New mum, new challenges: How to plan your financial future

Motherhood means taking on new roles and responsibilities – it also requires careful financial planning to ensure all income is protected and that retirement plans are accounted for. While all this can seem like just another mental burden to deal with, support from a financial adviser can be hugely helpful.

Overview:

  • As a new mum, gender pay gap statistics reveal the importance of having a financial plan in place to safeguard your family’s future.
  • Your plan should include some form of protection insurance and investment for retirement.
  • To ease the mental burden, discuss your needs with a financial adviser.

The many hats of motherhood

Being a new mum has its challenges. Whereas you’d fully expected sleepless nights and were prepared to deal with colic and 3am nappy changes, you probably hadn’t anticipated the intricacies of collapsing a buggy, shoehorning it into the car, then getting it back out and up again.

On the other hand, little were you to know what a huge sense of achievement that showering and washing your hair before you leave the house could bring!

Your efforts and energy can quickly become depleted – little wonder, then, that many women feel as though they’re having a break when they return to work.

In spite of this, life does get easier, as babies grow and you both find your new rhythm, but a mother’s mental load can be a different story. Concerns about choosing the best nursery lead on to sourcing costumes for school dressing-up days, homework strife and keeping the fridge fully stocked – all the while attempting to keep the house in some sort of order and potentially neglecting the day job in the process.

This became all the more pertinent at the height of the pandemic, when mums across the country had to assume the role of ‘teacher’, too.

Is all fair in housework and childcare?

What’s more, it’s often the mothers who absorb the extra work. The Institute of Fiscal Studies recently reported that where women earned less than men, they actually carried out double the amount of housework during the pandemic and 41% more childcare. Even in cases where they earned more than their partner, they nevertheless did 6% more housework and 22% more childcare.1

Such statistics highlight to advisers that the financial value of a mum goes way beyond her take-home pay, and there’s therefore a concerted push to broach the topics of life insurance, income protection insurance and critical illness cover with families.

The notion that protection is solely to ensure the higher earner is covered to pay the mortgage and bills in the event of a crisis is false – it’s also about protecting the mother’s financial contribution, with all of their unpaid work.

Consider how things would play out if illness – or worse – meant that you weren’t able to work, run the household, or get the children to and from school, as well as extracurricular activities. A personalised protection package would go a long way to at least mitigate the worry of money and mean that help could be arranged if needed.

Balance is everything

Aside from protection, financial advisers advocate retirement planning when talking to mums.

From a financial point of view, becoming a new mum could make it increasingly complicated to balance the needs of your new family against your own over the long-term. And realistically, having a child will inevitably mean hefty expenditure, not to mention affecting the amount of money you can reasonably save into an ISA or pension – whether you stay at home or work full time.

All things being equal

Pay equality is taking baby steps in the right direction; however, the gender pay gap does increase from age 40, as more women take career breaks or choose to work part time.2 In the same way, the Institute for Fiscal Studies states that, by the time a woman’s first child reaches age 20, she is likely to have spent 10 years less in full-time paid work than her male colleagues.3

Figures such as these are certainly food for thought, and they may understandably dent your optimism about your financial future. However, recognising and acknowledging these challenges can be the biggest step in overcoming them and getting your savings back in order.

It may also strike you as ironic that this article raises matters such as protection, savings and retirement planning for mums alongside talking about mental load. However, this is where financial advice can really come into its own.

Talking to an adviser is about empowering you to put a plan in place that works for you and your family to help improve and protect your financial future. It’s also about increasing your self-awareness around your appetite for risk following a change in circumstances. Once you have that trusted understanding with your adviser, there’s nothing to say this won’t be achievable – plus it’s one less mental burden to deal with.

For help in organising your finances – from protection to pensions – reach out to the experts at Wellesley today on 01444 244551.

 

 

Sources:

1 Institute for Fiscal Studies, IFS Deaton Review of Inequalities report, 2021
2 Office for National Statistics, Gender Pay Gap in the UK: 2020
3 Institute for Fiscal Studies, Wage Progression and the Gender Wage Gap: the Causal Impact of Hours of Work, 2018

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

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