Every mums need to consider this to avoid bankruptcy

Here are some useful tips that every mums need to follow to ensure that their new born baby doesn't make themselves bankrupt.

1. Mortgage

Re-evaluate whether you have enough savings in place to cover repayments while on maternity leave and beyond.

Mortgage repayments are typically the main expense for most households. Children are costly, so it’s worth ensuring you have a safety net to fall back on if you’re caught short of cash.

Think about overpaying in advance, so you have the option to take a mortgage holiday if necessary – where repayments are temporarily suspended for a few months but interest continues to be charged.

This can help ease monthly outgoings while on maternity or paternity leave. Some lenders, including Yorkshire Building Society, will only consider it where overpayments have been made, so it requires careful planning.

Your mortgage provider must approve the mortgage holiday in advance.

2. Savings

Get into the savings habit in advance so you have a financial safety net.

The cost of having another mouth to feed is a brilliant incentive to put money away. Not only will it help to buy essentials, but you could also plan to cover lost earnings during maternity and paternity leave.

Think about a children’s savings account - it’s good to get them into the habit from the start. Lenders often pay better rates and offer a convenient way for parents to save for their child’s future.

Money invested in your child’s name is theirs – and not yours – so any withdrawals may be queried.

Savvy grandparents may also want to open a savings account, such as a Junior ISA. This will maximise your child’s tax-free savings potential.

Use birthdays and Christmas as a reason to save. Involve your child in managing the account once they are old enough.

3. Insurance

Consider taking out life insurance if you haven’t already. Parents need to ask themselves how their family would cope financially if they were to become ill or die.

Add your child onto your existing policy. Providers typically allow you to do this until around 30 days after your child has been born.

Also, check if your car or home insurance policies need updating to match your new circumstances.

4. Make your cash go further

Not every piece of equipment has to be bought brand new. If you do, remember to keep the instructions to help sell on in the future.

Bulk buy must-have regular purchases such as nappies when they are on offer.

Sign up for newsletters from parenting forums and websites – they often contain lots of money-off vouchers for essentials.

Sign up for child benefit – it isn’t automatically paid.

Vouchers are a tax-efficient way of paying for childcare and are usually supplied through a salary sacrifice scheme. The Government is changing the system in 2017, though, so check to see how you’ll be impacted.

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