It might sound obvious, but new parents tend to become a bit more cautious. After all, you now have someone else relying on you to look after them, and having a child is the ultimate reminder that life is precious.

So, if you don’t already have a will in place, now would be a good time to write one. As well as making sure that your assets will be distributed according to your wishes when you pass away, a will means you’ll also get to appoint a guardian to look after your child, should the very worst happen. Without a will, that decision could be left to the courts to decide.

Similarly, you should make sure your family will be looked after financially if you die or are no longer able to work.

Before having children, people often skip taking out insurance and protection policies. They’re not particularly exciting and often feel like an added expense you can do without. But once you have children, you simply don’t have that luxury of being unprepared and hoping for the best.

I often remind clients that protection is the financial equivalent of wearing a life jacket – it’s far better to have it and not need it, than need it and not have it! Anyone who has just started a new family should therefore think about creating a budget that includes financial protection policies, such as life insurance, income protection and critical illness cover.

Once those basics are covered, your thoughts may switch to the longer term. Most new parents are determined to make sure their child gets the very best education possible and, for some, this might mean choosing private education.

But private education certainly doesn’t come cheap. For example, sending a child to a private secondary school between the ages of 11 and 18 could mean spending upwards of £150,000 in total, while sending them to a boarding school could cost four times that amount.

Add in university fees, which today would cost up to £27,750 for a three-year course, and the figures begin to look extremely daunting. Unless you have that sort of money already available, you’ll need to start investing as soon as possible.

If you’re planning to set aside money for a few years, either to pay for school fees or university, it’s a good idea to make sure you’re taking advantage of your annual Individual Savings Account (ISA) allowances.

Individuals can invest up to £20,000 in an ISA each year, so that’s £40,000 per couple. With interest rates still so low, investing in a Stocks & Shares ISA rather than a Cash ISA will give your money increased potential to grow over several years, although it’s worth remembering that investments can go up as well as down, and you may not get back the full amount invested. Any money withdrawn from your ISA will also lose its tax benefits.

Rather than using up personal ISA allowances to save for their children’s future, some parents may instead choose to invest in a General Investment Account (GIA).

A GIA is similar to an ISA in terms of the types of investments it can hold. But while there’s no limit to the amount you can invest, a GIA doesn’t benefit from ISA-like tax breaks, which means you may have to pay income tax and capital gains tax on your returns. That said, you do have annual allowances that can be used to offset capital gains, so with careful planning, tax can be kept to a minimum in many cases.

Arguably the biggest benefit of a GIA is that your investment is held in your name, not your child’s, so you can decide precisely how much of it they should receive and when.

If you’re keen to start saving for your child’s university education, or perhaps even a deposit on their first home, you can also consider opening up a Junior ISA (JISA) on their behalf. With a JISA you can invest up to £9,000 a year, either in a Cash JISA or a Stocks & Shares version.

Starting early can reap significant rewards, thanks to the magic of compound interest. For example, if you started saving £750 per month (which is the same as the annual limit of £9,000) as soon as the child was born, then assuming it achieves annual growth of 2.0% their JISA could be worth more than £194,000 by the time they reached 18.

Of course, every parent should be under no illusions that while JISAs are hugely tax-efficient, the investment itself is held in the child’s name, and becomes theirs when they turn 18. Some parents may be reluctant to give their child such responsibility – and wealth – at such an early age!

Finally, if you’re keen to set aside money for your child’s education, investment bonds present another option. An investment bond is structured with different slices or segments, which then allows you to gift some segments to other people. So, whereas a GIA is subject to capital gains tax, an investment bond is subject to income tax. Segments could be assigned to a ‘child’ once they reach the age of 18, and potentially extracted tax-efficiently to cover university fees.

New parents can often find themselves surrounded by people offering well-meaning advice on the right way to look after their child and how best to plan for their future. But when it comes to managing your financial plan as a parent, our advice is to focus on the basics first. This means protecting what you have while also investing for you and your child’s future.

At Amber River, we can help make life easier with straightforward financial planning that helps you build a better idea of what your family’s future can look like. We call this Life Landscaping®, and it’s a great way to work out how the changes you make today can create a secure and prosperous future for you and your family.