14 money tips if you're having a baby

If you're an expectant parent, here's a roundup of what you should be claiming, arranging and doing to organise your finances for your new arrival.

So, you're about to have a baby, and you're worried about how you will cope financially. Fear not! Check out these tips to find out what you should be claiming, organising and doing in order to prepare for your new arrival.

Budget

The best way to prepare your finances for parenthood is to create a budget. You'll need to work out your income (earnings, state benefits etc.), deduct your expenses (bills, rent or mortgage etc.) and see how much is left to live on. This budget planner for parents-to-be might help.

Benefits and Grants

1. Health in Pregnancy grant

All mothers-to-be are now entitled to the new Health in Pregnancy grant. The grant of £190 can be claimed when you are 25 weeks' pregnant.

2. Free Prescriptions and Dental care

All expectant mothers are entitled to free prescriptions and NHS dental care whilst pregnant, and for a year afterwards.

3. Child Benefit

Once you've registered your baby, you can apply for Child Benefit. This is £20 per week for your first child and £13.20 for each subsequent child. If you're a non-working mum, make sure Child Benefit is paid to you (not your partner) as this allows you to build up credits towards your basic state pension.

4. Benefits

If you're currently on a low income or claiming benefits, there are a number of ways you may be able to get extra financial help (such as the Surestart maternity grant, worth £500).

5. Childcare benefits

Should you decide to go back to work, you may be entitled to childcare benefits. Parents can also take up to 13 weeks of unpaid parental leave before their child is five, and can ask their employer for a flexible working pattern.

Leave and Pay

6. Statutory maternity Leave

Women can currently take up to a year (52 weeks) of Statutory Maternity Leave when they have a baby.

7. Statutory maternity Pay

Statutory Maternity Pay (SMP) is paid for a maximum of 9 months (39 weeks) to those who qualify. It's worked out to be 90% of your earnings for the first 6 weeks, with the following 33 weeks currently paid at £123.06 per week, or 90% of your average, gross weekly earnings (whichever is lower).

So if you choose to take the whole year off you won't be paid anything in the last 3 months.

Bear in mind many employers offer a more generous maternity package than the statutory minimum.

Most new mums start claiming SMP when they start maternity leave, but the earliest you can start is 11 weeks before the week your baby is due.

The good news is, if you don't qualify for SMP, you may be able to claim Maternity Allowance, instead.

8. Redundancy

Reassuringly, if you have the right to receive SMP, you will get it even if you decide to leave your job (or are made redundant) before you start receiving SMP. And once you start receiving SMP, your employer must continue to pay it to you even if you leave your job or are made redundant.

What's more, you don't have to repay it if you decide not to go back to work or leave your job while getting SMP.

9. Statutory paternity Leave

New dads can take up to 2 weeks' paternity leave. Like SMP, this is paid at £123.06 per week. You may be able to take the time off as fully-paid holiday instead.

What else should I consider?

10. Pension

If you remember how compounding works, you will know how important it is to keep paying into your pension while you're young. So if you have joined your employer's pension scheme (and your employer contributes, too), keep it up while you're on maternity leave. Your employer should continue making the same contributions as if you were on full pay.

11. Create a nest egg

Try to save a little each month. You can stash it in a high paying savings account, a cash ISA or even drip feed it into an index tracker - but at least you'll be building up a tidy nest egg for your family, should you need a cash cushion in the future.

12. Family protection

Another important area to remember when you have a baby is life insurance. While you may not have worried before, once you have a dependent you'll want to be sure he or she is provided for, should the worst happen.

And the good news is, life cover is pretty cheap - a £100k, 25-year policy for a 30-year-old man can be less than £6 per month.

13. Family Income Benefit

Alternatively, Family Income Benefit pays a monthly income to your loved ones, should you die (and can work out cheaper). And don't forget that both parents should take out cover, even if one doesn't work. You may also want to consider Permanent Health Insurance.

14. Child Trust Fund

All new babies are sent a £250 voucher (£500 for lower income families) to be deposited into their Child Trust Fund. Choose the one that's right for your child and try and pay into it regularly (most funds allow minimum payments of just £10 per month). By the time they're 18, it could be a significant sum.

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