Having a baby is not cheap. They warn you about this as soon as that little blue line appears on the stick: you best get saving because having kids equals being poor.
It’s not just the expensive travel system, the thousands of nappies you’ll go through, the gorgeous clothes you end up spending a fortune on and the baby classes and swimming lessons; as a woman you also need to worry about replacing your wage. I’m one of the lucky ones who gets a pretty decent maternity package from my employer which involves six months full pay followed by thirteen weeks of SMP. Without those months of full pay, there’s no way I’d be able to afford to take twelve months off from work, so I really am very lucky. Even so, to fund the other six months, especially those three months where I am on zero pay, sacrifices must be made.
When I had Dexter I had bills to pay, don’t get me wrong, but this time I have some serious financial commitments including a mortgage and car finance, so planning a budget for the twelve months of this maternity leave was imperative.
I actually started saving three months before my maternity leave and I had a key figure in mind: £6000. Why this number? It just about equates to the amount of pay I’ll be losing over the twelve months once you factor in tax rebates and my annual bonus which is usually paid in July or August.
Six grand is a vast sum of money. It could buy a decent sized second hand car, give you enough spends to travel around South East Asia for a year or is half of a deposit for a house. It was a big ask for me to try and save this amount in six months, but I did it…and this is post is all about how I achieved that goal.
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Plan, Plan, Plan
The first thing I did was create a spreadsheet that detailed every single bit of income and every single outgoing. It can be pretty eye opening to see exactly what you have going out every month: direct debits you didn’t even know existed; the price of certain insurances which have crept up over the years or the added cost of all your mobile phone bills, broadband and TV packages. My eyes watered when I saw the extortionate amounts we were paying for certain things.
My husband and I agreed on a set amount of ‘spends’ we would each get per month and I added this as a column in the outgoings section. It’s very easy to go overboard spending when you don’t have a set budget per month, and I’m talking about my husband and his bike bits here, not me! I hoped by giving him his own spending money, we’d have a little more left in the bank at the end of each month. (A cyclist’s wife can dream, right?)
I set up the spreadsheet so that there was a column that automatically deducted the outgoings from the income and the amount that was left over was the figure I would save each month. Now, with only six months to save £6000, I knew I needed to save £1,000 a month, but before I made any lifestyle changes, the figure in the savings column was ridiculously low. Action was needed!
There are two key ways to save towards a specific savings goal: increasing income and reducing outgoings. To achieve the goal I had in mind, I knew I needed to work on both.
How I Reduced Our Outgoings…
Food is our biggest expenditure after our mortgage. What can I say? We love to eat! We could quite easily spend £100 a fortnight on a big Morrisons delivery, £50 a week on top up shops, £40 a week on takeaways and £8 a day on buying lunches and coffees.
Firstly, I sat down and made a meal plan for the month, not just for dinners but for lunches too. I factored in when Dexter would eat at the childminder’s house and made sure we had at least one day that was meat free. I planned when we would have a takeaway (once per fortnight) and started making packed lunches for myself and my husband.
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I reduced our total monthly food spend from £760 to £320 with the biggest dent coming from us taking packed lunches and cutting down on takeaways.
Saving per month: £440
We have a total outstanding balance of around £3,000 which at 19.9% APR works out at around £50 a month interest. I applied for a new card and transferred the balance over. Although I had to pay a £90 balance transfer fee, I started saving money in the second month.
Saving per month: £50
When we moved into our new home we were on a standard tariff with npower for our gas and electricity which I had no idea would be more expensive than some of their other tariffs until the first extortionate bill came in. Over £100 for one month and this was during the summer when we weren’t even using the heating! I immediately started shopping around and before we even made any changes in the home with how we used electricity and gas, I started saving £25 per month by switching over to Bulb who charged considerably less per unit used.
We also started making some changes in the home. We began turning off lights and TVs when we weren’t in the room; we turned the thermostat down by two degrees; I reduced the amount of time the water and heating came on each day by half an hour and I turned off the radiators in rooms we barely used, like the downstairs toilet and the dining room. This saw us save a further £20 per month on energy costs.
Savings per month: £45
We were signed up to two TV packages, Netflix and NowTV, plus we had the TV Licence to pay, bringing our total TV bill to £36.45 per month. I cancelled Netflix and negotiated with NowTV reducing the monthly bill from £17.98 to £9.48.
Savings per month: £14.50
Broadband and Mobile Costs
Our internet connection is vital for us as not only do we stream our favourite TV shows, but I am using the Internet constantly to blog and my husband uses it to train on his bike with Zwift most evenings. We’d be pretty lost without broadband and our mobiles but the cost of the services just seemed to be creeping up and up. I used an online comparison site to search for broadband deals and got our package reduced from £50 per month to £22.50. I couldn’t do much about my husband’s £60 mobile phone bill as he was not yet out of contract, but mine was, so I switched to a sim only deal, saving me £35 per month.
Savings per month: £62.50
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3. Other outgoings
Fuel is another big expense in this household as we both work around thirteen miles away from home. The price of petrol is completely out of our hands, but we can control the way that we drive. Our commute to work involves a short drive on the motorway so I reduced the speed by 10mph. I also started driving in as high a gear as possible and only filled up half a tank at a time. These small changes saw us both save a few quid a month on petrol and diesel.
Savings per month: £40
I’m now on maternity leave so although I wanted Dexter to keep going to his childminder’s, I knew we could make a big saving by dropping his days by one per week. This saving is obviously unique to our circumstances, but is a saving per month nonetheless.
Savings per month: £135
How I Increased Our Income…
With our monthly costs cut by just shy of £800 a month, it was now time to see how we could increase our income.
I make a nice bit of extra income from my blog which I don’t usually factor into my budget. Instead I use this money to pay off debts, go on holiday or put towards updating our home. However, on top of all the cost cutting savings I made, I knew I still needed to save another £1200 over the six month period, so I worked on emailing old contacts, increasing my page views and improving my DA and I managed to earn the £200 (plus a bit extra) that I needed to top my savings up to the £6000. Again, this is pretty unique to our situation, but there are lots of other ways to make money online if you’re not a blogger.
Selling on eBay/Facebook
It’s always good to have a bit of declutter and get some bits on eBay or Facebook Marketplace. Old toys, baby clothes, unused furniture…one man’s junk is another man’s treasure and it’s pretty incredible what some people will pay for stuff you consider useless.
You can always consider selling on eBay professionally too – this is a good way to generate an income from home once your little one has arrived. Just create a seller account, register as self-employed, open up a business bank account and monitor your earnings so you can pay your tax correctly at the end of the year!
This website is a must have if you do lots of shopping online, and even if you don’t, you must use it every time you shop around for a new energy or mobile phone provider. Since joining in May 2016, I’ve earned over £700 in cashback just from clicking a link on their website each time I’ve wanted to buy something. My biggest cashback was £99 when I opened a savings account with Scottish Friendly in 2017 and the company that’s paid me the most is Expedia who in total have paid £113 for two different hotel stays I’ve booked through them.
Haven’t yet signed up? Sign up via this link today
Finally…Make Sure You Actually Save The Money
It’s all well and good cutting your outgoings, you have to make sure you actually save the money. I set up a savings account with a decent rate of interest and set up a direct debit to make sure the money was paid into the account each month. The account is with Nationwide who have this funky tool which you use to set up a savings goal and it shows you how far ahead or behind you are. A brilliant feature for someone goal driven like me who can’t bear to see it in the red!