Money planning and an emergency fund

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Having a child is one of the most special times of your life, but there’s no denying that with it will come a number of changes. Your routine will be almost entirely dictated by your new arrival, and the way you manage your finances will also see some big changes.

Hidden costs

Some of the ways in which your finances will change should be fairly obvious: you’ll be spending a lot of money on food, clothes and nappies for your new arrival, amongst other things. However, there may be other things you haven’t thought of yet, and you should try to ensure you have the funds to cover anything unexpected.


Most parents need a break from time to time, whether it’s for an emergency or just for a bit of time off. But not all of us have friends or family who can help – in which case you may have to consider hiring a childminder.

 Hiring someone reputable can be quite expensive, though, so if you do go down this route you’ll need to make sure you make room for it in your budget.

Medical expenses

Children under 16 years of age are currently exempt from NHS prescription fees, but if you need any prescriptions for children over that age then you may have to pay.

The current prescription charge is £7.20 (February 2010), which on its own shouldn’t break the bank – but repeat prescriptions could really start to add up.

Replacements and repairs

It’s inevitable that some of your child’s clothes and toys will need replacing over time, especially as they get older.

Tips for managing your finances

Keep an emergency fund

A lot of the things we’ve talked about here are pretty unpredictable in terms of when you’ll need the money, so perhaps the best way to prepare is to keep an emergency fund. Putting even a small amount of money aside each month could make all the difference in the future.

Ideally, you’ll want to leave this money in an instant-access savings account with the best interest rate you can find. You can dip into this fund should you run into any unforeseen financial difficulty. 

Stick to your budget

A budget helps to ensure that you always cover your essential costs and that you only spend what you can afford on other things. Creating your own budget is simple – list all your regular outgoings and subtract the total from your income. You can include any ’emergency funds’ or other savings in your list of outgoings if you want to make sure you’re contributing to this regularly.

Post by Melanie Taylor, a personal finance expert with over 15 years experience.


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