A new baby brings all sorts of new demands – not just on you but on your money, right at the time when your income has shrunk dramatically. And when you’re adjusting to this new little person in your life and the sleep-deprivation they cause, you don’t have the energy – or the extra hours in the day – to spend ages micro-managing your budget. Luckily, there are quick, easy and smart ways to keep your finances under control.
Here are 7 great tips for managing your money as a new parent
1. Get your finances (and your head) together
When you don’t even know the location of that cup of tea you made several hours ago, it might seem like a stretch to have a handle on your money matters. But even with a new baby in the equation, it doesn’t have to be that way. A personal financial management (PFM) platform like the Moneyhub app (recently shortlisted for Best Personal Finance App in the British Bank Awards 2022) means you can keep all your accounts and assets in the same place. Seeing real-time balances on your bank accounts, credit cards, mortgages and even pensions and investments all together securely in one place on your phone can really help you feel like you’re in control. Sure, it may be the only thing you’re in control of right now but we all have to start somewhere! You might even get to drink that cup of tea while you’re checking your balance.
2. Budget baby!
Unless you’re very lucky with your maternity pay, your finances are likely to have taken quite a hit. So now’s a great time to get serious about budgeting, especially if your spending has in the past tended towards, shall we say, the haphazard. Once you’ve worked out how much you have to spend on your expenses each month, the Moneyhub app can take care of the rest. Just set your monthly budget for things like food, hobbies and meals out (OK, a grab-it-quick lunch in a pram-friendly café) and the app will give you nudges to tell you where you are with each category so you can adjust your spending if you need to. It’s easy to analyse how your spending changes too, as the app is smart enough to categorise your transactions to make it easy to work out where you could cut back.
3. Don’t miss out on help you’re entitled to
From free prescriptions and dental care to extra benefits and tax credits, having a baby can open the door to financial support you may not be used to receiving. And if you’re not organised you can miss out: child benefit, for example, can only be backdated 3 months, so if you hold off applying until your baby is older than this then you’ll lose out. The government’s Money Helper site has a handy calendar: input your due date or baby’s date of birth and it’ll guide you through what you might be entitled to and when.
4. Stay on top of monthly payments
It’s the easiest thing in the world to let a payment slide when you’re a new parent – you’re kind of focused on keeping a tiny human alive after all. While online banking transformed the way we move money around, open finance is making it easier keep track of what we pay, when we pay it, and to whom. The Moneyhub app’s payments feature lets you move funds between your accounts or pay friends or businesses with ‘Faster Payments’ that take just 15 seconds. Having everything together in one place saves time – and the embarrassment of a missed payment. It’s safe too – you’ll get the same protections from your bank as you would by using their own app.
5. Build and maintain your credit score
If checking your credit score was so important you’d have done it before now, right? Well no, actually. Your credit score influences your chances of getting not just loans and credit cards at the best rates but also mobile phone contracts and the opportunity to pay for things in instalments. With a new baby on the scene, you might be making big one-off purchases on a lower income than you’re used to. Keeping your payment options open is a must, which is why building a good credit score is so important. The good news is firms like Experian let you check how you’re doing for free. Checking frequently won’t bring your score down but getting your name on the electoral roll (if you can) will bring it up. The Moneyhub app has a function that can help with your credit score too: it can share things like your rent payments with Experian to show you’re reliable and can warn you if you’re likely to miss any of your regular payment because of a shortage of funds.
6. Cut spending
Now no one is pretending this one is fun. But babies are expensive and pretty soon it becomes clear that saving wherever possible makes sense. The problem is that baby stuff is just so darned cute, so it’s about resisting the temptation to buy things you don’t really need. Party outfits for your little one could just as easily be pre-loved or donated: they’re possibly going to wear it just that one time after all. And expensive baby shoes are adorable but often redundant when your babe is in arms. If there’s something special you have in mind, why not try your local Freegle site? Users can request things they need or offer stuff they don’t, and if you can take some unwanted baby gear off someone’s hands you’re doing them a favour. Facebook is also full of local pages dedicated to rehoming our unwanted stuff, so take advantage. It’s the green thing to do too.
7. Connect your property with Zoopla
With a new family member on the scene, you might start thinking about upsizing your home. Valuation service Zoopla can keep you up to speed with local house prices and a nifty connection with the Moneyhub app means users receive an automatic valuation as well as details of how the value has changed over time. Linking your mortgage to your property in Moneyhub also ensures you’ll be alerted to changes in the loan to value (LTV) ratio that might open up better mortgage rates for you.
You can download the Moneyhub app for Apple, Android and desktop for free at the App Store or Google Play.
About the author
Sarah Reid is a journalist and mum, which means she spends a lot of time asking and answering questions. She has 2 daughters, aged 12 and nine, and covers money matters for Quids in! magazine.