How to budget for a baby

budget family saving Jan 22, 2021

Having a baby is one of the most exciting things any parent can experience. Of course, some panic is normal, however, babies are a source of joy and when you plan for their coming, you’ll have more control over your finances and how to spend on your child and family.

Many thoughts may begin to race through your mind as soon as you start contemplating an addition to your family, but most importantly, you should start prioritizing your personal finances. Doing this will help you establish good habits so you can make the most of your money.

In the UK, if you are expecting a baby, you are entitled to up to a year of maternity leave and a weekly maternity pay of at least £120 before tax for 39 out of 52 weeks off work. This leaves you with a significant reduction in income, which creates a financial void if not well managed. 

This is why it’s crucial to plan ahead with a baby budget so you can enjoy your status as a new mum without having to stress about finances.

Let’s take a look at how you can budget before the baby arrives. 

1. Start Saving in Advance


  • This is the most obvious and easiest thing on your budgeting list when preparing for a baby. You have to start carving out some more space for savings. 

  • Perhaps being pregnant means some of the items on your to-do list can be chalked off and the money put in a savings account.

  • Start living as if you are on the projected income you expect to be on while on maternity leave.

  • And gradually increase your savings to an additional 6-8 months to cover any additional expenses and emergencies

You could make a huge difference to your finances pre and post-partum when you put money aside ahead of time.

2. Spread Out Your Maternity Pay


  • If you are an employee, you should be entitled to statutory maternity leave. 

  • If the maternity leave policy offered by your company allows you to spread out payments equally over the months of your leave, then take advantage of it.

  • Doing this will ensure you don’t spend it all too quickly. Because while maternity pay starts off well, it dwindles within a few months to nothing. 

  • You can budget better by spreading it out. You can ask your employer to help you with this or you can work out how much to put aside on a month-by-month basis by yourself.

3. Get Your Bills Reduced In Advance


When you start to budget, you may find out that some of your bills could be cut down or removed altogether. 

You might decide that some of your bills are not needed and unnecessary. But for those you keep, ensure you are not overpaying for them. 

You can do this by finding comparison sites that help you get some cash back. 

By reducing your monthly outgoings, you’ll be able to save month after month and if you get some cash back from switching, that can also go into the savings pot as well. 

4. Get Rid Of Debt Before Having a Child 


Taking debt into parenthood with the impact of reduced income can make a less than fun experience as a parent. 

In the ideal world, we would all love to get rid of debts before becoming parents, but this isn’t always possible. 

So, aim to get your debt to manageable levels if you can pay it all up. 

It’s important to do this before a child comes because expenses can add up quickly, which can inadvertently cause debt to compound and result in default. This in turn can have a negative impact on your credit.

Its A Wrap

It’s a world of uncertainties when it comes to parenting, but if there’s one thing you can be sure about, it is that having a baby impacts on your finances. 

It’s essential to plan months ahead with a budget since your household income is about to change. 

Budgeting lets you take control so that while you are catering to your baby’s constant attention, your family’s finances continues to flow smoothly now and into the future. 

Get to saving now or if you need help, get support with creating a budget that works.


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