Saving for a baby

If you and your partner have recently made the decision to try for a baby, you’re probably already aware of the costs you’ll face as a result. While the cost of raising a child has decreased substantially since 2015*, it’s still calculated to cost parents over £70,000 from birth up until age 18. 

However, the decision to have a child is unlikely to be one that is taken lightly, meaning that most parents will aim to save for a baby after deciding it’s something they would like to do. Here, we explore the different areas you need to consider when saving for a baby, as well as some handy hacks you might not currently be aware of. 

The obvious first step with any savings goal is to organise your finances. You should get everything together and set out a detailed budgeting plan to see how much you are reasonably able to save each month. Organising your finances before you start to save (and before you have a baby) will also relieve you of some stress when the baby arrives, as your energy will be needed elsewhere once they are here. 

You should also ideally take this time to consider any debts you might have and pay any costly debt off before the baby arrives. With only nine months at most to prepare yourselves, you might want to consider quick, simple and easy savings hacks such as savings challenges and short-term fixed rate bonds. 

A new baby will inevitably put an extra strain on the family finances, which is why it’s a good idea to put together a budget plan for before, during and after the baby has arrived, so you have a rough plan for the future. 

If you’re a first time parent, ensuring you’ve bought the right thing can be an expensive, overwhelming minefield. Many products, such as vitamins and supplements, have a ‘pregnancy’ range that hikes the prices up, but still offers the same benefits as a normal vitamin package. From nappies to new clothes, we’ve explored the possibilities for cutting costs so you can save the difference. 

1. Get freebies and discounts

If you’re savings-savvy enough, you can enjoy everything from free trips to the cinema through to recycled toys and books. Use websites such as Facebook Marketplace and Freecycle for helpful hand-me-downs, and check with your local cinema whether the little one can sit for free on your lap. Some supermarkets, such as Asda and Boots, also provide parent & baby points clubs that offer exclusive discounts and loyalty reward schemes tailored to new parents. 

This blog provides a good roundup of what expectant mothers can get for free from various different providers. 

2. Don’t stock up before you know the baby’s preferences 

While it’s a natural instinct to over prepare for your new arrival, especially for first time parents, you might want to avoid spending too much money on things such as formula and food before your baby has tried them. You might find yourself throwing expensive things away in the face of intolerances and an upset tummy, so try not to stock up too much where possible. 

3. Think carefully about nappies

Your life is going to change forever when your child arrives, meaning certain habits might no longer be feasible. By cutting back on your daily expenses now, you should be able to save more by the time they arrive, and enjoy having more money when they are here. 

1. Sign up for cashback deals

There are many cashback websites available that offer bonus cash gifts when you make a purchase via their website. For costly essentials such as prams and cribs, this could really pay off. 

2. Stop smoking 

Not only is smoking seriously harmful to you, your unborn child and those around you, it’s also an incredibly expensive habit that costs people thousands of pounds each year. By making an effort to stop smoking in preparation for caring for your child, you’ll be healthier both physically and financially when the big day comes around. 

3. Shop second hand or take family hand-me-downs 

If family members or friends have already had children, they might be able to help you by sending any second-hand toys and clothes your way. Due to the rate that most babies grow (and the mess they are likely to make), you won’t want to spend all of your money on pretty, pristine clothing for it to only last five minutes.

4. Plan against impulse buys 

If you’re an impulse buyer who might be likely to blow the baby-budget on things you don’t need, you might be better off planning ahead and locking your other funds away until the due date. You could do this by opening a six month fixed rate bond or a notice savings account that requires you to inform your bank of any withdrawals you need to make. 

5. Find cheap activities for playdates & date nights 

Connecting with other new parents and their babies, as well as remaining connected to your partner, is crucial to help you through this new stage of your life. Rather than spending countless amounts of cash on coffee dates and date night trips to the cinema, check out what offers and deals are available in order to stay within budget. 

After the arrival of your child, you’ll likely be more concerned with the future and how you can plan for the unexpected. There are a few things you can do to ensure the best start in life for your little one. 

1. Sort the paperwork 

You’ll need to register the birth of your child either at the registrar of the place of birth or at your local registry office. This will provide you with a birth certificate and establish the identity and rights of the parents. You could also face a £200 fine for not getting this done within 42 days. 

2. Protect your family

Having children is often a stark reminder of how precious life is, which is why you should ensure that things are in place in the event that you die. That’s why you might want to consider taking out a life insurance policy that suits both you and your partner, giving you complete peace of mind that your family will be okay in the event of your passing. This, however, is a huge decision to make and if you’re unsure about any aspect of it, you should seek independent legal advice. 

3. Write your will 

Establishing certain factors, such as who is to take care of your child and what happens to your assets and finances in the event of your death, are part of being a responsible parent. Having a baby is the ideal time to consider writing a will, and is usually something that is done alongside your partner or co-parent. 

4. Help your child with their future 

You can also put things in place for your child that will help them in the future, such as opening a children’s savings account. By looking into accounts such as children’s bonds and child trust funds, you could take advantage of specific tax perks and fund their future. This might be something you’d like to set up straight away to take advantage of any cash gifts given by friends and family members in celebration of your baby’s arrival. 

Here’s what you can do to save effectively for a baby:

1. Budget

2. Take advantage of the offers and benefits available to you

3. Sort the paperwork immediately after the birth

4. Write your will and consider life insurance

5. Open a child savings account to prepare for their future

* https://cpag.org.uk/sites/default/files/files/policypost/CostofaChild2020_web.pdf