How to properly budget for a baby

5 min
Updated Oct 30th, 2023

Table of contents

It goes without saying that having children is just about the biggest decision you’ll ever make. You are choosing to shift the axis of your own life so that it doesn’t revolve around you any more. It will be entirely up to you and your partner to make sure that a brand new life grows into a healthy, happy and rounded human being. It’s a vast responsibility on every level; emotionally, practically and financially. The last of these is an issue that tends to come up again and again – how do you budget before deciding to have children?

Parenting is such a huge responsibility that many people don’t think too much about it until it becomes a real prospect. Even several years into a relationship it can even feel like a difficult topic to bring up, because it’s an unknown that can’t really be imagined in advance. This is especially true if a couple has difficulty conceiving. The focus can often turn solely to the present – onto cycles, treatments, fertility supplements and GP appointments. With 1 in 6 couples experiencing fertility problems, it’s useful to know the approximate cost of assisted reproductive techniques should you need to use them.

However, this means that other aspects of long-term planning and preparation stop being a consideration – but the most effective preparation for having children starts long before conception. Some people want to have accomplished a certain amount in their own lives before making the leap, others want to be physically fitter and some might feel that they’re not emotionally ready – but what virtually everyone has in common is that their finances will need significant adjustment well in advance. 

When should you start to discuss budgeting with your partner?

You and your partner might decide that you want children years before you start trying. This gives you an ideal window, not to put off preparations but to start thinking about budgeting. There are a few things to remember when it comes to early budgeting:

  • You don’t necessarily need to start putting money aside every month – after all, this is as much about spending decisions as it is about stacking up a savings buffer. But of course, if you can, then you should!
  • Change your spending habits now. You can’t be spending excessively with such a big commitment further down the line, so try to think about any subscriptions or online purchases that you don’t need to make. If your lifestyle is a little more frugal it will be less of a shock to the system when you’re suddenly spending for three people.
  • Having children will affect other big financial decisions that you make. For example, your next home might be that bit more expensive if you’re looking to be close to a good local school. 

How children can change your views on budgeting

Until a baby comes along, it’s difficult to imagine just how much being a parent will change your approach to money. You’ll find yourself spending significantly more each month as the costs of nappies, baby food, equipment (like a car seat and a pram) and toys pile up, and also having to plan ahead by weeks, months and even years.

  • Remember that making sacrifices for your children’s benefit is going to become the new normal – excessive luxuries like big holidays might become a thing of the past until they’ve flown the nest.
  • You’ll find yourself spending more than you expect in certain areas. You won’t believe how quickly you outgrow your car once you’ve had a baby!
  • Future possibilities are always on the horizon, such as a child wanting to go to university which currently costs more than £9,000 per year. 
  • If you’ve never been a detailed budgeter before, this will be the time to start – whether it’s keeping a monthly spreadsheet or using an app that tracks your spending. 

What are the main expenses that come from having children?

One thing you can be sure of as your children grow up is that they will always be expensive! For many families, this continues well into adulthood, as in today’s uncertain economy and jobs market people in their 20s often rely on their parents for financial stability.

The main expenses of raising a child from birth to the age of 18 can include food, education, childcare and babysitting, clothing, hobbies and toys, holidays, leisure and recreation, furniture and pocket money. Figures from CPAC in 2019 showed that the overall average cost of a child during this period is £185,000 for lone parents and £151,000 for couples. These totals are up by 19% and 5.5% respectively since 2012. Where childcare is required it represents almost half of the total cost outlined.

According to Direct Line, the total cost per child decreases with first, second and third children when raised by a lone parent, but the same total fluctuates for couples, peaking at £173,000 for the third child. The cost of raising a first child averages at £151 per week for couples and £212 for lone parents.

In addition, taking leave from work to have a child can cut your income. While statutory maternity leave lasts for 52 weeks, only 39 of these have to be paid, and after the first six weeks the total may drop from 90% of your earnings down to as low as £151.20 per week. You should speak to your employer’s HR department to find out what kind of maternity or paternity pay you will be entitled to, and what kind of shared parental leave policies they may have in place. 

What to do if you don’t think you can afford having a child

It’s easy to feel put off when reading a clear breakdown of the costs involved in raising a child. But the fact is that no two sets of parents are the same – and you and your partner will find your own ways to overcome financial challenges and have your own areas where you can make the necessary sacrifices. Don’t panic, because there is no one-size-fits-all solution when it comes to budgeting for a baby. It’s a life-changing level of expense, but not everyone spends the same amount and you can be sure that millions of other parents have felt the same as you at some stage.

Think about what state sources of support you might be eligible for, such as Child Benefit.  In addition, consider the ways your family and friends might be able to offer support. This doesn’t necessarily have to be direct financial support in order to be of financial benefit – for example, grandparents or other relatives who can offer childcare will save you money on what this would otherwise cost.

The most important thing to remember is that money can’t replace the unique love and nurturing support that you will put into your child’s upbringing. You will be surprised at the ways you can make a family work, and a comfortable financial situation is no guarantee of the happy, healthy and rounded human being that you’re looking to raise.

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