Here are some helpful tips on preparing for a baby financially. The financial side is one of the biggest considerations of our generation when thinking about having a child. At Hera Family Care we have collaborated with Aunjane Johnson, a holistic financial consultant, to give us a breakdown of what you may not have thought about when it comes to having a baby.
1. Plan Ahead for Childcare
It’s extremely important to discuss who will be caring for your child when you return to work. If you are married, will one of you transition to working from home, or become a stay at home parent while your partner works or will you find a nursery?
According to The Times, the average cost of raising a child from birth to 18 in the UK is the equivalent of €202,660. This includes housing and childcare costs. That’s around €11,250 a year, or €938 a month. Of course these figures may differ in Greece and may be higher or lower depending on your location. Ensuring your child is safe and well cared for can be a major concern as a first time parent which is why it’s important to tour nurseries, assess family members who are available and make sure you never ignore any red flags about any childcare centre or family member who will be caring for your child.
2. Start Your Emergency Fund
Preparing for a sweet bundle of joy can cause some financial stress in the event you acquire an unexpected emergency expense while keeping up with your baby’s constant essential needs. It’s extremely important to keep a minimum of 3-6 months of your expenses in an interest bearing savings account at all times. Feel free to be an overachiever and choose to save 6-12 months instead if you are in the financial position to do so. Keep in mind it’s going to cost about €1200 for your child’s essentials. You can cut these costs by utilising marketplaces and family members who may have smaller children and are looking to pass items along. Reuse and recycle! New parents typically prefer all brand new items but there is absolutely nothing wrong with either option as long as you are utilising safe practices and cleaning the items effectively before use.
3. Get Quotes for Life & Health Insurance
No one likes to discuss life insurance but there is a little human on the way who would need to be cared for properly if anything happened to one or both of their parents. You don’t need a massive amount to start but enough to pay off or eliminate debts that would be taxing or difficult to balance in the event of the inevitable.
Life Insurance isn’t as expensive as you think and contrary to popular belief there are certain living benefits or riders you can utilise while alive if you qualify for them. There are many different companies that provide life insurance and if you do your research you can find the one that is appropriate for you.
There may be more permanent options available in the Greece, the UK and over Europe, I would suggest seeking a financial professional to discuss options that can build cash reserves for you (tax free is possible) and a term coverage option can help cover a larger amount of expenses for a more affordable monthly payment and a set period of time. Securing your new family should be your #1 goal.
Health Insurance is definitely a necessity to ensure your child receives the proper care. The last thing you need are sky high medical bills while navigating the new financial responsibilities of a child if you are not using the public health system. If your child attends nursery or school and happens to get sick, your insurance will help cover the costs of any paediatric E.R.visits if you opt for private hospitals. Utilise the National Health System that is in place for universal healthcare.
4. Plan ahead for Parental Leave
It is extremely important to speak with your employer about your parental leave options at least 3 months before your due date to allow your request to be processed effectively. Depending on the country you live in, you may be able to take a longer leave from work and receive a form of short term disability to keep some form of income while you are home taking care of your baby. Speak with your employer and research your local laws and regulations regarding parental leave to make sure you are given adequate time to care for your new baby.
5. Prepare A New Household Budget
Your monthly costs will increase with your new bundle of joy so make sure you are prepared with a new budget considering doctor visits, nappies, wipes, formula if used, sterilising equipment, nursery ,clothes, food and toys as your baby grows. The average monthly costs could range from €300-700 per month. I have attached a helpful resource to assist with your financial planning. You will feel relieved and prepared if you begin to research and create a realistic budget now. Budget Planner – Canada.ca (fcac-acfc.gc.ca) , using this tool bear in mind you will have to convert to Euros from Canadian dollars.
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