Having kids isn’t cheap. Recent figures suggest that the cost of raising a child until the age of 18 is £75,436 for a couple and £102,627 for a lone-parent family. And if you throw childcare into the mix, then these costs rise even more. And what about university fees? Yep, it all mounts up, and we don’t think it’s putting it lightly to say that things can be tough for families with a new baby. But don’t panic, becoming a new parent should be a happy and exciting time. With that in mind, here are 5 IDEAL financial considerations for new parents.


For something so tiny, it’s surprising just how many things your baby needs – a buggy, a cot, a constant supply of nappies, new clothes with every growth spurt…the list goes on and gets no cheaper. Getting to grips with your finances early on is vital, and this is most successfully achieved by creating a diligent, detailed budget which leaves no stone unturned (and no nappy unaccounted for). 

This doesn’t just mean putting aside extra money for your baby’s ever changing needs. It also requires parents to make sacrifices, savings and changes to their lifestyle. Within the budget, the baby comes first, so those long weekends in Paris, Friday night trips to the pub, Xbox treats…they’re all going to need benching. It’s also prudent to check if there are any new benefits you may be entitled to; maternity allowance, paid time off for antenatal care, statutory maternity pay…it’s all there. Check out the Money Advice Service’s guide to new parent entitlements for more information.


And we don’t just mean a pink piggy bank. It’s a good idea to set up an account with a bank or building society on behalf of your little one and stash away a little money every month to help your child when they reach adult life. You can also give them a little responsibility for their savings account when they’re a bit older and in charge of pocket and birthday money, which can help them to learn life important lessons about budgeting.

There are different types of saving accounts available including instant access and fixed savings. The former means you or your child can withdraw and deposit money at any time, however as you’ve probably guessed, interest rates aren’t that good on these ones. Fixed savings often run for a set amount of time and pay a higher interest. 

Other options include Junior Cash or Stocks and Shares ISAs which are tax efficient ways to save money for your child. Junior Cash ISAs are more or less the same as savings accounts, however the interest is tax-free and the money is locked up until your child is 18. A Junior Stocks and Shares ISA is a savings account that allows you to get involved in a range of investments, but this carries a little more risk. 


When someone mentions life Insurance, the first thought that pops into our head is the question of whether or not it’s really worth it. Then the second thought; let’s change the subject. After all, our own mortality isn’t something we like to face. However, the morbid truth is that we’re all going to die and when you have little ones, life insurance is something you need to consider. If at some point down the line your family relies on you financially, then the answer to that question of ‘is it really worth it?’ is probably yes. 

Life insurance, however, can be a minefield, with dozens of different types to choose from. One such type is family income benefit insurance. Instead of paying out a lump sum in the event of your demise, it pays out as a regular income over a set period of time, which may help your family to make the money last for longer. 


Sorry to keep throwing stats at you, but since the average cost of sending a child to nursery is over £100 a week, and extra curricular activities for older kids can cost parents a staggering £28,000, it’s something we have to talk about. And while university may be a long way off, it will come round sooner than you think. The years fly by, make no mistake, and it’s vital to be realistic and aware of just how much this stuff costs. 

But firstly, let’s talk about childcare. Fortunately, help is at hand in the form of ‘approved childcare’, though the process can be a little complicated, so consult it in good time should you need to access such assistance. You may be entitled to 30 hours free childcare a week, but this is dependant on your employment situation, how much you earn, and your nationality. Check in with the government website on the matter to find out more. 

Thinking further forward to higher education, it’s important to realise that the world may well be a very different place in 18 years. Right now, tuition fees sit at around £9000 a year, but maintenance loans are available, and are means tested according to parental contributions. But many new parents choose not to wait until that time, instead opening a bank account often affectionately called a ‘nest egg’ soon after the child is born to mitigate the costs later down the line. It’s claimed that £60’000 may be needed in total for one child’s study, which equates to £170 a month for 18 years, assuming 5% interest accrued. Food for thought, indeed.


With all the other serious financial considerations, it’s easy to overlook other, perhaps a little more frivolous, things that matter the most, such as summer holidays and Christmasses spent together. However, they do matter, especially for children, with research showing that a simple break can help build family relationships and improve children’s learning and behaviour in school, as well as giving you a much needed rest, too. 

From the quintessential British seaside holiday complete with fish and chips, to camping holidays on the continent or perhaps a far flung adventure here and there, holidays offer an enriched environment for the whole family and a chance to truly bond. It’s never too soon to start saving, so become a savvy holiday maker and deposit a little every month into a designated account for holidays and fun. Having a break to look forward to can be a very welcome light in the difficult first few months of new parenthood.