The hidden cost of raising kids
Had anyone told me before I became a parent that the cost of bringing up a child to age 18 is estimated at £143,000, I would have assumed that child started life with a diamond-encrusted dummy in its mouth.
But as the mother of two boys aged two and four, I'm starting to realise that this figure, calculated by the Child Action Poverty Group and based on meeting a child's minimum needs only, is actually relatively modest.
As well as all the usual costs associated with having a child, such as childcare, clothing, food, prams, cots and so on, there are plenty of other less obvious expenses which catch many parents out. These include things such as having to get a bigger car in order to fit car seats in, and losing a day's income when one of the children is off sick.
Here, we take a look at some of the hidden costs of raising kids, as well some of the ways you can fight back...
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Kitting out your home
From the moment your baby leaves the hospital or your home for the first time, you'll need a whole array of equipment just to get him or her from A to B. Car seats often cost more than £100, and on top of this you'll need a buggy, cot, travel cot and stair gates, plus a highchair for when they start weaning.
Don't be tempted to buy all these items new, as you will end up forking out hundreds of pounds unnecessarily. Instead, ask friends and relatives whether they have any baby equipment they can pass on, or which you can buy or borrow from them. We were fortunate that both our siblings had children before us, so we were able to use a lot of their baby stuff.
Remember, however, only to borrow or buy things like car seats second hand if you can be certain of their history, and that they comply with the most up-to-date safety standards.
Before we had children, we knew that childcare was likely to be one of our biggest costs, as we both need to work to cover our mortgage and other bills.
But while we were aware it was going to be expensive, discovering that for the boys to do three and half days a week at the local nursery was going to set us back £350 a week still came as a nasty shock.
However, childcare vouchers have proved invaluable, as they enable you to pay for part of your monthly childcare costs out of your income before tax is deducted.
As I am self-employed, unfortunately I am not entitled to them, but my husband's company does provide them. Basic rate taxpayers can receive up to £55 per week or £243 a month of vouchers, which are exempt from tax and National Insurance. Higher rate tax payers who join the scheme now, however, can only receive £28 per week (£124 per month) tax and NI exempt.
Millions of parents end up having to buy a new car to accommodate their families. Our old Peugeot 207 only had three doors, which made getting the car seats in and out a Herculean task.
We managed to part-exchange it for a larger second-hand Peugeot 308, and took out a low-cost loan with Nationwide to cover the remaining £3,000 we needed to borrow. While this added £150 a month onto our living costs, it was cheaper than the showroom finance deal we were offered. You can read more about the various car financing options with Jessica Bown's article.
But it wasn't just the car we ended up changing. Our London home was also cramped for the boys, so we moved out to Kent, buying a cheaper but bigger property, and using the savings we made to cover our moving costs. While my husband now has to pay more to commute in each day, our living costs generally seem to be cheaper – especially when it comes to things like getting an electrician or plumber in.
There's no escaping the fact that having children means your weekly shopping bills will soar. Nappies, wipes, baby food and formula all add up, which is why it is vital to make the most of savings from bulk-buying. It's also really worth using discount codes and vouchers wherever possible. You can find a current list of these at MoneySupermarket's deals channel by searching either nationally or in your own local area.
There is no point in paying over-the-odds for the same item either – but this doesn't mean you have to trawl around the high street. Instead, type the item into MoneySupermarket's shopping channel and a list of retailers and stockists – cheapest at the top – will be returned to you.
While we are fortunately nearly now out of nappies, clothes and food are still major costs. Most of the boys' clothes are hand-me-downs from older cousins, but we do buy them new shoes which are often outrageously expensive. Whenever possible, we wait until the sales and buy bargains then, or shop online.
For example, we've just managed to get my eldest school trainers for £12, down from £34.99 from Sportsdirect.com, and have bought most of the rest of his uniform at Asda and Tesco.
For bigger items, such as furniture for their bedrooms, or play equipment, the auction site Ebay.co.uk is well worth a look, and we often buy toys via the site or at car boot sales too. The boys don't notice if they are new or not, and often they fall out of favour within a couple of months anyway.
Don't buy more food than you need to
The average UK family wastes a staggering £680 worth of food each year, according to government figures. To cut down on unnecessary food spending, write a meal plan for the week and stick carefully to your shopping list, so that you aren't tempted to make spontaneous supermarket purchases – and don't give in to pester power either.
Plan ahead for emergencies
As a freelancer, one of our biggest problems is that when the children are off sick from nursery, I can't just take a day's paid holiday to look after them. With no family close by to help out, this can be a real problem, especially if the children are off for several days.
Fortunately my husband has flexible employers who often allow him to take a day's holiday at short notice, but it's always worth having a back-up plan with a local friend who can step in when work commitments don't permit you to take time off.
The importance of saving
Even though some months it is difficult to make ends meet, we try to save as much as possible for the future, as we are well aware that our costs aren't going to drop anytime soon. Whenever there is any money left over, we pay this into ISAs, as returns are tax-free.
Cash ISAs that are currently worth a look include West Bromwich Building Society's WeBSave ISA 6, which pays3.18% annual interest tax-free on a minimum investment of £1,000, and the Post Office's Premier Cash ISA, which can be opened with £100 and pays 3.01% annual interest tax-free.
Bear in mind, however, that both these rates include a bonus, so if you are considering saving, you may want to move your money once the bonus disappears. The West Brom's 1.66% bonus is payable until the end of September 2013, while the Post Office rate includes a 1.26% bonus for the first 18 months