Having a non-#RoyalBaby? Here are some budgeting tips

The news that the Duke and Duchess of Cambridge (a.k.a Will and Kate) are expecting their second baby will no doubt be a welcome profit windfall for gossip magazines over the next twelve months. And hearteningly, the happy couple seem determined to give their children as ordinary an upbringing as possible.

However, not every baby is lucky enough to be born with a silver spoon in their mouth – for most New Zealand parents, a new bundle of joy means tightening the purse strings.

In the absence of a royal pot of gold, most parents have to embark on a realistic savings plan to cover the cost of raising a child.

Good saving habits may not be able to conjure up a royal-style booty, but it will make the financial implications of having a child easier to bear.

  • Have a savings strategy – start saving as early as possible before the baby arrives to account for the future loss of one income. Forward planning will give you more peace of mind and flexibility when deciding how soon to return to work. If you have a mortgage, consider making extra repayments on your home loan to get ahead. Try to pay off other debts, such as the credit cards, to reduce the burden on the household budget. Also check any paid parental leave entitlements you may have early in the pregnancy.
  • Budget for baby expenses – work out how much money is needed for baby essentials, such as clothes, nappies, a cot and pram. Make sure you shop around to get the best possible deal on big ticket items. You can also make savings by purchasing some items second-hand, however don’t compromise on safety with equipment such as mattresses and car seats. Avoid buying too many clothes as newborns grow quickly. Differentiate between needs and wants.
  • Going back to work there are a range of factors that come into play when deciding whether to stay at home or go back to work. While this is a personal decision, knowing the financial implications will help. It’s essential to consider the cost and availability of childcare, your salary and subsequent tax bracket, and your entitlement to government benefits.
  • Saving for education – The cost of schooling can be a major financial pressure for many families. It’s important to research the schools you’re interested in and start saving early.
  • Take out insurance to protect your family – before the baby arrives it’s vital to get your insurance sorted. You could consider income protection and life insurance at a minimum to protect your loved ones. It’s best to get your cover early.
  • Put estate planning in place – it may seem out of place at such an exciting time, but making a will is essential once children are on the scene. In the event of a parent’s untimely death, careful estate planning will make sure their money ends up in the right hands after they’re gone and will determine who will care for the children.

The best way for expectant parents to get started is to prepare a checklist and then tackle it one step at a time. Do it early in the pregnancy while you still have plenty of energy and if help is needed, don’t be afraid to get some professional advice from a financial planner.

And let’s face it – once the baby arrives, all new parents definitely have enough on their plate without having to worry about money.

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