Ways to prepare financially when starting a family

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What we'll cover

  • Revisiting your budget
  • Saving for your children’s future
  • Maintaining your emergency fund
  • Protecting your family’s income
  • Your future financial wellbeing

Tips for enhancing your family’s financial future 

Starting a family can be an exciting time – there’s so much to think about. But before you get caught up in decorating the nursery, buying the latest must-have buggy, or scouring the local schools, you might want to stop and think about your financial future.

On average in 2020, according to the Child Poverty Action Group, the cost of raising a child in the UK from birth to 18 was:


for a couple



for a single parent

Those numbers aren’t small, which is why it may be sensible to rethink your financial plan before starting a family.

Revisit your budget

Maintaining a monthly budget could help you keep your finances on track. It will show you how much money you have coming in, and how much is going out where. Starting a family can impact both of those elements, which it’s why it could be a good idea to go back to square one.

If your income is likely to change after you have a baby (for example, if you scale back or stop working) then it may be a good idea to consider cutting some costs. It can be helpful to sort your expenses into essential and non-essential items so you can find ways to save.

Babies can be expensive, but they don’t have to cost the earth. Don’t let yourself get carried away. Set yourself a realistic baby budget that you can stick to. And don’t forget to review it regularly as your baby grows.

Babies are for life

OK, they don’t stay babies for life, but their financial impact on your budget will likely be felt for many years.

As your child (or children) grow, their needs will change. Before you know it, they’ll be thinking about starting their academic careers. Although that university degree may still seem a long way off, you might want to start thinking now about the financial impact it could have.

Setting up a savings account is one way you could financially help your children through their university education. If you start as soon as they’re born, you can make it a long-term savings goal and may want to consider a fixed-term savings account, or a tax-efficient savings plan such as an ISA.

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Saving for your children’s future is an essential part of financial planning. As we’ve mentioned, there are several options available to you, and your choice will depend on your goals and circumstances.

Don’t forget your emergency fund

An emergency fund is a pool of money stashed away that can be used during times of financial need. That means unexpected expenses (such as major home or car repairs, illness, loss of job etc.) that can cause real financial hardship .

Ideally, your emergency fund should cover at least three to six months’ worth of expenses. But as we discussed above, those living expenses are likely to rise when starting a family, so it’s a good idea to review your emergency fund regularly to make sure you’re sufficiently covered.

And don’t forget your future financial wellbeing

With all this budgeting and planning for your children’s future, it’s easy to forget your needs. At some point, you will want to retire, so now’s not the time to let your pension or savings contributions slide.

When you revisit your budget (as we discussed earlier), prioritising your pension and retirement savings could help you prepare better for the future.

The importance of being flexible

Without a crystal ball, it’s impossible to know what will happen in the future. That’s why building a degree of flexibility into your finances could help you navigate this exciting time.

Plans change. Initially, you may have planned to go back to work after a year but may find that it’s not right for you when the time comes. Willing to be flexible will help you do what feels right for you.

If this all seems overwhelming, don’t forget, you don’t have to go it alone. Working with a professional financial advisor may help you stay on top of your finances and help you prepare for whatever life throws your way.

The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.

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