A Guide to your Family’s Finances

Article by Ewan King

www.madisonwealth.co.uk

Madison Wealth Management

Question

How is it that these little people living in our house cost us so much money?

Answer:

They just do!

A better question

How do we ensure that we can afford to provide the best possible start for these little people living in our house?

Answer:

Good budgeting, simple tax planning and don’t spoil them (too much!)

 

As a financial planner, a father of one and with number two on route in May, I understand the importance of budgeting for a family.

When planning for a family, a big concern nearly all of us will have is money. As in will we have enough to ensure we can still live a (fairly) comfortable lifestyle whilst providing for our children? We all want the best for them – you may want to send them to private school and perhaps you may be already considering the cost of a university education.

Before all of that though is the equipment you will need for junior. The cot, the moses basket, the pram, the car seat, the monitor… the list is quite literally endless – I remember putting together a spread sheet with close to 100 lines of different items we needed for our first child.

The key here is to ensure that you know what the family budget looks like. Include every little expense that you can think of as they all add up. It is worth looking over a couple of months’ worth of statements just to make sure you don’t miss anything.

Next is to ensure that you have a detailed knowledge of your family income throughout your maternity leave. The amount of maternity pay can vary dramatically from company to company, so make sure you know what you are due to be paid and for how long.

Now what? Well you need to ensure that you can budget for all of those essentials above. It may seem a bit extreme but use a baby planning guide (a spreadsheet) and put an approximate cost next to each item. You will be surprised as to the total cost of everything.

It’s worth building – if you can – a “baby pot”. This is can have a number of purposes throughout the first 12 – 18 months of your baby’s life. Potentially you will see a big drop in your joint income, however you can use this pot to help subsidise your lifestyle during your maternity/paternity leave. If you decide to go back to work you may want to use this money to help with nursery fees (more on that point next).

With the ever increasing cost of nursery fees, £177 on average per week (much more in central London), it can seem like you are only working to send your children away! There are a few things to consider at this point. The first is what help is there available via child care tax credits – you may only be entitled to a small amount, but it all counts. The second is does your company offer childcare vouchers? This is a benefit where you can buy child care out of your salary before any tax or national insurance is deducted. This can make a significant difference to the cost of nursery.

One really important tip is to make sure you have sufficient life and critical illness insurance in place. I know death and morbidity is something we Brits don’t like to discuss, but for the price of insuring a well-known fruit based smart phone you can cover your family for that unexpected issue.

The above just covers some of the basics but there are lots of additional ways to maximise the savings you may have to get you through those first few years.

The key to all of this is planning – if you start out with a good and effective plan you may never even notice the difference financially.

Please visit my website to access a number of useful downloads such as a budget planner. You will also find useful information on pensions, investment as well as our services – www.madisonwealth.co.uk

 

By Ewan King.

I own and run Madison Wealth Management, in Sheffield. We are a fully independent advice firm and are not tied to any one product or company. We charge fees and can build plans to suit most family’s budgets. We work with clients all over the country and are always happy to have a discussion over the phone. You can also email me directly on ewan@madisonwealth.co.uk.

 Find me on Twitter https://twitter.com/MadisonWealth

 

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