Since the cost of living continues to rise all across the board, it will probably come as no great surprise that the cost of raising a child in the UK is higher than it has ever been. According to research released in February 2016 by the Centre for Economics and Business Research (CEBR), the cost of raising a child to age 21 has leapt to £230,000. That is more than the price of an average semi-detached house in Britain (as of January 2016 the average UK home cost £196,829). And this is based upon sending the child to state school. Sending the child to a private school will increase the cost to more than £373,000, or almost £500,000 if the child goes to boarding school. It’s enough to make prospective parents think twice about even having children. How can you keep expenses from spiraling out of control? And do you really have to choose between owning a house and having a baby?
Some costs just keep going up, but others are falling
The current average cost of child-raising represents an increase of more than £2,500 in the last year and over £13,000 within the last five years, according to insurer LV, which commissioned the above-mentioned study. The cost of childcare alone rose by 4.3% last year, outstripping general inflation (0.2%) and average wage rises (2%). And since 2003, childcare costs have risen by 78%, greatly outpacing the 45% inflation rate during the same period.
On the bright side (if very slightly less dim can be called bright), the CEBR study predicts that parents in 2016 will spend £10,942 on clothes over the life of their child, a reduction by 4% over the 2003figure. The children will likely take little comfort in this, as they too will feel the pinch, with the supply of pocket money from their parents not even keeping up with the almost nonexistent rate of inflation.
Many mothers are now putting off having a child until well into their 30s, and on average parents are having fewer kids, with the skyrocketing cost of raising a child frequently cited as the main reason. But these phenomena belie the fact that until recently, Britain was actually experiencing a baby boom, according to official numbers from the Office for National Statistics.
Whilst baby booms and busts come and go, the human desire to have children isn’t going to go away any time soon. As a blogger named Candice Watters wrote a few years ago on the Boundless blog, in an article titled, “Why Have Babies?”: “You can’t measure the worth of a baby…with a spreadsheet or calculator the way you would material things, entertainment, travel or education.”
True enough. But you can calculate ways to save money and thus make life easier for you and that baby.
It’s never too early (or too late) to start saving.
The optimal time to begin your saving strategies is before your child is even born. Research all of the government benefits and schemes for which you qualify. The Gov.UK web site has resources covering many aspects of childcare and parenting, from pregnancy and birth, to funding childcare for kids of all ages, to financial support for your child’s education.
Don’t just accept any way of doing things simply because your mum may have done it, or because all of your friends do. For example, you should carefully consider your options for delivery methods so you can save as much money as possible without compromising the health and safety of mother or child.
After the child is born, don’t be afraid to avail yourself of secondhand items for your baby. As long as the items are in good, sanitary condition and functional, the money you will save is a lot more important than acquiring the latest trendy status symbol item.
When your first child is born, it is natural for you as a parent to feel overwhelmed with a sense of the incredible responsibility you have. For most parents, this responsibility is welcomed with open arms despite the constraints it might place on your previously childless lifestyle. That sense of responsibility is the driving force behind many parents’ decision to take out life insurance to make certain that the child is provided for in the event of the loss of one or both parents. The earlier you begin a policy, the lower your monthly premiums will be, and thus, the greater amount of coverage you’ll be able to afford.
You will also want to research the many government programmes and benefits that are available to parents such as Child Tax Credits, Working Tax Credits, and Childcare Vouchers, which can be worth thousands of pounds a year, something that most new families could find quite useful.
Now, as for the question about whether you have to choose between owning a home and having a child: that’s one that we can’t answer for you. You may indeed have to choose between the two; it’s not always possible to “have it all”, despite what we’d all like to believe. As costs continue to increase for nearly everything, more people will find themselves having to give up one dream in favour of another. But life has always been about trade-offs, and most mums and dads will probably tell you that despite the expense and frequent frustration that come with parenthood, they wouldn’t have missed it for the grandest house in the world.