Can you afford a baby?

Having a baby is one of the most amazing experiences ever, but parents-to-be must be prepared for the fact that their little bundle of joy will cost them bundles of cash.

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Nearly 850,000 babies will be born this year, according to figures from the Office for National Statistics, but research by MoneySupermarket has found that more than a third (37%) of expectant parents are worried about how they will afford the cost of their new addition. And, of those parents, a worrying 44% say the stress has caused them to row with their partner.

Clare Francis, Editor-in-chief at MoneySupermarket, said: “As exciting as planning for a baby is, it can also be a daunting and stressful time. Having to adjust your lifestyle to cope with the new arrival is hard enough, but with many couples seeing a fall in income due to one of them giving up work or taking maternity leave, it can heap further pressure on families when they need it least.

“However, money worries needn’t get in the way of what should be a magical time. Planning ahead and understanding your finances before adding to your family is vitally important and will save you many sleepless nights – at least until the baby arrives!”

As a mother of two, I understand the impact that starting a family can have on your finances. Here are some of the things I wish I’d planned more for before the boys, Alex and Theo, now four and three, came along.

Prepare for a drop in income

If you are both working, there’s no escaping the fact that maternity leave will make a big dent in your finances, so you need to work out how you will cope with a reduced income.

Provided you have been with the same employer for at least 26 weeks up to the 15th week before the week you are due to give birth, and have been earning on average at least £107 a week, then you will be eligible for Statutory Maternity Pay (SMP).

You’ll receive six weeks at 90% of your average gross weekly earnings and after that you can claim either £135.45 a week or 90% of your weekly earnings, whichever is lower, for the next 33 weeks. This goes up to £136.78 a week from this April. If you are self-employed, you should be able to get Maternity Allowance instead which gives you the same amount as SMP.

While every penny of my Maternity Allowance proved invaluable, due to limited savings, we were still left with a major shortfall when it came to paying the mortgage and other essentials such as utility bills.

This meant I had to work again very soon after having both boys, but was lucky as I can work from home and could fit jobs around the children. In retrospect, however, we should have focused on trying to build up a bigger savings pot in advance, so that there wouldn’t have been such financial pressure to return to work so quickly.

Don’t buy everything new

Having a baby is incredibly exciting and parents want to be certain that their home is properly kitted out for their new arrival. However, tempting as it may be to splash out on all the latest baby gear and state-of-the art equipment, much of this stuff will only be used for a very short period of time.

We were fortunate that my sister was able to lend us lots of her old baby equipment and clothes – although we still made a few purchases that turned out to be a waste of money. But if you can borrow items from ‘former new parents’ you should do so, otherwise you could find yourself spending hundreds of pounds on just the basics.

If you can’t borrow what you need, then the National Childcare Trust runs regular ‘nearly new’ sales across the country. Check the NCT website at to find details of the next sale near to you.

Clare Francis said; “For those who are struggling to finance the cost of a baby, don’t fall for all the marketing hype surrounding what’s ‘essential’ for the arrival of a child. It’s easy to believe that you need all of the latest paraphernalia and gadgets money can buy. But in reality, you’ll probably find you need a lot less than you might think.”

Save save save!

One of the biggest mistakes we probably made was not giving enough thought to childcare costs, and not saving as much as we could when we had more disposable income. We knew we would both have to continue working once we became parents, but didn’t fully investigate before the boys arrived just how much it would cost to put them into nursery.

Fees for both of them to attend for three days a week cost us an eye-watering £17,000 a year when they were aged one and two, although once the eldest reached the age of three and we qualified for 15 free hours a week thanks to Early Years Entitlement, costs fell considerably. All children are entitled to receive 15 hours of free Early Years Education for 38 weeks of the year at ages three and four, regardless of their parents' income.

To keep fees down and avoid putting the children into nursery for longer than necessary, we’ve had to work unusual hours which can place a real strain on life, especially when sleep is already limited. I work every weekday evening when the boys are in bed asleep, giving me an extra 15 working hours a week which we don’t have to pay for.

If you plan to pay for childcare arrangements, start looking into how much you will have to pay per week and what percentage of your salary you will need to put by to cover these costs.

Why forward planning pays

There’s no escaping the fact that becoming a parent will change your life – and your finances – forever. Even if you are some way off having children, you can’t start planning soon enough, as any savings you manage to build up will prove invaluable if and when they come along. Try not worry about money all the time however, (although this is easier said than done) and remember that above all, the thing that will be most important to your child is the love and support of its parents rather than their financial situation.

Clare Francis said; “Planning your finances for having a baby needn’t be a major cause of stress for expectant parents. Taking a thorough look at your household budget, making some simple money-saving changes and being realistic about how much you really need to spend on things for your baby will ensure you and your family get off to a flying start.”

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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