Being Dad Finance

The baby budget: working out your finances

baby budget
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Written by Tim Barnes-Clay

A new baby comes with a variety of new concerns, not least of which is the sizeable financial stress.

According to a recent study conducted by the Centre of Economic and Business Research on behalf of insurer Liverpool Victoria, the average cost of raising a child in the UK has risen to a staggering £230,000 – more than the price of some houses!

The looming costs of a newborn can be daunting, particularly if your household income is reduced by 50% somewhere along the line. Perhaps your partner doesn’t intend on going straight back to work after maternity leave, leaving the responsibility of ‘provider’ to fall squarely on your shoulders – enough to weaken the knees of any new dad.  

Even without this pressure, the rising cost of childcare along with the multitude of pay-outs to be made on behalf of your little one can quickly seem astronomical. However, managing your money doesn’t have to be a muddle of sleepless nights and endless bank statements.

The secret to financial confidence is solid budgeting. You’ll find that, as long as everything is recorded and small cuts are made wherever possible, you can keep both your family comfortable and your bank account healthy.

Think about the “big picture”

The best way to get to grips with your finances is to visualise your income and spending so that you can see exactly how they affect one another.

Don’t rely on keeping track of things in your head. This is unlikely to be accurate and you’ll be unpleasantly surprised when you do finally check in on your balance. Instead, put together a simple spreadsheet that tracks income, outgoings and potential expenditure. This will reduce the risk of being ambushed by surprise costs further down the line.

Bear in mind this doesn’t need to be anything too sophisticated (you won’t need any complex formulae and pivot tables!) just a basic record with running totals for reference.


Take care of your major expenses first: your mortgage or rent, utility bills, any loan or credit card repayments and, for some, the cost of running your car. Once you have factored these in, you can concentrate on the remaining funds without having to sweat about the big stuff.

The next step is to analyse your spending. Identify any items that are frivolous and cut them out completely. Sacrifices will have to be made but remember it’s all for a very good cause – your new arrival!

Get a plan together

There’s no better time for expectant dads to start preparing than right away. While it might not seem like time is on your side with the due-date fast approaching, this is the perfect opportunity to get your affairs in order.

Get your head down and make a list of all the things you’re going to need in time for your baby’s arrival, from cots and strollers right down to nappies and blankets – and everything in between!

With a clear idea of your total costs, you can stagger your expenditure over a matter of months instead of having to shell it all out at once.

However great you are at planning, there will always be some surprises along the way, so save smart and make sure you put something aside for those particularly rainy days.

Snowball your savings

Ever heard the phrase “look after the pennies and the pounds look after themselves?” Well it’s true!

Making small savings wherever possible is a great way to avoid making unnecessary withdrawals – leaving the nest egg untouched.

It can be something as simple as packing a lunch for work. Let’s say the average lunch out is £5, that’s £25 per week. Now consider that a loaf of bread, a block of cheese and a bunch of bananas costs just over the price of one lunch out, you could be making a saving of roughly 400%!

Apply this logic to every aspect of your spending and you’ll see the results before you know it…

Seek advice

There’s no shame in seeking professional financial advice. Depending on your circumstances, it might even be irresponsible to avoid doing so. A trusted financial counsellor can help you manage your accounts and if necessary, help you to pick out the best loan to suit your situation.

With the right support and a sensible plan, you should be able to provide for all your new family’s needs and nothing is more important!