Nappies, clothes, equipment – the costs all add up now your baby’s arrived. Here are some vital tips for saving cash with a newborn
Even if you weren’t a sleep-deprived new mum, the thought of budgeting would probably make you nod off. But with your baby’s first year estimated to cost nearly £9,500, it’s time to wake up to your new financial reality.
“Eighty per cent of parents are forced to make cuts on everything from bills to food in the current climate,” says family finance expert Sue Hayward (suehaywardmedia.com). “With a new baby, it’s even more important because it’s a juggling act between buying the best you can without skimping.” So don’t let money add to your worries, follow our experts’ advice for living on less.
Sue suggests: “Start with your mortgage, gas, electricity, travel and childcare costs and write down everything you spend. Cut back by shopping around on price comparison websites, and detox your bank account. Sometimes you can be shelling out for old insurance policies that have an automatic renewal or gym memberships you don’t use.”
Keep track of impulse buys, too. “Keep a diary of everything you spend for a week,” says Becky Goddard-Hill from babybudgeting.co.uk. “There are so many unnecessary expenses, like buying a coffee when you’re out rather than taking a flask.”
You can sort out your spending using the free online budget planner at moneyadviceservice.org.uk.
Nearly all families are eligible for Child Benefit, currently £20.30 a week for your first child and £13.40 for each other child, though this is set to change from April 2013. “The changes mean if one of you in the household is earning £44,000 a year or more, you won’t get any Child Benefit,” explains Sue. If you and your partner both work but each earn less than £44,000, you’ll still get the benefit, so single parents paying the higher tax rate will be hit hardest.
If you think you’re not entitled to any help from the government you might be surprised, adds Sue. “You can sometimes qualify for both Child Tax Credits and Working Tax Credits, depending on your income and the hours you work,” she advises. Benefits can be confusing, so check out direct.gov.uk for more information.
If you’re on a low income, you might qualify for Healthy Start vouchers to spend on milk, fruit and veggies or formula milk. See healthystart.nhs.uk.
Childcare costs average £4,280 a year – so start thinking about it now. “You’ve got to work out if your childcare costs and the impact on your benefits is worth you going back to work, or working part-time, so ring the Tax Credits helpline (0845 300 3900) and tell them your situation,” says Becky.
If you’re going back to work, childcare vouchers – where you give up some of your pay to put towards childcare costs – can really save you money, says Sue. “You’re paying for childcare from your pre-tax income. So let’s say you have £100; instead of losing 23% in tax, you’re basically using that whole £100 to buy vouchers and then you pay your childminder or nursery direct.”
The scheme doesn’t cost employers any money to set up, so speak to your boss if your company doesn’t offer it.
When your tot turns 3, you get 15 hours a week free nursery education for up to two years. See direct.gov.uk.
Costs of baby items can soon add up, so get creative. “Host a swishing party, where you and your friends set out all your second-hand stuff in your living room, grab a glass of wine and just help yourself to each other’s stuff,” says Becky. “Or go to charity shops and car boot sales in posh areas and you’ll get really nice stuff. eBay is another option – people often sell bundles of newborn clothes that are hardly used.”
If you do hit the shops, do it online via a cashback site, suggests Sue. “There’s a really good one called kidstart.co.uk. If you use it as a gateway to the High Street sites, you can earn around 10-20% cashback that can then go straight into your little one’s savings account.”
Reusable cloth nappies might be more work, but can save thousands. “You’ll have extra laundry costs, but it’s not really comparable to the cost of disposables,” says Becky.
Always try baby classes before you buy. Becky advises: “Ring them and say you’d like to try it before you sign up for 12 weeks because sometimes your baby doesn’t settle. They’ll almost always say yes, and you can get a sense of what’s going to be most fun and where you feel most comfortable.”
Parent and baby groups are another cut-price way to make new mates. “They can be intimidating, but if you go a couple of times and always offer to clean up at the end, you’ll soon make friends,” suggests Becky.
“Swap takeaways for supermarket meal deals. Waitrose has a great curry deal for two for £8 – it’s better than our local takeaway and we save at least £20.”
Kate Heath, 35, from Hertford, mum to Alex, 16 months
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