Tips on Budgeting For New Parents

Becoming a parent for the first time will always be daunting. There are so many things to consider, and most of them cost money. So, how do you budget for all your little one’s essentials?

The first shock comes when you realise how much you need to spend before your little bundle of joy even arrives, so protecting your family’s income is vital from the very start. If anything were to happen to you or your partner, you need to ensure that you have adequate life insurance in place to care of your children.


Level term life insurance pays out a pre-agreed amount if you die within a fixed period. The payout remains the same irrespective of how long you have held the policy or how much you have paid in. This means that should something happen to a young parent, their family will be looked after, however, it can mean you pay thousands of pounds more than you need if no claim is made.

A will is very important when you have a family to ensure your assets end up where you want. You will also need to decide who will be responsible for your child if the worst should happen. Father’s usually have parental responsibility if they are married to the mother, but different situations and locations vary so make sure you know where you stand in advance. You also need to consider who will look after your children in the event that both parents have died.

Child tax credits could be available to anyone with children irrespective of their employment situation, whilst working tax credits can be available to anyone who works whether or not they have children. You could be eligible for one or both types of tax credit so it is important to look into this. The credits are paid by the state directly into your bank account, but the amount varies according to your circumstances. You need keep the tax office updated about your situation as your payments can change, and they will claim back any over-payments.

There is also a Childcare Element Of Working Tax Credit which you claim if you pay for approved childcare for a child up to the age of 15. There are also Maternity Grants and Child Benefit so check what you are entitled to.

Childcare Vouchers are available from your employer and allow you to trade in pre-tax salary for childcare vouchers. You will spend the same amount on childcare but will be taxed on less earnings, therefore saving you money. This scheme is due to close to new participants in April 2018 so you need to sign up while you can.

It’s not just your finances that you need to think about; baby will soon need a bank account too! If your little one is given cash gifts on arrival then look out for an account with the best interest rate possible, but check whether there are caps on how much you can deposit in a year.

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What To Buy

Before you have your first baby it is difficult to imagine having more, but if the plan is for multiple children then consider the colour of what you buy. Drowning your newborn in pink is very cute at the time, but it limits what you can re-use if baby number two is a boy. What you can’t re-use you sell, so make the most of selling groups and websites.

When thinking about having another baby, it is worth remembering that you can get a free pregnancy test at family planning clinics, your GP and some clinics. Paying more for a test does not get your greater accuracy.

However active you plan to be, your child is highly likely to spend a good proportion of time in the car. You will therefore need to invest in a good car seat, and just importantly, make sure it is fitted properly. Whilst many stores will fit the seats for free, studies have found that they are still done incorrectly. Make sure that you read the instructions and check that the seat is safe and secure before your baby goes anywhere near it. Failure to do so not only puts your child’s life at risk, it also leaves you open to a £500 fine.

Many retailers will compete for the custom of a new parent, so there are often baby promotions with free discounts available. These goodie bags, loyalty points and birthday clubs often involve being added to extensive mailing lists, so be careful how many your sign up to if you don’t want your inbox to become flooded.

It is easy to believe that baby needs the very best of everything and you can easily be suckered into spending a fortune. Remember, the box the toy came in is often as much fun as the item itself, so think about the actual play value of the things you buy.

There are so many things on the shelves for babies that it can become overwhelming, but you really don’t need all of them. Think about how much use each item will get and ask friends which things they never even took out of the box before investing in wipe warmers and designer booties.


Parenting can be a lonely business, so make the most of apps and play groups that give you the chance to be in touch with others in the same position as you. A meeting of minds can be a good thing, and costly classes become unnecessary. There is help available to new parents from family, health visitors, midwives, SureStart centres and your GP, so do not be afraid to ask for help if you need it.

Saving Money

Nappies can be costly things, especially when you realise how many a baby goes through in one day. When you consider this could go on for two or three years, the pounds start to stack up, so it may be worth considering reusable nappies which can sometimes be obtained from the council for free. It is possible to save anything from £100 to £1000 with these nappies, so large families can save significantly with a wash and go approach.

It may seem logical, but you need to register the birth of your baby in a set time period or be face with a £200 fine. You will receive a short birth certificate and more detailed one can be obtained for a cost.

Medical costs can add up, but it is worth remembering that pregnant women and mothers of a child under one are entitled to free NHS dental work and free prescription. Free eye tests are also available in some areas.

Money can be tight in those early days as a parent, so you may want to consider a mortgage payment holiday which allows you to take a few months out of paying for your mortgage, however, you will still be accruing interest on the loan even when you are not paying it off.

Parental Leave

If you have worked for your existing employer for more than six months then you are entitled to maternity or paternity pay. New mums can get 90% of your average weekly earnings for the first six weeks, followed by £140.98 per week or 90% of their average earnings, whichever is lower, for up to the next 33 weeks.

Dad’s can also get £140.98 or 90% of their average earnings, whichever is lower, for two weeks after the child is born. It is possible to apply for 26 weeks of Additional Paternity Leave if the mother goes back to work early.

Out And About

Getting out of the house is essential when you have little ones, but it can cost nearly as much as your mortgage! Some cinemas will offer discounts and extra services for parents with young babies as well as clubs for older children, so check out what is on offer. Some supermarket loyalty cards also allow you to spend points on days out, so save these up for the school holidays.

One thing you never have enough of with newborns is time. If you can, prepare in advance by batch cooking and freezing meals that you will have neither the time nor the inclination to cook once baby arrives. Once you get to grips with things, put a proper family budget in place so that everything is planned for and you don’t get too many surprises.

Prams and pushchairs can prove to be a hefty investment so think carefully about whether you need light weight, a baby travel system for your car or something that folds away neatly and always compare prices. Refurbished prams can be a great way to save money with some major retailers now offering these after going through a rigorous checking process.

With a little one in the home there is no better time to stop smoking, and this is likely to save you a small fortune along the way.

Whatever the state of your finances, a baby will have a big impact, so take your time to consider every aspect in advance so you can enjoy spending more time with you bundle of joy.

Author Bio
Babaloo are baby and children’s clothes retailer, with a wide range of clothing and accessories for children.

Christian Edye