Baby on the Way - Money saving tips and financial information from The Investing Site

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Baby on the Way

March the 6th marked the start of Mother and Baby week in the UK so we decided to take a look at the financial responsibilities of becoming a parent over the short and long term.

A survey conducted by Halifax Financial Services shows that in preparation for a new arrival, buying cots, toys, baby clothes, baby accessories, etc.. will cost in the region of £860 for the average parents to be. A figure that both alarms and shocks new parents. There are of course other charges to be taken into account, such as maternity clothes over the last 9 months, and the costs of setting up your nursery.

We all know what we should be doing of course, saving now for later events such as driving lessons, university fees and housing at some point. If we know it, why don’t we do it? Well maybe it’s because all of these future events are a long way off and we live in the now. Unfortunately these costs are the largest we will face as parents, and very real.

The National Union of Students (The NUS) puts a total cost of £30,000 on university, to include tuition fees and living expenses. I’m sure you’ll agree, saving now is becoming more and more appealing.

A quick and simple way to help save for these future costs would be to set up a child trust fund (CTF) from an Inland Revenue approved supplier such as you bank or local Sainsbury. This not only allows you to benefit from an initial £250 from the government but also provides you a way to make regular tax free investments for your children.

As an example, I received this information from my local high street branch of Halifax;

‘The Halifax Stakeholder Child Trust Fund will invest in a FTSE 100 tracking fund, managed by Insight Investment, for long-term growth potential.’

They boast good benefits such as no initial or exit charges, which mean no fee’s for starting or ending the investment, they also don’t charge any other fee’s aside from a 1.5% management fee each year. As with most investments though you are penned into the amount you can or can’t invest each year, the maximum you can invest is set to £1,200 each financial year and the minimum is a realistic £10.

All of your investments into your CTF (Children’s Trust Fund) will be placed into your FTSE 100 tracker fund until your child is 13 years of age. They will then be gradually invested into lower risk ‘Lifestyle’ investments until your child reaches 18 years of age. As with any trust fund there are no withdrawals allowed until your child reaches 18 years of age.

“This is an ideal opportunity for all qualifying parents to start saving for their children’s futures. Putting a little aside every month means that by the time your children are 18 you could have built up an impressive nest egg.” – Ray Milne, managing director of Halifax Financial Services.

Like most parents to be you are probably worried about how you will manage financially, especially if you aren’t in receipt of paid maternity leave. A new born baby can be quite costly, but there are ways to avoid getting into serious debt if you are prepared to be a little frugal. Although you won’t be able to resist some items, try and avoid the temptation to buy every single ‘cute’ baby thing you see. Here are a few tips to help you save money and save for your baby;

Got a blender? If so, do your baby a favour and make your baby food. It’s OK buying those mass produced, preservative packed ‘cute’ jars of food, but your baby will thank you for making honest, wholesome food from scratch. Your baby will be much healthier as a result. Those jars soon add up and your pocket will also thank you. Don’t know how to do it? Here is baby food 101, pay attention. Take what you are intending on making into baby food and blend it. Simple! Apples, pears, bananas, carrots, peas, even soup! But also be aware that if you use soup or processed products they may contain salt. You should consult your doctor on the levels of salt your baby can consume.

Adam and Eve wore fig leaves, now while we can’t expect junior to run around wearing a plant, we can ask our family and friends if they have any baby clothes they no longer need. Most clothing of pre-walking age will barely have been worn, if at all. Babies grow so fast at this age you should try to go to boot sales also, but remember to wash the clothes before your baby wears them. While you’re at it why not buy clothes that are a couple of sizes bigger than you need, as I mentioned earlier, babies grow so fast at this age, they will ‘soon grow into them’ – I can’t believe I just said that, my mother would be proud. Shoes are merely decoration until the little one is walking so invest in some good socks instead; at least warm feet have a benefit.

To pump or not to pump, that is the question. Breastfeeding will save you well over £1,000 over the term of your baby moving to solid foods. Formula is so expensive and cannot compare to your lunch-time menu of breast milk packed with every vitamin, protein and nutrient your growing baby needs. You may need to buy a breast pump and some accessories such as bottles so you can maintain your modesty while out shopping.

Disposable nappies are responsible for over ¼ of UK landfill sites, taking years to degrade into something more appealing than a lucky dip diaper. Use cloth nappies which will save you lot’s of money compared to disposables. You will have to wash them however and if the thought of washing dirty nappies brings a lump to your throat then you can always opt for own brand disposables. Try shops like Sainsbury, Tesco & Safeway; they almost always have their own brand of popular items, in most cases made by the same people who bring you the name brand products.

One last tip before I go, furniture. Don’t buy anything with a price tag over £10 until you check with your family and friends first. Most people never get around to disposing of baby things once their baby no longer needs them, so into the loft they go. Always invest in a new cot/crib as older ones may no longer meet safety requirements, while on the subject always, ALWAYS buy a good quality car seat form a reputable retailer. If possible have them fit it also – your baby’s life is at stake.


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