Raising a child can be a very expensive endeavour, and without proper budgeting the mountainous costs can catch you off guard. If you haven't done so already, sign up for a free budget planner and find ways that you can cut your monthly spending. You're going to need the money.
This blog post details five other ways you can ensure you budget well for your son or daughter.
Child Benefit
It won't be the first thing into your head when you leave the hospital, but you can register for Child Benefit immediately when your baby is born. For your first child, you can claim £20.20 per week, and each additional child, £13.40 per week. If the child you are raising is not your own, you may also be entitled to Guardian's Allowance. If you don't claim within three months you could miss out on some of the benefits.
Claim Tax Credits
As well as Child Benefit, there are tax credits you can claim if you have children. Child Tax Credit is available to those responsible for at least one child, and depending on your income, having dependants may qualify you to receive Working Tax Credit.
Save for School Fees
Even if your child is newborn, it's never too early to start saving for their education. Schooling is likely to be the biggest expense you will pay for your children. UK parents spend on average £1,247 per year per child on things like uniforms, school trips, lunches, mobile phones, swimming lessons and music lessons. If you intend to send your child to University, the cost will be higher still. Start saving money as soon as you can.
Are You Insured?
If your family relies on your income now, they will struggle in the event of your death. You never know what's around the corner, so make sure you have an up-to-date Life Assurance policy that suits your financial situation. If you are healthy, the monthly fee is likely to be small. You can also consider a Family Income Benefit policy, which will pay out a guaranteed level of income to your family every month after your death for a fixed period.
Child Trust Fund
You can pay up to £3600 into a Government trust fund for your child if they are aged 10 or younger, or if they have been looked after by the local council for more than a year. The savings are tax free, and can't be withdrawn by anyone but your child after they turn 18. This can be a problem if you want access to the funds in case of emergency, but the fund will grow with interest, and if you are on a low income the Government will pay in extra money.
More articles on managing money as a parent from the Money Dashboard Blog:
How much does it cost to have a baby?
Is it ok to borrow from your kid's piggy bank?
