Seven steps to family planning

Wah menarik nih. Gotta think seriously about this. After 3-4 years of working, no savings to speak of. Well okay, got one. But still minimum. Very minimum. Sigh....

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Seven steps to family planning

Find a working solution. If you're on maternity leave, you don't have to say for certain that you'll be going back to your job. But if you plan to return to work early, you'll need to give three weeks notice. If you decide to resign, you'll need to give the amount of notice stated in your contract. Your feelings about whether or not to stay at home with your baby may change with the birth, so give yourself time to make this decision if you're uncertain. You'll need to weigh up loss of earnings against the costs of childcare and travel that you'd incur if you decide to go back to work.

Take out life cover. You might want to consider arranging life insurance. If you were to die, life insurance would mean your partner was not left struggling financially. If you buy life insurance, make sure the policy is written in trust, so the proceeds aren't taxed as part of your estate on your death.

Make a will. This allows you to decide exactly which people will inherit any money, property or other assets when you die. It also means you can appoint a guardian to look after your children. See Making a will.

Consider sickness cover. If you were to have an accident or become disabled or ill for a long time, would your family be able to manage? If not, think about buying accident or sickness cover so that you'd have a guaranteed income in the event of your being unable to work for the foreseeable future. This is especially important if you're self-employed. If you're employed, carefully check the terms of your contract relating to sickness pay.

Sort out housing costs. You may want to increase or change your mortgage if you're thinking about moving now that your family's growing. Check interest rates and special offers listed in the financial pages of weekend papers, taking into account early redemption penalties you may have to pay by switching your mortgage if you're already committed to a fixed term.

Plan for your children's future. If your children go on to higher education, you're likely to need substantial funds to support them. It would be ideal if you could finish paying your mortgage at the time they go to college or university. Look into paying off your mortgage earlier than the full term if this would tie in with them leaving school. See Saving schemes for kids.

Look ahead to retirement. It may seem like a long way off but it's a priority to plan for a pension now. If you're working, investigate your company's pension scheme. It may be worth joining, especially if you receive employer contributions. You may also be able to put in additional voluntary contributions (AVCs) to top it up.

Pensions and savings

The Government's stakeholder pension allows you to contribute up to £3,600 a year. You can have a stakeholder plan if you're working or even if you're already in a company pension scheme, as long as you don't earn more than £30,000 a year.

Alternatively, start long-term saving with tax-free Individual Savings Accounts (ISAs).
Staying at home to look after your baby could affect your future basic retirement pension. You can avoid this by getting Child Benefit in your name, which means your pension qualification will be automatically protected, as long as the Department for Work and Pensions has your National Insurance number.

Financial advice
Financial advisers don't work for nothing, and will charge a commission fee directly or indirectly if you use one to buy anything from mortgages to pensions. But as advisers trawl through all the available products and sift out what's going to suit you, you may feel the fee is worth it.