Couples with kids spend over £5,000 a year more than couples who don't. This adds up to more than £96,000 over 18 years. And, parents reading this will know that spending doesn't miraculously stop once they turn 18.
Even boiling it down to the absolute essentials, couples with kids spend almost a fifth more than those without (£2,266 a month vs £1,923). Meanwhile, single parents spend over a quarter more than singles without (£1,428 vs £1,150).
This obviously has a knock-on effect to our financial resilience. It means we're less likely to have as much cash at the end of the month. It's no wonder that, monthly, a couple with kids has an average of £227 left after paying the bills, while a couple without has £261. A single person living alone has £34 and a single parent just £25.
Unsurprisingly, this influences beyond the immediate future, with parents also less likely to have enough emergency savings or adequate life insurance compared to non-parents.
There are some practical steps we can all take to lighten the load without costing the earth. This article isn't personal advice. If you're not sure what's right for you, ask for financial advice.
Make the most of the help available
Check if the government can help. Both tax credit and universal credit have childcare allowances. Today's babies will also benefit from a change in April 2024 where working parents of two-year-olds can access 15 hours of free childcare. This will increase to 30 hours in 2025.
If you're already in the midst of nursery, and the inevitable weekly illness that comes with it, you could still get tax-free childcare to make your money go further.
Protect your family
As nobody likes to think about something bad happening to them, it's not a huge shock that so many aren't protected. Income protection and life insurance are topics we'd rather deal with later. But when it comes to weighing up your insurance policies, protecting you and your family should be front of mind.
Widen your safety net
We should all have a savings safety net of 3-6 months' worth of essential expenses in an easy access savings account, in case of any nasty surprises. But inevitably when you have children, your essential expenses will increase, so you need to make your safety net bigger to account for this.
No more plastic presents
Fed up of the bright plastic cluttering your house every birthday and Christmas? You could ask family and friends to pay into your child's Junior ISA and help build up a nest egg for when they turn 18. Investments over 18 years offer far more potential growth than cash over this kind of timeframe. Kids can now go free with the HL Junior ISA. We've removed our account charges, including online share dealing commission, so that more of what you pay in will benefit the child. Depending on where you invest, other charges could still apply.
Put your life jacket on first
Children can easily soak up all the available cash, but it's vital to keep your own needs in mind too. If you put your savings and long-term investments on hold, you might find yourself short in later life.
Wanting to get the best for our children often means we might spend money we don't ‘need' to. But in the long run this isn't the best approach. We should focus on passing on good financial habits too. You'll thank yourself later if the shoe is ever on the other foot.
Take the time to assess your own finances and see where you can make small changes like the above. These small changes could make a big difference to what you can pass on to your children.
Discover the many ways you can pass it on today.