A New Chapter Begins and So Does A New Type of Planning...

From Hospital Bills to Higher Education It Adds Up Fast

If it’s your first baby, the list of necessary items can seem overwhelming, with expenses such as:

• Big-ticket items: Cot, pram, car seat, and changing table.

• Everyday necessities: Baby feeding essentials (bottles, sterilizers, breast pumps), nappies, clothing, and bedding.

To budget wisely, consider making a checklist of what you truly need. This can help you avoid unnecessary purchases and focus on essentials. Many friends and family members may want to give a gift, so don’t hesitate to ask for specific items or request vouchers for baby stores. This can significantly reduce your personal expenses while ensuring you receive useful items.

If you’re planning to return to work, one of the biggest expenses you may encounter is childcare, whether through a creche, childminder, or nanny. The costs can be high, but there are government support schemes available to help reduce the financial burden:

• National Childcare Scheme (NCS) – This provides subsidies for childcare costs, with the amount based on household income and childcare hours required.

• Early Childhood Care and Education (ECCE) Scheme – Offers two years of free preschool education for children aged 2 years and 8 months and older.

It’s a good idea to explore your options early, as waiting lists for creches and childminders can be long. Planning ahead can help secure a place and ensure you get the best financial support available

Child Benefit

Child Benefit is a universal payment regardless of income levels. The payment is currently €140 per month. The purpose of the payment is to assist with the cost of raising children. In December 2024, the Newborn Baby Grant was introduced for Children born on or after December 1st 2024 and provided a once off payment of €280 paid along with the €140 Child Benefit payment totaling €420 for the first month.

One of the future uses for Child Benefit savings can be for future education expenses. If you are in a position where you can comfortably afford to put away the monthly children’s allowance, it will allow you to plan towards larger future expenses such as third level education.

Saving €140 per month from birth to age 18 will create a potential pot of €30,240. If you decided to invest this money on a monthly basis in a medium to high diversified investment portfolio your pot would be considerably larger with a potential pot of €44,497.

Protecting your Family

Income Protection

As a parent, your family's financial stability relies heavily on your ability to work and earn an income. But life is unpredictable, and accidents or illnesses can happen at any time. Income protection ensures that if you’re unable to work due to illness or injury, you’ll still have a safety net to cover essential living costs. Protecting your income ensures:

1. Peace of mind- Having income protection means you don’t have to worry about meeting financial commitments while you are out of work (sick or injured). It’s a protection for your regular income that enables you to maintain your lifestyle so that you can focus on recovery,

2. Family Security- as a parent, you have many responsibilities and commitments. If your income was to stop even temporarily, that would likely put your household under financial pressure. Having income protection replaces a portion of your income (max 75%) allowing you and your family's lifestyle to continue.

3. Coverage- Income protection doesn’t just cover sickness. It can also apply if you're involved in an accident or have to take time off for mental health issues (such as anxiety or depression). These types of coverage help you protect your most important asset — your ability to work and provide for your family.

4. Affordablity- Income protection is often more affordable than you might think, especially when you're young and healthy. The earlier you take out a policy, the lower your premiums tend to be. The monthly premium is eligible for tax relief so you may qualify for up to 40% of the premium refunded depending on your marginal tax rate.

Life Insurance

As a parent, your life is intertwined with your family’s financial stability. Life insurance is not just for the breadwinner; it’s a crucial safeguard for the entire family, including stay-at-home parents. Having life insurance ensures:

1. Protection of Family’s Future- Life insurance provides a lump sum payment to your beneficiaries, which can cover living expenses, outstanding debts, mortgages, education costs, and daily needs. This means that your family doesn’t have to struggle financially during a difficult time.

2. Replacement of Lost Income- Even if you're a stay-at-home parent, your role is extremely valuable. If something were to happen to you, your partner would need to replace your contribution in terms of childcare, home management, and support. This comes at an additional expenses with the average cost to replace a stay at home parent is €57,140 according to Royal London.

