Foster carers provide an essential service for thousands of vulnerable children in the UK, but providing a loving and stable environment doesn’t come without expense. Each foster carer receives an allowance to cover the cost of care for each foster child, but there are circumstances where this isn’t enough. Below, we’ll go into detail about the type of financial support available and how to manage money effectively.
Financial Support for Foster Carers
Foster carers receive an allowance from either a foster agency like Fostering People or a local authority, which is designed to cover the cost of caring for any foster children in the home. The amount of allowance received will vary depending on the needs of each child and their age, as well as how experienced the foster carer is. In addition, you may be entitled to extra benefits from the foster agency or local authority as well as grants to pay for educational resources and other specific items.
On top of receiving allowances and other benefits, foster carers are entitled to tax relief up to the value of £18,140. However, you should note that this amount fluctuates in line with government budgets.
Tips for Managing Finances
Now that we’ve established that foster carers receive allowances to cover the cost of services provided, it’s important to know how to manage finances. The first step in this journey is writing a budget, which involves totalling monthly income and taking away any outgoings; money-tracking apps can be used to stick to the budget.
Considering how much the cost of living has risen in 2023, you may need to eliminate unnecessary expenses. For example, if you’re subscribed to multiple video streaming services, we recommend choosing one. Each streaming platform has hundreds of movies/TV shows, so there’s bound to be something to get stuck into.
Emergencies can strike at any time, from the car breaking down or the boiler packing in. These are unforeseen costs the foster allowances won’t account for, which is why we recommend putting aside an emergency fund.
Taking out credit and effectively managing it is the only way to build a healthy credit score, which allows you to access finance plans and other lending. However, if you’ve slipped into poor credit habits, you may need to seek debt support to put things right.
Teaching Foster Children About Money
Teaching foster children about money management can help keep everything on track in your own home. For example, if your foster children understand that electricity costs money and even chargers with nothing plugged into them use electricity, they may have greater self-awareness about turning plugs and lights off.
Money management is an essential skill for foster carers, and it’s even important for foster children to learn. Taking into account foster care allowances and any other income, writing a budget is a logical place to start; you can work out where to reduce expenses and how to save from there. Remember, if you’re struggling with debt, there is always support available.