The cost of raising kids

Expect a huge drain on your household budget

Now that you’ve proudly started a family and already thinking of your next skiing holiday and how to break the news to the grandparents about baby-sitting, you’ll be shocked to discover the real cost of having kids.

Yes, we’re afraid to inform you that from now on you’re going to be digging your pocket for an additional £3000 on average per child per year. Throw in all the extras like private education, university costs, holidays and expensive hobbies, and you’re looking at a figure of £150,000 by the time they’ve left home.

An online survey by virtual bankers Egg put the cost at £2,916 for daughters every year and £2,790 per son, while Financial services company Liverpool Victoria are more conservative, they estimate an annual bill of £7,315 for each year up to age 21 – which is £610 a month – more than any other European country. In all, us dads in the UK are helping to spend a staggering £95bn a year on raising our kids.

Ballpark budget

Here’s a basic breakdown of what to expect;

• First year = £7,558 – expensive because of baby equipment and childcare
• Years 2-5 = £39,973 - mostly childcare
• Years 6-11 = £38,488 - predominantly recreation and food
• Years 12-18 = £35,001 – including food and the increase from clothes
• Years 19-21 = £32,600 – of which the largest expense is education

If you want to send them to a private school you can add at least £6,000 per school year. With more than 175,000 super-rich kids getting a head start with annual child-raising budgets of £20,000 or more, private schooling might not be a bad idea if you want them to really achieve.

So why are babies and toddlers costing so much in today’s Britain? Well, here’s a simple breakdown of the first year according to an American Express survey;

Pregnancy clothes and toiletries: £200
Nursery kit: £400
Pram and car seat: £300
Disposable nappies: £500
Formula milk and food: £1,000
Clothes: £300
Baby skincare products: £400

Total: £3,100

Then there are toys, plus activities for the mother and baby - swimming classes, baby gym classes and music classes to name but a few.

Of course this doesn’t take into account yet the lost opportunity costs, such as lost second income while the missus stays at home on mother duty for several months or the optional extra of a baby sitter. Within a year or two you’re going to have to think about child care and play school to keep them busy and we haven’t even mentioned health care and additional insurance.

So, now you know why we suggested inviting mother-in-law to come and stay and give a hand. There are several other means to wrestle this figure into a more reasonable budget. Think of foregoing the excitement of kitting yourself out with a brand new artillery of push chairs and fancy car seats by using hand me downs and shopping for second hand items on the internet or high street. After all, kids grow out of their kit very quickly so it makes sense to re-use items. Luckily it gets cheaper when number two arrives but there are going to need to be luxury item sacrifices, for Britain is unfortunately one of the most expensive places to raise kids.

Here is more a more detailed article on the cost of kids, and an entire website dedicated to the topic with guidelines tips and calculators.
http://www.handbag.com/finance/householdfinance/raisingkids/
http://www.raisingkids.co.uk/fi/fi.asp

Shopping online
Buying the tackle
Child care and play school