so you can start to think about how you’ll manage. Your creditors may not think you need help, but it’s worthwhile starting to prepare your finances now.
Find out what your company pays for maternity leave. This information should be available in your contract but if you’re unsure, speak to a HR advisor in confidence.
Work out how much you’ll receive and how long for, to help you assess how long you can take off work. If you need any advice about being treated fairly by your employer during your pregnancy speak to Acas.
There are a variety of benefits available to new parents:
You’re entitled to paid time off for any medical appointments relating to your pregnancy. This also covers parenting classes if these have been recommended to you by your doctor or midwife.
You’re entitled up to 52 weeks Statutory Maternity Leave. You don’t have to take the full amount but you must take 2 weeks’ leave after your baby arrives. The first 26 weeks are ‘ordinary maternity leave’ and the following 26 weeks are classified as ‘additional maternity leave’.
You’re entitled to Statutory maternity pay for up to 39 weeks. For the first 6 weeks you receive 90% of your weekly earnings before tax. For the following 33 weeks you are then entitled to £139.58 or 90% of your weekly earnings (whichever is lower). This is paid straight into your bank account and tax and national insurance will be deducted.
You can use the government’s maternity calculator to work out your leave and pay entitlements.
Expectant fathers are entitled to up to 2 weeks leave from work; check if you are eligible. To apply for paternity leave you must inform your employer at least 15 weeks before the birth and inform them of:
The statutory weekly rate of Paternity Pay is £139.58, or 90% of your average weekly earnings (again, whichever is lower). This will be paid into your bank account and normal deductions for NI and tax will be made
Once you have a child you’ll be entitled to claim child benefit – £20.70 per week for the first or only child, and then £13.70 for each additional child.
You may also be entitled to child tax credits and other non-child related benefits such as housing and council tax benefit.
Don’t forget that dental care and prescriptions are free up until your baby is one year old.
To be sure that you are claiming all your entitlements use our benefits checker or contact your local Citizens Advice Bureau or Jobcentre.
With friends and family asking how your preparations are going and your ‘nesting’ hormones kicking in it may be difficult to curb your spending.
It’s easy to think that you need everything ready in matching colour schemes months before the baby is due but try to keep your spending in check.
Remember, you can always ask someone to get something for you if it’s needed urgently after the baby is born.
There are lots of free apps and online forums available to help you prepare for becoming a parent, they can help you feel supported and give you money saving tips during pregnancy and beyond:
It’s also a great idea to find local parenting groups and meet ups so that you have extra emotional support.
It’s probably the last thing on your mind right now, but when it does come to returning to work it’s important to consider all your options. Find the answers to questions like:
There’s a lot to think about so take the time to look at all the possibilities.
Having a baby is a happy time and it’s vital that you look after the health and wellbeing of you and your baby before anything else.
Try to remember that there’s very little that a baby actually needs – a healthy and happy upbringing far outweighs having the latest gadgets or designer clothes but with a mother deep in debt.
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