No one tells you about the boring, but important things you need to do as a parent. The things that are much easier to sort before you have a child, but you never get around to because they are too boring. Instead, you spend years working out what they are, then take another few years to sort them out. All with that nagging, feeling you should really get one of them sorted rather than sit on your arse on the sofa.
I wish I’d sorted them sooner, I wish I’d done them before becoming a dad, I wish someone would have told me to do it.
No one did for me, so I thought I would for you.
There are three buckets of things that every parent needs to get sorted, legal, insurance and finances. Before jumping in, it’s good to think about how to approach them. Go to independent sources first. Friends, family, government advice sites (in the UK the best are Citizens Advice Bureau and the Money Advice Service. Why there’s two, I have no idea.) and MoneySavingExpert.
Get a will, so if the worst happens you know your children’s future will be as secure as it can be. Before you do anything, have a chat with your partner and agree what you would want to happen to all your assets and your children if one, and both of you die. It’s not the kind of conversation you want to have, but it’s important.
Compounding interest is an incredible thing. If you invest £10 a month until your child is 18, you will have personally put away £2,160, but at 3% interest, you will have accumulated a pot of £2,852. Giving you an extra £692 in interest, which would have taken you over 5 and a half years to save up at £10 a week. There are three buckets to think about, saving for old age, saving for a rainy day, saving for your children.
Saving for old age.
Pensions. Make sure you and your partner have one, that it charges low fees (the more you pay the less you accumulate) and is invested ethically (do you really want to be voting with your money for things that make the world worse for your children and grandchildren?).
Do at least two different pension calculators to work out what you should be paying in every month to get the kind of lifestyle you want to have later in life. Get any old pensions you might have from other jobs into one place. Set up monthly payments. Put an annual calendar reminder in to do a quick check that you are still getting a good deal. Done.
Saving for rainy days.
You could go down a rabbit hole trying to work this out. MoneySavingExpert is the best source of information I’ve found on this.
You need to decide on your appetite for risk, what you can afford to pay in, then find the lowest fee charging provider. It’s worth checking out robo-advisors, which uses tech to automate much of what money managers do, thus reducing fees. This is a good comparison site. Set up regular payments and an annual reminder to review it and you’re done.
Saving for your children.
On this one, check out the government schemes that give you and your little one's tax advantages.
Choose a reputable provider. Get one set up and make sure regular payments are put into it. Make sure you’re getting all the tax benefits wherever you live and the fees aren’t high. You don’t have to pay in much, but the sooner you start, the more they get.
Put an annual calendar reminder in to do a quick check that you are still getting a good deal.
I am assuming you’ve already got your stuff insured. If you’re in the UK, you don’t need health insurance, but it might be worth it if your family have a history of issues, the NHS isn’t exactly in in fight ready health itself.
The key things here are life insurance and, if you haven’t got at least six months of savings in the bank, income protection insurance. Life insurance isn’t too expensive a month, I pay about £30 for both of us, but your situation will be different. Check out MoneySavingExpert or one of the comparison sights. Make sure you read the small print about when they will and won’t pay out. Set the amount to pay off the mortgage and give a bit extra. If the worst happens, it would be nice if your partner didn’t have to return to work for a while if you can manage it.
Income protection is a bit more expensive. Ours is about £80 a month. That’s a lot, but we’ve decided it’s worth it because we’ve got a bit in the bank, but we think the peace of mind is worth it. Again, shop around.
Three buckets of boring, but essential things to get sorted before birth. And if nothing else, in those early months when it feels like you have no idea what you’re doing and can’t even muster the energy to cook dinner, you can at least take solace in a time when you were a competent grown-up and realise it will return again.