PARENTS CAUGHT OUT BY BABY COSTS
Money Advice Service launches ‘Baby Costs Calculator’ as new research reveals
half of parents underestimate the cost of having a baby
New research from the Money Advice Service reveals that millions of parents are missing the mark when it comes to the money side of planning for a baby. Half (50%) of the parents surveyed underestimated how much they would spend preparing and caring for their first baby in its first year.
The research, conducted among 1,000 parents with children under 10 years old, revealed that of those who underestimated how much they would need to spend, six out of ten (61%) spent up to £1,000 more than they expected to, and a fifth (22%) were hit with between £1,000 and £5,000 in unexpected costs.
It seems that many expectant parents don’t factor money into their planning at all. A third (33%) of the parents surveyed chose not to seek money advice before having their first baby, preferring to let things pan out on their own, while almost a fifth (17%) didn’t even think about the money side of things.
And it’s not just first-time parents who aren’t seeking the advice they need - over two-fifths (42%) of parents say they still wouldn’t know where to go for money advice if planning to have another child.
The Money Advice Service has released the findings today as it launches its new ‘Baby Costs Calculator’, a free tool that helps parents calculate how much they will need to spend on their baby in its first year. The new online calculator is part of the Service’s comprehensive Parent’s Guide to Money.
The Calculator shows costs (excluding childcare) scaled to three different budget levels ranging from £1,600 to £3,700 or up to £7,200. The Parent’s Guide to Money also features a Baby Timeline and advice on topics ranging from benefits and entitlements to planning for childcare costs.
Sarah Smith, consumer expert at the Money Advice Service, said:
“Everyone knows that having a baby is expensive, but without a clear picture of how much you’ll actually need to spend, it’s difficult to prepare properly. We’ve created our new Baby Costs Calculator to help parents, whatever their budget or level of experience, get a clear idea of the costs involved and make sure they’re as ready as they can be before their new arrival. As well as advice on essential costs, our simple new tool contains a range of other useful resources to help parents make the most of their money during this exciting but sometimes stressful time in their lives.”
Louise Silverton, Deputy General Secretary of the Royal College of Midwives, said:
“The new Baby Costs Calculator will be a useful addition for the Parent’s Guide to Money and will enable midwives to direct parents to easy to use resources to help them manage their finances and plan ahead”.
Student midwife, Alice Stableford commented:
“As a student midwife, I give the Parents’ Guide to Money to my patients as part of their antenatal appointments. It’s a really useful resource to help parents prepare their money matters when it comes to having a baby. It’s really important but can be difficult to do, especially when it comes to getting an idea of the costs involved. The new Baby Costs Calculator will help parents to do this properly and is a great addition to the Guide - I will be recommending it to my patients.”
“As a student midwife, I give the Parents’ Guide to Money to my patients as part of their antenatal appointments. It’s a really useful resource to help parents prepare their money matters when it comes to having a baby. It’s really important but can be difficult to do, especially when it comes to getting an idea of the costs involved. The new Baby Costs Calculator will help parents to do this properly and is a great addition to the Guide - I will be recommending it to my patients.”
Case study - Rachel, expectant mum:
“I used the Money Advice Service when I was six months pregnant with my first child. The Money Adviser, Sarah, explained the Service could help with my financial situation. And I was interested because I didn’t know what I could claim for, such as tax credits. Sarah wrote down everything I was entitled to, including a maternity grant of £500, tax credits and income support which I started claiming at 29 weeks; also the healthy start vouchers and child benefits when the baby is born. As a lone parent, I didn’t have a clue what to claim. If I’m honest Sarah is the only person who has told me what I’d be entitled to. Sarah talked through budgeting and preparing for my baby. She put it in a table format, so I knew how much I had to put away each week and what I’d get if I put it away in savings account. She showed me that it doesn’t have to be a massive amount of money – just £5 can make a difference if I can save it. Until then, I hadn’t thought building up savings was possible. She planted ideas in my head that I could save. Now I‘ve seen Sarah, I feel like I know where I’m going and what I can get. I don’t feel in the dark about it.”
The Baby Costs Calculator is online at moneyadviceservice.org.uk/parents. It is part of the Money Advice Service’s comprehensive ‘Parents’ Guide to Money’, which features a Baby Timeline and wealth of advice on topics ranging from benefits and entitlements to planning for childcare costs.
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