Guest Post: Becoming a parent – Changing your financial needs 

September 25, 2014 Off By Laura TMOT
Ah, your carefree twenties. Remember those days? Back when you were 21 and a student and you could stay in bed until 2pm and no one would care. In fact, it was positively expected of you. Isn’t that what being a student is all about, enjoying your youth so much you sleep through most of it. And isn’t that what we all would do if we could be that age again? That and probably eat more carbs and be even more recklessly irresponsible with our money.

Of course, your fiscal foolishness didn’t just stop when you graduated. It continued well past the age where ISAs and Excel spreadsheets should have become a regular part of your budgetary plans. And then you met your other half and it seemed finally you and your fiscally responsible partner were going to save for that luxury holiday in the Indian Ocean. There would be packed lunches, cycling to work and storebrand everything. And you even managed it too, for about three days.

On day four it was raining and windy and cold. And you weren’t cycling. Also you slept in, skipped breakfast and everyone in your office was going out for lunch. Bye bye homemade tuna sandwich. By the end of the week all your good work had been undone.

And then the big change happened. You got a new app that would do your budget for you. Actually that didn’t work out as you planned. No the big change was finding out that in nine months’ time you and your partner were going to have  a little bundle of joy. A bindle! Also a baby, more importantly a baby.

And while you promised yourself throughout the first few months of the pregnancy that you were going to sort out your fiscal ways, by month five not much had really changed, besides the fact that you’d splurged on a really expensive crib and a range of hipster baby prison clothing that read: “Been inside for nine months”. And already you’re both into your overdrafts. 

As month seven approaches, scans reveal an actual little person rather than a sort of amorphous blob and the bump becomes positively ginormous, you’re both starting to panic. What are we going to do? We’ve another mouth to feed? Another life to look after? You want to change your financial habits of a lifetime but you can barely change a lightbulb.

Don’t panic, there are plenty of things you can do when it comes to caring for your new-born. And you don’t need to necessarily plan nine months in advance, although that would definitely help.

For one, you could start doing your shopping online. Many studies show that physically going into a shop only leads to impulse buying. So get as much stuff as you can online and avoid that extra novelty t-shirt that your baby probably won’t appreciate.

Don’t be afraid to shop second-hand. One thing you probably won’t be all that short of in the first few months is baby clothes, as every generous friend and neighbour will donate all sorts of excellent goods. However there will come a point when toys break, clothes tear and little Stephanie outgrows everything she owns. Don’t be too proud to go second-hand. Chances are you’re already donating clothes to friends and charity shops, so why not make use of these options yourself?

Next, make your own baby food. In case you’re not aware yet baby food is really expensive, making your own is generally easier, so just do that. You don’t need any fancy equipment or particularly special food. A blender and steamer should sort you out.

On that front, you don’t need a million toys, in fact your car keys will probably keep your baby happy for hours on end. Similarly babies never get tired of looking at themselves in mirrors, while, for some odd reason, TV ads are hypnotic to toddlers. It’s not unusual for new parents to record hours of the stuff and just play it back to their child on a loop.

Now of course, sometimes it’s hard to be as frugal as we’d like to be. If you are in fact partial to spoiling your little one every now and then, why not consider getting yourself a credit card that offers cashback. Every time you spend you’ll be rewarded with a percentage back of your spend. You can often either claim back the money in cash or alternatively trade in your earnings for a voucher of a higher value if you’d prefer, leaving you feeling a little less guilty for giving in to that adorable little face.

Childcare is, of course, one of the big expenses. You might qualify for childcare tax credits, so make sure you’ve checked that out. Also younger children are entitled to free early education from the age of three to four, so might as well make use of that. Au pairs are generally the cheapest form of paid childcare, so that’s also an option.

So, by month nine you should be ready. Maybe you’ll even have turned over a new financial leaf and be utterly fiscally conservative, maybe even smug in your maturity. And then the baby arrives and blind panic kicks in. But don’t worry, you’re supposed to feel like that…