3. Protection against Debt and Mortgage - If you have any debts or a mortgage, life insurance can ensure that your family isn’t burdened with these financial obligations if you pass away. For example, a life insurance payout can cover the mortgage, allowing your family to stay in their home without the risk of foreclosure.

4. Protection for Your Children’s Future- Parents often save for their children’s education, but if you’re no longer there to contribute, that plan can be derailed. Life insurance can provide for your children’s future education costs, ensuring they still have the same opportunities for learning and growth, even without your financial support.

Health Insurance

When considering health insurance for your child, many providers in Ireland offer family- friendly discounts and deals, which can significantly reduce costs. Some of the available offers include:

• Pay for 1 child, and the rest go free – This can be beneficial for families with multiple children, as you only pay for one child’s cover while additional children are insured at no extra cost.

• 25% off cover for children on certain plans – Some insurers offer discounted rates on child health insurance, making it more affordable to provide comprehensive coverage.

• Low-cost child add-ons – Certain providers allow you to add your child to your existing plan for as little as €15.55 per month, ensuring they are covered for essential medical needs without a significant financial burden.

It's always advisable to compare different insurance providers and plans to find the best option that suits your family's needs and budget.

Education Planning – Start Small and Think Long Term

The cost of sending a child to primary school in Ireland varies based on factors such as location, school policies, and individual circumstances. However, recent studies provide some general estimates. The Irish League of Credit Unions (ILCU) 2024 Survey found that the cost of sending a primary school child to school is approximately €1,086 per child per year.

For secondary school, the cost increased to an average of €3,088 per child per year for public secondary schools. Again looking towards third level education, while the ‘Free Fees Initiative’ for students means there is a cap of €3,000 (reduced to €2,000 for 2024 and 2025) on fees with the balance paid by the government, there are still larger expenses associated with college.

Higher cost on books, transport, accommodation, food etc. with the average cost per year per child today being €6,033 if they were to reside at home compared to upwards of €16,100 if they were to reside in rented accommodation.

Budgeting For a Baby

A survey done by Mummy pages stated that it costs an additional €4,000 for the household in the first year of baby’s life. This considers the cost of prams, cribs all the way down to diapers and baby wipes. Budgeting for a baby requires careful planning and prioritization. It’s important to sit down and create a plan so that you feel in control of your expenses, you are aware of the supports you are entitled to, and can budget accordingly.

Tips to prepare Pre and Post Baby:

Before Baby Arrives

1. Assess Your Finances – Review your income, savings, and expenses to understand what adjustments may be needed.

2. Create a Baby Budget – List essential costs like hospital bills, baby gear, diapers, and childcare to estimate monthly expenses.

3. Take Advantage of Government Benefits – Check if you qualify for Child Benefit (€140/month per child) and the Newborn Baby Grant (€280 for babies born after Dec 1, 2024) in Ireland.

4. Save in Advance – Start a dedicated baby fund to cover initial costs and unexpected expenses.

5. Review Health Insurance – Ensure your plan covers maternity care and consider adding your baby to your policy.

6. Buy Second hand – Consider gently used baby clothes, furniture, and gear from trusted sources to save money.

7. Plan for Maternity/Paternity Leave – Understand your employer’s leave policies and government entitlements to prepare for any income changes.

After Baby Arrives

1. Stick to a Budget – Track baby-related expenses to avoid overspending on non-essentials.

2. Use Cloth Diapers or Buy in Bulk – Cloth diapers save money in the long run, and buying disposables in bulk reduces costs.

3. Join Parent Groups – Many local and online communities offer free or discounted baby items.

4. Cook at Home – Preparing homemade baby food is often cheaper and healthier than store-bought options.

5. Consider Childcare Costs Early – Research childcare options, childminders, or potential family members who can help, to find the most cost-effective solution.

6. Automate Savings – Set up a small recurring transfer to a savings account for future child-related expenses like education.