NB This is an advertorial blog for Aviva.
Whether you’re simply planning ahead or already have a little one on the way, raising a family can mean big changes to your family finances.
We’ve put together some top tips to help you start planning for the patter of tiny toes.
Make a family budget
From buggies to babygrows, having an extra member of the family (no matter how small) means you’ll need to set aside money in your budget to cover your changing outgoings.
Think about how much you’ll need to set aside each month and whether you need to cut back on any luxuries. As a guide, new parents on average spend £586 a month on children under 5 1.
Start saving early
It might be difficult to imagine now, but sooner than you think your little ones will be fleeing the nest – perhaps looking to go to university, get married or buy their own home.
If these are things you want to support, starting to save early on could leave you in a much better position to help out in future.
Looking at long-term savings options, such as investing in stocks and shares could also help your savings grow more quickly than a typical savings account (though remember there’s an added risk that investments could go down as well as up).
Benefits and tax allowances
Tax-free ISA allowance
Under current government regulation, you can benefit from a tax-free ISA allowance each year – allowing you to put aside savings without paying tax on the interest you earn.
You can also open and save into a cash ISA, an investment ISA or a combination of the two each tax year.
All families are entitled to a weekly child benefit payment of £20.30 a week for your first child (and £13.40 a week for all other children) 2. Only one parent can claim for child benefit and different rules apply if parents separate or join family units.
If your individual income is over £50,000 a year, you may have to pay what’s called a High Income Child Benefit Tax Charge 3.
Protect your loved ones with life insurance
It may be difficult to think about, but if something were to happen to you or your partner, you’d want to know your family is protected financially. Why not take the time to look at our Free Parent Life Insurance – a free, no strings attached, 12 month policy for any parent with a child under the age of four.
1 Research carried out by ICM, surveying 2,002 parents with children aged 0-5 in November 2014. Figure compiled by multiplying the number of children aged under five in the UK, according to ONS mid 2013 data (4,013,861) by the average annual cost spent by parents on under fives annually (£6,990).
2 https://www.gov.uk/child-benefit/what-youll-get – accessed 19/03/2018.
3 https://www.gov.uk/child-benefit-tax-charge – accessed 19/03/2018.