Finance Advice

[ForABabyPanda]

POTENTIALLY TRIGGERING - TL;DR I’m trying to plan for an uncertain future

Hi - as I’m sure you all are, I’m stuck in this limbo of not knowing when or what to plan for. On the one hand you can’t plan your life around something that’s got no guarantees of happening, but it would be stupid to not plan at all for something you are taking proactive steps to try to make happen.

Before I start I realise that I am privileged to even be in the position to need to ask this question in the context that I am. So if there’s anyone who is struggling financially right now, this is also a way in which this post could be triggering and I don’t want to upset anyone.

All of a sudden because interest rates have ballooned I need to put some money in an ISA to avoid savings interest tax, and I’m reluctant to take an interest rate cut compared to a normal account to do so, so I’m looking at 1 year fixes.

Because I can’t open 2 ISAs in a year I need to put as much as is sensible into that one year fix, but I don’t want to be stupid either given that I HOPE (you have to have some hope) that I will be successful and will have a little one in less than a year. I’m also aware that this is quite likely not to happen as well, and that’s why I would kick myself if I didn’t maximise interest on a whim of a hope of something that doesn’t happen.

Do any of you have any guidance on how much I need to keep easily accessible for pre-birth and newborn costs? This is to cover first 3 months as after a year I will have access to the money again and also if I’m on maternity I will have a reduced income which will impact on tax free savings.

At the moment funding IVF cycles is not something I need to think about YET because I have my NHS goes and also a go through work. I’m only beginning my first NHS one.

While I realise I’m privileged to even have to ask this, I’m only slightly over threshold and hopefully you can tell by the fact I need to keep some money available and that I can’t really take the hit of 90/180 days interest lightly, that I do not have unlimited resources! Those with unlimited resources could gamble on the stock market, or could take the tax hit from having too many savings (though they’re probably paying a financial advisor to make sure that doesn’t happen 😂)

[Boo718]

it’s as expensive or as cheap as you want to make it. I’ve got friends who have second hand buggy’s cots clothes toys and there’s nothing wrong with any of it. Other friends have £1000 buggy’s and outfits that are £50 each. There isn’t really a price you can put on it.

[ForABabyPanda in reply to Boo718]

thanks for responding even if you weren’t able to put a price on it. I am the last of my friends to start their family and so there’s a possibility of hand me downs, but also their kids are probably old enough now they they’ve been passed down to someone else! There are certain things I’d want to have new like a pram system because I’d want to at least start things off with no crap on the wheels! But clothes and things that can be washed or wiped I’m perfectly happy second hand. Childcare costs will be a hit on any earned income, but between us I think we’ll manage then, a lot of my money now is spent on saving or on things that aren’t necessary like takeaways. I think the person I was talking to about my finances who told me not to lock any money away could have been over-exaggerating or preparing for every eventuality - they had to do a lot of work to their house around the same time, they changed their car, and maybe didn’t have a lot of solvent money because it was tied up in property. There is SOME work I’d like to do to my house, but it’s not urgent as baby could sleep in our room for first few months - the work would be to replace double glazin and fix plaster in what would be the nursery. And worst case scenario I could still access my money, I’d just incur an interest penalty if I did. I’d be able to save between now and the next 9 months at the same rate I am now, though probably directing some of that money into a specific baby fund, and the money I want to lock away is really money I never plan on touching - it’s not savings for a baby. Retirement maybe? Once I know I won’t need it for much longer? i don’t even know why I’m keeping it but I have this notion that all my friends have these big savings accounts handed by parents, or have a second property they rent out that was a granny’s or something and I don’t have that so I’ve been building up my own reserves in order to feel … secure?

[Kitkat10]

hi, I agree with the OP that it’s smarter to buy pre-loved as there is so much available which hugely reduces costs. I didn’t do that, I was naive and bought everything new.

So newborn expenses - buggy, cot, car seat, clothes, sling, feeding ( I combination fed as low milk production), toys, bouncy chairs and just stuff - total around £2000.

Can def do it cheaper as most baby stuff second hand is honestly hardly used and in good condition. Good luck x

[ForABabyPanda in reply to Kitkat10]

thank you, this is really helpful! Definitely up for buying some things pre-loved for definite, but I do want to buy a new pram I think even if that seems extravagant. Fully aware I may not have the need, and want to be sensitive to that. But just so happens I have to make some financial decisions now. Definitely had kept at least 2k accessible so that’s good to know.

[ForABabyPanda in reply to ForABabyPanda]

obviously I can Google the price of buggies but it was all the things I wouldn’t think about … just wanted to try to get q ballpark

[Purpledoggy]

This question is probably better aimed at the NCT forum, simply as more members have experience of this.

I budgeted about £3,000 for all the expensive bits n bobs, which was about right but we bought lots of things new. I had not even thought about this until I was pregnant, though, as I figured we’d budget what we could afford, if that makes sense. Xx

[ForABabyPanda in reply to Purpledoggy]

yes fair point, I’m not a member of that board as it seemed presumptuous but yes t they wil have more experience. Thanks for the ballpark figure, that’s really helpful - especially to know what it would be brand new and then That’s your max you need to keep available.

[Twiglet2]

I would say about £2500 but you can absolutely do it on £1000 if you buy preloved for sure!

I would also suggest fix it in and best (worst) case scenario you break the fix a few months early as you are pregnant and lose some interest/pay the penalty though.

The world of finance is mental just now 🤪 well done for being so proactive about it all 🤗 xx

[Twiglet2 in reply to Twiglet2]

ps I know we are talking hypothetically here but if you came to be in that scenario of pregnant and money fixed in rather than breaking the fix you could also buy the furniture and buggy/car seat etc on interest free credit and then pay it off once the fix is over (those are the chunkiest items to pay for) either a credit card or a lot of the actual places you can purchase them from do their own interest free options for 6-9 months xx

[ForABabyPanda in reply to Twiglet2]

thanks for the sound advice and ballpark figures!! Yes you’re so right and if i am fortunate enough to be in that position and I really need the money then I can just take the penalty. Still better than the money languishing in no interest accounts or ending up paying tax on savings. It’s hectic, and it’s all happened really suddenly as I was sauntering along there with 1% interest accounts for years and you’d need 50-100k in savings before you’d need to pay any savings interest on 1%! So it was only suddenly something that became a thing when interest rates got so good (for savers)

[Sweethear]

hi before getting pregnant I use to say I will buy everything new and do this do that but when I got pregnant I changed my mind i bought a lot from internet outlet shop which is a lot cheaper then the original price and I got almost all my baby stuff from my sister which her baby was almost 6 years older than mine baby the buggy I used was used by 4 babies before my baby and it was all still looking good the only thing I bought was a badroom in an outlet shop even up till now I still buy my baby things when there is sales or in an out let shop and save the rest of the money for her future. So it all depends on you how cheap or expensive you want to make it. I say with about 1500€ you can have everything you want for a baby and it will look wow just check the internet well

[ForABabyPanda in reply to Sweethear]

thank you - yes good to know the max ballpark but also that it’s totally doable for less. I know I can Google prices of individual items but there’s always things you don’t think about so good to hear the range of figures. I think I’m good with my decisions and have kept at least that available so I should be in an okay position. I had someone really scare me and tell me not to lock any money away but I think that person had to do a lot of work to their house etc at the same time as baby was born, changed their car etc.