How to prepare your finances ahead of having a baby

Yorkshire Building Society has compiled a list of tips for new parents detailing some key steps and considerations to help them prepare their mortgage, insurance and savings for the new arrival, along with some ways parents can make their money go further when raising their child.

Pregnant lady holding a tablet computer

Expecting a baby is an exciting time for parents, but it is crucial that they ensure that they are fully prepared for what the future holds, to avoid any potential issues further down the line.


  • Re-evaluate whether you have enough savings in place to cover repayments.

    Mortgage repayments are typically the main expense for most households. Children are also costly, so it’s worth ensuring you have a safety net to fall back on if you’re caught short of cash.
  • Overpay in advance to take a mortgage holiday.

    Your mortgage lender may consent to a mortgage holiday – where repayments are temporarily suspended for a few months but interest continues to be charged – which can ease the level of monthly outgoings while on maternity or paternity leave. Some lenders, including the Yorkshire, will only consider it where overpayments have been made, so it requires careful planning. The key thing to understand is that your mortgage provider must approve the mortgage holiday in advance.


  • Get saving in advance.

    If you’ve never got into the habit before, having another mouth to feed is a brilliant incentive to put money away. Not only will it help to buy essentials, but you could also plan to cover lost earnings during maternity and paternity leave.
  • Consider opening a children’s savings account.

    Children’s savings accounts typically offer more favourable interest rates compared to other accounts, and offer a convenient way for parents to save for their child’s future. The earlier you start saving, the further your child’s money will go. It is important to be aware that any money invested in your child’s name is theirs – and not yours! Any withdrawals may be queried whether it is for the benefit of your child.
  • Keep it in the family.

    Savvy grandparents may also want to open a savings account for their grandchildren, such as a Junior ISA. This will maximise your child’s tax-free savings potential.
  • Use birthdays and Christmas as a reason to save.

    Your child may receive money to celebrate their birthday or Christmas which may be good to squirrel away, especially when they are little and are too young to understand what is going on.
  • Involve your child in managing the account as they grow up.

    Children learn financial habits from a young age. As well as setting up a savings account for them it’s also a good idea to speak with them about money and involve them, to an extent, in how you’re managing their account to prepare them for the future.


  • Consider taking out a life insurance policy if you haven’t already.

    Consider taking out a life insurance policy if you haven’t already.
  • Add your child onto your existing policy.

    If you already have a life or health insurance policy, you should consider adding your child to the policy. Providers typically allow you to do this until around 30 days after your child has been born, so don’t miss out.
  • Check if your car or home insurance policies need updating.

    Car insurers generally charge more for those with small children as they can be a distraction, but it’s important your policy reflects your new circumstances so that you can be sure that your provider will pay out if you are to make a claim in the future.

Make your money go further

  • Not every piece of equipment has to be bought brand new – but remember to keep the instructions for bigger, more technical pieces to help sell them in the future (or keep them if you’re planning more children).
  • When regular purchases, like favourite nappies, are on offer make sure you bulk buy if you’ve got the storage space.
  • Childcare vouchers are a tax-efficient way of paying for childcare and are usually done through ‘salary sacrifice’. The Government is changing the system in 2017, though, so check to see how you’ll be impacted.
  • Sign up for newsletters from parenting forums and websites – they often contain lots of money off vouchers for essentials.
  • Sign up for child benefit – it isn’t automatic.

Tanya Jackson, Head of Corporate Affairs at Yorkshire Building Society, said:

Pregnancy can be a hugely exciting yet busy time for expectant parents. It’s easy for new parents to overlook things at such a busy time, but it’s crucial that they take all the necessary steps to prepare themselves financially for what the future may hold.


The most important thing parents can do is plan finances carefully and factor in all of the costs they expect, including the effects of a likely reduction in income during maternity or paternity leave. Doing that preparation properly can take away any worries or stress and let you focus on the most important things – being a proud new parent.


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