Fool's Eye View

[ June 9, 2000 ]

Baby Fools

By Nigel Roberts (TMFNigel)

Chippenham, Wiltshire -- There must be something in the water at Fool head office in London: we seem to be in the midst of a population explosion. Our esteemed leader, that Big Chief European Fool David Berger, is about to have a baby (or at least Carol his wife is), James and Angie have been proudly showing pictures of his new son Tom, born a week or so ago, Martin and Helen will soon be enjoying the fun of parenthood for the first time, as will newly recruited Niraj and Shweta, oh, and of course Bella and I are expecting twins any second now (she tells me that the first twin is now fully engaged). What on earth has been going on? Err, um, I didn't mean that, what I meant was... mmm… err…

Having babies is expensive!

Anyhow, moving swiftly on, what does having a baby mean to us Fools? Well apart from the joy (and the pain) of bringing up a child, the biggest impact is the cost! Those little bundles of fun that you bring home from the hospital (unless you have a home birth, that is) cost a hell of a lot of money to maintain; once you have them you don't really have any choice, the costs just keep mounting. I have been castigated by Jerry (sandersj89) on the Foolish Family Finance discussion board for calling children expensive -- he is right, they're not expensive; money spent on them is an investment. It's just that it is such an expensive investment!

I have been searching around on the web all day to find a definitive figure for how much it costs to raise a child in the UK. Amazingly, I have not been able to find this; I know it must be out there. I can tell you how much it costs to raise a child in the USA (amazingly expensive) and how much it costs in Greece (actually quite cheap -- relatively), but a breakdown of the cost for raising a child in the UK to the age of 18? No.

The best I have found comes from the National Foster Care Association, which uses a figure of £73 a week as a guide to how much foster parents will spend in caring for a child. This cost does not include anything for your child's education, or health care, or any other "extras", but if we take it as a basis, and calculate the cost over a year this works out at around £3,800; so over 18 years a child will cost you a minimum of £68,000. So when our twins arrive in the next week or so we can look forward to the costs of "having our children" (we already have Catherine who is 2½) exceeding £11,000 a year! It is money well spent, but it is a huge amount of money that we will have to spend that our friends without children do not have to cope with. If we decide to educate our children privately you can add another £3,000 or more a year each, and then when they get to university the costs continue: it's enough to make you want to weep!

How can we ever afford it?

What can you do to help cover these costs? Well, I am sure that if you pop over to the excellent Living Below Your Means discussion board you will find many Fools with great ideas on how you can cut the costs of bringing up your children, but here are some of my tips:

• Work out your budget, look at what you are spending money on, and see if you can cut anything back; don't waste money on non-essentials.
  
  
• If you smoke, give it up; having a child is a great motivator to stop smoking. You should not be doing it around your child as smoking has been shown to increase the incidence of cot death, and cutting it out will put money into your pocket immediately.
  
  
• Did you know that it costs £1,000 per year to use disposable nappies? According to the Real Nappy Association it costs £400 if you use washable ones. This includes all the associated costs such as wear and tear on your washing machine. Mind you, the thought of washing dirty nappies is a bit frightening: maybe you should just stick to disposables, despite all the stuff about nappies filling up our landfill sites. We are having twins: I know it will be twice the cost, but disposables are just so much easier!
  
  
• Make sure that you claim all of the benefits that are due to you! If you need more information on benefits either call your nearest social security office or go to the Benefits Agency website. If you are female, claim your maternity pay if you are eligible. NHS prescriptions are free while you are pregnant and for 12 months after you have given birth. Your child gets free prescriptions until age 16. You can also get free NHS dental care if you are pregnant or you have given birth within the last 12 months.
  
  
• Claim your child benefit. At the moment this is £15 a week for your first child. For other children you get £10 a week per child.

I am sure that there are many more tips that could be added; maybe we should start compiling a list on the newly opened Foolish Family Finance discussion board, opened at the request of Ockham, who is also expecting his first child soon. But, for all of our excited parents-to-be, now is a good time to overhaul your financial position and become even more Foolish than you are now. Have another look at the Ten Steps To Investing Foolishly: have you paid off your credit card? Do you know where you spend your money?

Finally, all you parents and prospective parents, do you want to make your child a millionaire? Of course you do! The next Fool Book, by Alan Oscroft and due to be published on 22nd September, will show you how. You can pre-order it here. Also, have a look at our Fool's Guide to Investing for Children and join the rest of us Family Fools on the discussion board