Just yesterday I bumped into a mum I know. I hadn’t seen her in months and she was very proud to show off Jasper, her two week old baby boy while her older daughter, who used to go to nursery with my eldest, scampered off to play in a soft play area.
We discussed the leap from having one to two children, which we both said we’d found phenomenal. The one thing we didn’t touch on, however, was how expensive it is to have a young family. Without going into details, this has been a hotly debated subject at my family’s dinner table for some time.
According to figures recently published by the friendly society LV=, little Jasper will cost his parents £227,266 between now and the age of 21. His family are likely to spend 28% of their income raising him and his sister.
What I found fascinating was the financial cost of a child’s first year of life. According to LV=’s Cost of a Child report, the cost of a child’s first year has risen by 50% from £7,372, when the first report was produced in 2003, to £11,025 today.
A large part of this increase can be put down increases in childcare costs. For children aged less than a year,LV= has calculated childcare costs have risen by 7% (£,6,623 up from £6,191 in 2013).
Education, food and clothing were also identified as big costs. Not surprisingly, 71% of families have had to reign in their spending to meet the increased costs of having children (my family is firmly within that majority!).
So what exactly has forced families to look hard at the finances? In essence, child benefit reductions, salaries failing to keep up with inflation and the aforementioned increased childcare costs.
LV= has in fact gone one step further. It’s produced a handy on-line calculator to you can see how much your children will cost you to raise. I had a look and when I saw the estimated cost for raising both my daughters I will confess that I winced.
So what do you think? Should we be worried about the cost of having a family in the UK in 2014? Do you think childcare is too expensive? Perhaps you’ve been affected by the child benefit cuts? Leave a comment below and let me know.     Â
11 thoughts on “Family finances and the cost of raising children”
Now that my big girls are 7 and 9, their appetites are massive. Food prices have increased dramatically. We have moved from Ocado shopping to Aldi and we are eating well again because for a while we were not able to afford all that we needed. I have had to let some principles go, such as shop local and independent as I cannot afford to feed them well if I do this. I have three girls so we have been able to reuse all clothes and lots of shoes, though winter boots, school shoes, trainers and wellies don’t last to be passed on. Each birthday party they get invited to costs £7-£10 pounds for presents/ card. Each girl needed a new buggy as I walk a great deal but otherwise we re-used all baby equipment three times. Holidays are with family now and never abroad. After school activities are largely only cubs and the ones run by school as they are cheaper. Days out can’t be combined with lunch out so we always pack a picnic but this is nice to do. I rely on my lovely mum too much for my childcare needs as she does it for love not money! Our rent costs one third of our income. I have never had so little money, and never felt large sums of money disappear so easily. We are one of the middle families that lie between being supported by benefits and those with large incomes. We have what we have, we have a lot of love and fun times in our home, but we have no safety margin in our finances. We are always a paycheck away from not being able to pay the rent. We do run a car, have mobile phones and an internet connection so these are non-essential, luxury items that we choose to have. My husband and I buy almost nothing for ourselves in the way of clothes, shoes, nights out or anything else. Baby three has cost us very little by way of buying her stuff but of course our income took a hit as I have been at home with her. The money we have goes on family needs and the girls wants. They are good girls are grateful for what we give them, though my fashionista second born would like to choose and be bought her own clothes to match her style as her older sister is more into practicality, no-fuss clothing. I have no idea of the point of this, John, but I seem to have been inspired to tell you that times are tougher than they have ever been and we are literally counting the pennies. My husband has a reasonable wage and it covers the basics, the luxuries I mentioned and no more. Money and wishing to give my children more is always on my mind.
Thanks for adding this made very interesting reading 🙂
I can relate to a lot of what you say Tara. The most local we shop these days is Costco! We’ve also had to reign in spending in other areas. Times are very tight indeed and I worry for the family’s future, in particular whether we are saving enough both for our children’s future and out own retirement. Truth be told, I know the answer is no on all counts.
Hi John
Interesting post. Very thought provoking and I was feeling rather cocky until I read Taras comments. We too have 3 girls 4,2, and 0. I think we are just entering the stage of activities/kids parties etc.
We keep costs down by:
– recycling clothes etc
– ebaying
– gumtree
– free days out
– taking picnics/snacks
– relatives for childcare
– buying £1 books for bday presents
– UK holidays
But at the end of the day our kids are priceless and woukdnt swap them for the world 🙂
Take care
Tom
http://www.ideas4dads.net
If only we had relatives nearby for childcare! That would make a massive difference to our lifestyle and finances. We’ve had to cut back on spending in a big way and it’s only going to get tighter. You’re absolutely correct though, the kids are priceless.
Personally I don’t think having two children is more expensive than having one. That may well be because we have two the same sex, so nowt new to buy when 2nd came along! We also don’t have childcare costs to fork out for, as I only work when hubby can be at home to have our sons. We can’t however afford to have a 3rd child, as it would mean buying everything all over again for baby, getting a bigger family car and more than likely moving, so I guess in answer to your question, it is very expensive having children in 2014 and I know we could not afford childcare!!
Interesting post. I’m very fortunate not to have to worry about childcare costs, in Central London they can be crippling! I think we need to address the consumer/throw-away culture that has added so many expenses to our lives: plastic toys, sweatshop clothes, food flown around the world because we insist on eating green beans in January, the fear of not having it all… I’m fighting a losing battle personally, but I do try to shop local and with an eye on the bigger picture.
I think it’s getting harder and harder, and the cost of raising children is quite scary – I have three! I’m not working at the moment so childcare costs aren’t an issue and that makes a huge difference, but on the flip side we no longer have my salary! But, I wouldn’t change a thing 🙂 #MMWBH
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