• The Family Money Coach

2 Top "Tactics" to start saving for your new baby

Updated: May 23, 2021

First off, if you're here reading this, I'm going to assume that you're either expecting a baby, or are a new parent. In which case, congratulations! It's exciting isn't it? Babies are lovely, they are so "squashable" and just little bundles of cuteness.


So moving swiftly on to how exactly do you financially plan for a new baby? Well the first thing that I need to say is it's tough. It's tough because you aren't just planning for a new baby, you're doing that ON TOP of all your regular expenses and activities. That actually leads nicely into the whole point of this blog post - how to start saving for your new bundle of cuteness.


Reward yourself for planning ahead - prioritise your baby, but don't deprive yourself


As humans we aren't very good at saving for things in advance of them happening - and the reason for that is a thing I call the "deprivation principle". When we set a savings target our brain feels like we are telling it that we can't have something - that we are "depriving" ourselves in the present.


Even though our motivation for that "deprivation" might be really strong - like saving up for nursery furniture or because we want to afford a babymoon - we are less likely to follow through with that savings plan over the longer term, because of the over-riding narrative that our brain creates around "delayed gratification".


Two simple tactics when it comes to saving for baby actually rely upon focusing on your baby, AND yourself.


Tactic 1: Permission-based savings.

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This means you automatically “factor in” some immediate gratification. Say you want to save £1,000 in 5 months. You could save £200 each month. But that feels like a big ask, doesn’t it, especially if you haven't been putting that cash aside before. What if instead of £200, you saved £150 over 8 months. Each month, put £125 of it in savings, and pay yourself £25, to spend as you please. Because you aren’t depriving yourself, and in fact you’re giving yourself “permission” with some of it, you’re more likely to follow through with the saving.


Tactic 2: Scaling your savings.

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Scaling means exactly what you think; that we start low, and gradually climb up towards a higher sum. This works because humans like to compete – and no more so than against ourselves. You know the premise behind a step-counter? That you always want to beat yesterday’s target? This is the same idea. Take that £1000 that we used in the previous tactic. Now say that you’re going to start month 1 saving £50. If you increase each month by £25, you’ll have £1000 in 8 months, plus £100 as a “reward” for yourself.


Now obviously, both of these tactics will take you three months longer than the initial 5 month target. However, because you aren't "delaying gratification" or setting arbitrarily high savings targets from the outset you are much more likely to stay on track to save the amount that you want for your new baby costs. What's great with these tactics is that they work with any amount of saving that you want to achieve - (albeit you might not start as low as £50 each month if you want to save £5,000...)


Pretty simple, but also pretty effective. My kind of top tactics!


That's it for this week folks! The next instalment will focus on the financial dessert of your dreams. That's right - it's all about how your money is a mess. An Eton mess.



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