How working with a financial planner can help you if you’ve recently become a parent December 07, 2021 by Michelle Boakes Category: News Starting a family can be one of the most important and rewarding milestones in your life. If you’ve recently had a child, there can be no better time to sort out your finances to prepare for this exciting new chapter of your life. Of course, there can often be a lot of things to think about so if you want to be able to make properly informed decisions, working with a financial planner can help. Getting your finances under control and growing your wealth effectively can be important if you want to give your child the best possible start in life. Here is how working with a financial planner can help you to achieve that. A planner can help you to manage your household finances effectively While having a child is wonderful, it’s important to consider the impact that they will have on your financial situation so you can plan accordingly. According to figures from the Times, the average cost of caring for a baby for the first 12 months of its life is £6,000, which works out at £500 a month. As you might imagine, this could be a substantial increase in your living costs. If you want to ensure that you can absorb this extra cost, you may want to create a household budget. This can help you to ensure that you have enough to cover your expenses, while also building your wealth for the future. Working with a financial planner can help you to find the most effective way to budget your monthly incomings and outgoings, giving you one less thing to worry about. They can help you to make an informed decision when protecting your loved ones Starting a family is one of the most common reasons for people to ensure they have the right protection in place – and it isn’t hard to see why. Protecting yourself and your loved ones against the unexpected can be an important way to safeguard your wellbeing and give you invaluable peace of mind. For example, if a worst-case scenario should ever happen and your partner passes away, you may not have enough income to pay for your monthly outgoings, such as bills or mortgage repayments. This is where Family Income Benefit, which is a type of life insurance, could help. This would pay you a monthly income so that you could continue to pay your bills and support yourself and your child. There are many different types of protection to choose from so if you want to find the one that’s right for you, working with a financial planner can help you. A planner can help you to build a nest egg for your child’s future If you want your child to have the best start in life, you may want to open a Junior Individual Savings Account (JISA) on their behalf. This can be a useful way to build up a nest egg that they can access when they turn 18. In the 2021/22 tax year (6 April to 5 April), you can contribute up to £9,000 into an ISA on your child’s behalf. However, it’s important to note that this amount doesn’t roll over, which is why you may want to make the most of this allowance. There are two main types of JISA. The first of these is a Cash Junior ISA. As the name implies, with this account your contributions are held in cash but one of its main benefits is that you don’t have to pay any Income Tax on the interest that it accumulates. The second type is the Stocks and Shares Junior ISA, in which you can invest your contributions on behalf of your child. This account is also tax-efficient, as you do not have to pay Capital Gains Tax on the returns. While the latter option typically sees a higher rate of return over the long term, it also exposes your contributions to risk. As a result, the value of your investment could go down as well as up. Working with a financial planner can help you to properly assess your options and make an informed decision about which type of account would be right for growing your child’s wealth. This can give you greater confidence that they’ll have a useful nest egg when they grow up. Get in touch If you want to know more about how working with a planner can help to give you greater confidence and financial stability, we can help. Email us at email@example.com or call 0330 320 5048. Please note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.