How to Prepare for Big Life Goals: Buying a Home, Starting a Family
"If you're planning to buy a home, start a family, or launch a business—your money plan needs to work harder for you."
As a financial adviser, I see people at pivotal moments in their lives. The decision to buy a first home or start a family is incredibly exciting, but it also brings a wave of financial questions and anxieties. Suddenly, your financial plan isn't just about you anymore; it's about building a secure foundation for the future you envision.
This is the point where vague financial goals need to become a concrete, actionable plan. Today, I'm going to walk you through the key financial considerations for these major life events, answering the most common questions I hear from my clients to help you prepare with confidence.
How do I set and fund big life goals?
The first and most important step is to transform a vague dream into a tangible target. "I want to buy a house someday" is a wish. "I need to save £25,000 for a deposit in the next four years" is a plan.
I always advise my clients to use the SMART framework:
Specific: What exactly do you want to achieve? (e.g., A 10% deposit for a home).
Measurable: How much do you need? (e.g., £25,000).
Achievable: Is this realistic given your income and timeframe?
Relevant: Is this goal a true priority for you right now?
Time-bound: By when do you want to achieve it? (e.g., in 4 years).
Once you have a clear target (£25,000 in 4 years = saving £520 per month), funding it becomes a matter of strategy. The best way to fund these goals is by using the most efficient tools available, which leads us to the crucial topic of ISAs.
What is a Help to Buy ISA and a Lifetime ISA (LISA)?
These are two government schemes designed to help you save for your first home, but it's crucial to know they are from different eras.
The Help to Buy ISA: Let's clear this up first: the Help to Buy ISA is a legacy product. It closed to new applicants in November 2019. If you opened one before then, you can continue to save into it until November 2029 and must claim your 25% government bonus by November 2030. It was a great product, but for anyone starting to save today, it's no longer an option.
The Lifetime ISA (LISA): The Modern Choice The LISA is now the single most powerful tool for eligible first-time buyers.
How it works: If you are aged 18-39, you can open a LISA and save up to £4,000 each tax year. The government then adds a 25% bonus on top of whatever you've saved. So, if you save the full £4,000, you get an extra £1,000 of free money from the government each year.
The Rules: You can use the funds to buy a first home worth up to £450,000 anywhere in the UK, provided the LISA has been open for at least 12 months. Alternatively, you can leave the money in the LISA for retirement and withdraw it tax-free from age 60.
The Catch: Be warned, if you withdraw the money for any other reason, you will face a 25% penalty. This not only claws back the bonus but also takes a portion of your own capital. It's for first homes or retirement only.
My Advice: For anyone eligible and saving for a first home, the LISA is a no-brainer. The 25% bonus is an unbeatable boost to your deposit savings.
How do children impact my pension, income protection, and budgeting?
Starting a family is a wonderful life event, but it's also a financial earthquake. It fundamentally changes your priorities and your risk exposure.
1. Your Budget:
One-off costs: The initial outlay for a baby (cot, pram, car seat) can run into thousands of pounds.
Ongoing costs: Your day-to-day expenses will rise.
The Big One: Childcare. This is the game-changer. Full-time nursery costs can be equivalent to a second mortgage or rent payment. You must budget for this realistically. You should also check your eligibility for government support, like Child Benefit (but be aware of the High Income Child Benefit Charge if one partner earns over £60,000) and Tax-Free Childcare.
2. Your Income Protection:
Before you have children, income protection is a sensible policy. After you have children, it becomes non-negotiable. Your ability to earn an income is no longer just supporting you; it's supporting a family that is completely dependent on you. This insurance, which pays you a replacement salary if you're unable to work due to illness or injury, is the absolute bedrock of a responsible family financial plan.
3. Your Pension:
The "Motherhood Penalty" is real. Career breaks to raise children are one of the biggest contributors to the gender pension gap. When you stop working, you don't just lose your own pension contributions; you also lose your employer's contributions and the compound growth on that money.
What to do:
Claim Child Benefit: Even if you have to pay it back via the HICBC, registering for Child Benefit in the non-working parent's name will ensure they receive National Insurance credits, which protects their State Pension entitlement.
Restart Contributions ASAP: When you return to work, even part-time, restart your pension contributions immediately.
Spouse Contributions: If one partner is a high earner, they can make contributions into the non-working partner's SIPP, and still get tax relief.
How much should I save for maternity or paternity leave?
This requires a very specific calculation. It's about building a "Parental Leave Pot" to cover your income shortfall.
Step 1: Know Your Income
Find out your exact parental leave pay. Check your employment contract for any "enhanced" scheme. If you only get Statutory Maternity Pay (SMP), that's 90% of your earnings for 6 weeks, then a flat rate (around £187 per week in 2025) for 33 weeks. Paternity pay is typically two weeks at the flat rate.
Step 2: Know Your Expenses
Create a detailed budget of your essential monthly outgoings (mortgage/rent, bills, food, etc.).
Step 3: Calculate the Shortfall
For each month of your planned leave, calculate: (Your Monthly Expenses) - (Your Expected Parental Leave Pay) = The Monthly Shortfall.
Step 4: Set Your Savings Goal
Add up the monthly shortfalls for the entire duration of your leave. This total is your savings goal for your "Parental Leave Pot."
My Advice: Start saving for this as soon as you start planning for a family. Building this pot in advance will transform your parental leave from a period of financial stress into a time you can fully focus on your new baby.
Conclusion: From a Dream to a Plan
Buying a home and starting a family are some of life's most rewarding experiences. They are also its most significant financial tests. The frameworks and strategies we’ve discussed from leveraging a Lifetime ISA for your first home deposit to carefully budgeting for parental leave and protecting your family with the right insurance are the building blocks of a secure future. They transform vague dreams into a clear, actionable plan, giving you the power to face these exciting milestones with confidence rather than anxiety.
However, a guide can only take you so far. Your personal circumstances, your income, and your specific goals require a plan that is built just for you. If you're ready to take the next step and create a detailed roadmap for these exciting life goals, I'm here to help.
Book a complimentary, no-obligation call with me, Joshua, to discuss your situation and build a financial plan that gives you the confidence to move forward.
Written by
Joshua Shepherd
Independent Financial Adviser
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Disclaimer: This article provides general information and is for informational and educational purposes only. It does not constitute financial advice. The suitability of any savings strategy or financial product depends on your individual circumstances and goals. The value of investments can go down as well as up. Always seek professional, regulated financial advice tailored to your specific situation.
