The Financial Implications of Parenthood: Planning for your family’s future

Becoming a parent is undoubtedly one of the most life-changing and rewarding experiences anyone can have, but it also brings about a significant shift in your financial life.

As my partner and I have started looking into a journey into parenthood, it has led me to question the financial implications that lie ahead of us.

From the day you find out you have a little one on the way, your financial landscape changes, and any financial decisions you make now could have a lasting impact on your family’s future. It is important to be strategical with any decisions you make, and a financial adviser can help with the key considerations and how to prepare financially for what lies ahead.

The initial financial impact of parenthood can be both exciting and overwhelming. From maternity & paternity leave to baby essentials, such as clothes and prams, to childcare costs, it all mounts up. A great way to combat these initial costs is to create a clear budget. Estimate how much time you plan to be off work after the baby is born, how much you’ll spend on baby essentials and how many days a week of childcare you may need to fund and try to fund these expenses ahead of time.

Parenthood can be unpredictable so saving up an emergency fund is also a great practice to offer peace of mind for any unexpected costs that might arise.

Saving regular amounts every month also sets you in good stead as your child grows up and the costs of extracurricular activities, clothes and even your food bill increases.

Finding out that you are going to become a parent is also a good opportunity to review your insurance policies and estate planning. One of the most important financial considerations should be life and critical illness cover. If the worst happens, you want to make sure that there is money for your child to live the life you want them to live.

You should also review your Wills and put a plan in place for guardianship of the child. This ensures your assets are distributed according to your wishes and your child is cared for by someone you trust should something happen to both parents.

Parenthood also allows you the opportunity to set a good example to your child. By prioritising savings, avoiding excessive debt, and making good financial decisions, you can instil these values in them and give them a good footing for their own financial journey. It is always a good idea to start a savings account for your child as early as possible to provide them with a head start towards their future goals.

Becoming a parent is a beautiful journey and you don’t have to face it alone. A financial adviser can help ensure your financial plan evolves as your family grows.

Whether you’re just starting out or already managing a growing family, we can help you build a secure future for you and your children.