Bounty feature

Doing your sums

Cost may not be your first thought when planning a family. But bringing up a baby can amount to a hefty sum – you’ll shell out up to £6,000 in the first year, and a whopping £50,000 by the time they’re five. And that doesn’t include childcare. So do your sums before the new arrival eats too big a hole in your family finances.

• If you’re trying for a baby or are newly pregnant, save some money each month until you start maternity leave, to pay off credit, or help boost your maternity pay
• Even if you’ve never drawn up a household budget, it’s not too late to start. Tot up your income and all your outgoings. Keep all your receipts for a month to give you an idea of where your money’s going, and where you might be able to cut back
• If you’re returning to work, look into the cost of childcare in your area so you can plan how much of your income will need to be set aside
• Claim any tax credits or benefits you’re entitled to. Check out www.entitledto.co.uk
• Switch your mortgage to one with a lower rate – but first make sure any fees and penalties make it worth your while

Cutbacks

You could spend a fortune on your baby – but you don’t have to. Here are a few ways to keep the cash flow low...

• To help you budget, keep the receipts of everything essential you buy for the baby each month and add the amount to your list of regular outgoings
• Think needs, wants and luxuries. Concentrate on the former and let friends and relatives buy the latter
• Choose cheaper own-label nappies and skin-care. They do the job as well as the big brand names
• For thrifty prices and great quality, try Primark, Matalan, Argos and the supermarkets, or one of the online baby equipment stores such as www.kiddicare.com
• For nearly new sales of toys, clothes and baby equipment in your area, check out the National Childbirth Trust

Great saves

When your baby’s still in nappies it’s hard to imagine they’ll be working, going to university or buying their own home. So start saving for them now, and they won’t have to ask you for as much by the time they’re 18. The Government has just given you a head start with the Child Trust Fund (CTF), a long-term, tax-free savings account. All children born on or after 1 September 2002 are entitled to a voucher for £250 (more if you’re on a low income). You’ll be sent the voucher once you register for Child Benefit. You can choose to invest the voucher for your child in a choice of

• Savings accounts
• Accounts that invest in shares
• Stakeholder accounts

You can invest up to £1,200 a year in the account, but whichever type you go for, the money can't be touched till your child turns 18. Go to our Bounty money pages to find out more.

Aside from CTF accounts, there are dozens of child savings accounts and baby bonds to choose from. To help you decide, look for an independent financial adviser (IFA). Go to www.unbiased.co.uk for details of IFAs near you.

And while you’re thinking long-term, you might want to take out or top up your life insurance and update your will to make sure your new family is provided for.

Try www.adviceonline.co.uk for unbiased insurance quotes. Ask a solicitor for advice on making or amending a will. Visit www.lawsociety.org.uk to find a solicitor near you.