Don't underestimate cost of first baby

16 March 2012 16:57:28

Having a baby is an expensive time.

If you're preparing to have your first baby, it's essential to take the time to sit down and work out the financial ramifications. New research from the Money Advice Service suggests that millions of people underestimate how much money they will need during the first year of their first baby's life. In fact, many spend thousands of pounds more than expected during this initial 12 months of parenthood, underlining the importance of working out a realistic budget in advance.

Millions spend more than expected
The Money Advice Service's survey of 1,000 parents, all of whom had children under the age of ten, revealed that half underestimated the amount of money they would need to prepare and care for their first baby. Of these, 61% spent up to £1,000 more than expected and a further 22% forked out between £1,000 and £5,000 more than planned during their baby's first year.

Many fail to seek advice
One of the main reasons for this overspending seems to be that many parents do not think to seek advice on the monetary aspects of having a baby. One in three respondents admitted they had not sought advice and 17% did not even think about the financial side of parenthood before having their first child. Parents often do not know where to turn for help, with 42% of parents revealing they still would not know who to contact for guidance in the future.

Important to get clear picture of costs
Sarah Smith, consumer expert at the Money Advice Service, said that having a baby is expensive and that preparing properly is difficult without a clear picture of how much you'll need to spend. To help parents-to-be, the organisation has produced a 'Baby Costs Calculator', which should help people to work out the costs involved and ensure they get the most out of their budget. If you're thinking of having a baby, why not check it out and avoid having a shock when you check your bank account balance further down the line.

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