New parent?

New Parent? Here’s 6 Quick Tips For Your Finances

First up… Congratulations! Life will never be the same again.

Loads changes when you have children. Life takes on a whole new meaning, and it can be a little bit overwhelming. But you don’t need to be overwhelmed by your finances too.

We’re a small business and both directors have young kids. Richard’s son is nearly 4 and Joe’s daughter is 2. And of course, we’re Financial Advisers by profession, so we must have been fully prepared…

Does that mean we were ready? Not by a long shot!

This quick guide will help you sort out the priorities in your finances, so you can focus on the other stuff. Like learning how to change nappies without being sick.

Priority 1: Make sure you sort out your Life Cover…

No prizes for guessing this would be in the list. It’s dead easy (no pun…) to forget, but get this sorted first up. The chances of you dying are pretty remote but the financial damage it would cause is immense. The good news is Life Cover is dirt cheap.

You’ll probably both need cover if you’re parenting with a partner, and you might have some sort of cover set up already. Two popular ones: either an old policy you got when you sorted out a mortgage, or it’s quite common to have some Life Cover through your work benefits, sometimes known as Death in Service.

Job number 1… just have a quick look at the numbers and make sure:

  • You’ve covered your debts (usually mortgages/car loans/credit cards) so if the worst happens to you, your family still have a roof over their heads and won’t get visits from bailiffs
  • You’ve built in a contingency sum – an extra lump sum to leave to your family which covers your future financial contribution to the family, even though you might not be here anymore.

How much cover you get it absolutely up to you, whatever makes you feel comfortable.

We went bananas on our cover – I covered my mortgage if either of us died, and then went for a lump sum of 10x my income. If I’m not around anymore I know my wife and daughter are going to be perfectly okay financially. In fact I don’t think they’d miss me.

Priority 2: …And your Will

Nuff said? Well, no. 54% of adults don’t have one. And 5.4million of us don’t know how to get one.

Just make sure the right things happen in the right order. You can think about building assets and paying off mortgages all you want. But if the right things don’t happen to the right people in the right order… you leave a right old mess.

You can do a perfectly functional will online. You can buy will-writing kits from Amazon or WHSmiths (or any other retailer). You can use a Will Writer, or a Solicitor.

Just sort one out… it takes between one and twenty minutes.

Priority 3: Check the Benefits Forms on your Pension/workplace Life Cover

Most people are now auto-enrolled into a pension scheme. Just check what instructions you’ve given on the Death Benefits Form. If you die, your pension can usually go to whoever you nominate. Make sure it’s written to who you actually want to have it.

Same with the Death in Service. No point it paying to your mum/dad/sister/brother/best mate when actually you now have responsibilities.

Anyway, enough about death.

Priority 4: Check what support you’re entitled to

This one’s really easy and I love it. Go to the amazing website,, fill in your details, and it will tell you what State Support you’re ahem… entitled to.

Fab website, I’ve used it loads for loads of things.

Priority 5: Child Benefit

Linked to the above… Claim it if you can. Though know this: if you earn over a certain amount (I won’t put the number in because they might change it…), you start becoming disqualified from Child Benefit, until at another threshold you don’t get any at all.

BUT there is a box you can tick on the form that says “I do not want to be paid Child Benefit, but I want to protect my State Pension.” The number of times I’ve seen people who didn’t tick the box…

This is massively important. If you have gaps in your National Insurance record, you can lose some of your state pension entitlement.

So tick the box, even if you don’t qualify for the payment.

Priority 6: Emergency Fund

When you were young, free and single, you could fly by the seat of your pants (whatever that means). Live like there was no tomorrow.

Well, now you’re a parent… there is a tomorrow, and it’s probably going to be filled with screaming children, broken sleep, and a huge amount of responsibility.

The point I’m making is that before this happened, you were answerable only to yourself. You now are answerable to more than just you.

So in the interests of taking that responsibility seriously… make sure you have built up – or are building up – a readily available cash buffer so that if anything goes wrong and you face an expense you weren’t ready for, or you lose your income through sickness or unemployment… you have a fund ready to tide you over until things are right in your world once more.

Think of it as your buffer against the harsh realities of a cruel world.

There is no perfect number for this emergency fund. As a guide some people say 3 months’ worth of expenditure. Others say 6 months. Others are happy if they have a credit facility to tide them over.

Just make sure you’ve thought about it, and what you have available gives you a warm fuzzy feeling.

That’s it – 6 quick tips. We reckon if you do these things first, you’re in good shape. Now go and enjoy it…