How to Organise Your Finances Before a Baby


Watching your baby grow throughout the years is one of the most magical experiences. Each day, you will watch your little one change and develop before your eyes, which will add more joy and meaning to your life. 

Yet, there is no denying that parenthood can place a strain on a person or couple’s bank balance. If you want to ensure you have a healthy cash flow before welcoming a son or daughter into the world, check out these top tips on how to organise your finances before a baby. 

A Clear Understanding of Your Finances 

Before you follow the additional steps, you must have a firm understand of your finances. It is crucial to review your income and monthly expenses, which will provide a clear understanding of your cash flow. 

Creating a monthly budget can provide an accurate insight into your fixed and variable outgoings each month. Plus, you must review your bank balance each month to review where you are wasting money, such as restaurant meals, takeaway, clothing or unnecessary clothing purchases. You can then identify a strict amount of money you can afford to set aside each month, which can prevent you from frittering away your excess cash. 

Reduce Your Debts 

Most people have some form of debt, from loan repayments and credit card bills to a mortgage or a car lease. Before welcoming a child into the world, you must look for ways to reduce your debts to improve your family’s financial security. 

For example, you may need to pay off an overdraft to avoid daily or monthly charges, or make overpayments on a credit card bill or loan. Also, consider switching providers to lower the price of your energy bills, insurance fees, car lease, TV package or mobile phone contract. 

Understand Your Maternity/Paternity Pay Rights 

It is a wise idea to familiarise yourself with your maternity, paternity or statutory maternity pay (SMP) rights. Your job, length of service, and national insurance contributions can determine your eligibility for maternity or paternity pay.  

For example, if you are self-employed, you must have paid Class 2 National Insurance for a minimum of 13 weeks of the 66 weeks before your baby’s due date to receive the full entitlement. If you haven’t made the appropriate Class 2 National Insurance contributions, you will receive £27 per week for 39 weeks. 

Perform a Soft Credit Check 

It is a wise idea to perform a soft credit check before welcoming a child into the world. Reviewing your credit score will help you identify if you are eligible for a loan or credit card, which could help you cover an unforeseen expense in the future. 

While you might not need to apply for a credit card or loan, a credit check could provide peace of mind that you will have a financial option should you need it. If you have a bad credit score, look for various ways to improve it. 

If unsure how to organise your finances before a baby or don’t know how to improve your credit score, reach out to an experienced financial advisor for assistance.

Build an Emergency Fund 

In addition to repaying debts and lowering your monthly expenses, you must attempt to build a healthy emergency fund. A rainy-day fund will ensure you can pay an unexpected expense with ease, such as replacing a faulty appliance. 

Aim to set aside at least three to six months of living expenses. It will make money worries a thing of the past. Plus, it will ensure your family is financially secure should you lose your job or experience a temporary injury that affects your income. 


Create a Baby Budget 

Babies might be small in size but they will require a significant number of belongings.  

Common new baby expenses include: 

  • Clothing 
  • Nappies 
  • Toys 
  • Books 
  • Childcare 
  • Toiletries 
  • Bottles 
  • Bibs 
  • Sterilisers 
  • Milk 
  • A pram 
  • Moses basket 
  • Nursery furniture 
  • Bedding 
  • A car seat 

Also, babies grow at a rapid rate, so you’ll be replacing their clothing in three months’ time, and transiting them from milk to food within six months. As a new baby will cost a substantial sum, you must create a detailed baby budget to ensure you have the cash available to cater to their every need. 

Invest in Insurance 

Most new parents will start to consider their mortality after welcoming a child into the world. Experience financial peace of mind when bringing a baby into the world by investing in one or more insurance policies, such as life insurance or disability insurance. It will ensure your son or daughter is financially protected should you pass away or experience a life-altering injury. 

Now you know how to organise your finances before a baby, all that’s left to do is to create a budget, find the right insurance policy, and create a baby budget.

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