The cost of living has begun to decrease for the first time in 55 years, however the cost of raising a child continues to increase.
Following the recession, many young adults have been left unable to afford to move out of their family home or support themselves, which has had a knock on effect on the amount it now costs to raise a child. On top of this, in 2012 English universities were granted permission by the UK Government to charge tuition fees of up to £9,000 per academic year. Added to the maintenance loans that most students require to live, has increased the strain upon British households. According to figures put together by the Centre of Economic and Business Research (CEBR), the cost of raising a child and supporting them through university has risen by £5000 in the last 12 months to around £23,000.
With these increased costs of raising a child in the UK, it’s important for prospective parents to understand whether they’re financially stable to support their new family beforehand. Furthermore, it is thought that the first four years of a child’s life are the most expensive, which is why you need to understand how much starting a family could cost you, both initially and ongoing. To find out how much a baby could cost you, use this baby cost calculator.
For those who want to be a working mum, the cost of having a baby could dictate how much maternity leave you would like, or are able to take off. Alternatively you may choose that the best option would be for the father of the child to stay at home. When to go back to work, or whether to be a stay at home parent may also depend on the cost of childcare, which can be extremely pricey. According to the Money Advice Service, “The average cost of sending a child under two to nursery in Britain is now £115 per week part time or £212 per week full time.” This equates to around £6000 plus a year. However, there is help at hand, you can find out about how to get help with childcare here.
For those that are in a position to plan ahead, creating and managing a monthly budget is a great way of helping you save for your future family. Mobile applications such as YNAB allow you to plan and control your finances easily, allowing you to add in purchases as you go. Check out this great checklist for what you and your baby will need, so you can start budgeting today.