Baby on a Budget
Wednesday, 21 April 2010 11:57
There are a number of ways you can actually claim a bit of extra cash to help raise your child if you know where to look. Myfinances.co.uk Kate Saines offers some tips to ensure parents-to-be are not out of pocket (by too much) when their baby arrives.
Having a baby is a very expensive business indeed.
Your bundle of joy might be tiny in size, but in terms of how much it's going to cost you, there's nothing small about the figure.
A survey by a social networking website for mums, Gurgle.com, found the average cost of a baby in its first year is an almost-as-painful-as-childbirth £18,000.
In the first three years, expect your child to set you back an average of £27,000.
Indeed when your newborn arrives in this world, it is normal to spend an average of £3,383 kitting out the nursery according to the website. And an additional £605 is the average spent on prams and car seats.
This means the average parent is looking at spending at least £4,000 in preparation for their arrival.
It's no surprise then that Gurgle.com found many parents, bruised financially by the recession, are starting to implement drastic cost-saving measures in a bid to bring down their baby budget.
While this might sound a dramatic step, it really is not that hard to cut your spending on baby paraphernalia. And there are also a number of ways you can actually claim a bit of extra cash to help with the hardship.
Preparing for pregnancy
Believe it or not, just thinking about becoming pregnant can set you back a few hundred pounds. According to Gurgle.com an average of £311 is spent just trying to conceive.
Ovulation predictor kits, pregnancy testers and folic acid are top of the list of culprits, according to a survey conducted by Halifax in 2007.
However, you can buy cheaper alternatives by shopping at online.
A Clearblue pregnancy test will cost you £11.45 at Boots, but is available for between £4 and £6 on Ebay.
Meanwhile, an Ovulation kit costing £29.99 on the high street, will cost £10 on the website. Simply by shopping on Ebay you could save yourself around £25.
If you need some financial support to boost your diet and fitness at this all-important time, the government now offers mums-to-be a health in pregnancy grant. This is universal and every single woman who becomes pregnant can apply for this on their 25th week of pregnancy.
It's a one-off tax-free payment of £190 and is designed to help you prepare for the birth of the baby. So it could cover the costs of some of the extra fruit, vegetables and vitamins you have bought to boost your health.
Mums-to-be
Once you fall pregnant the costs really start mounting up. Gurgle.com said an average of £91.11 is spent on maternity wear. But specialist ante-natal or parenting classes as well as pregnancy exercise classes can push costs up.
The National Childbirth Trust's ante-natal classes cost between £5 and £18 per hour, depending on what the class covers.
We looked up the local classes in our area and found they would set us back £154 if we attended the full 18-hour course.
As a cheaper alternative, the NHS runs shorter ante-natal classes for free.
The NHS also provides free prescriptions and dental care for pregnant women, which continues 12 months after their baby is born. It is well worth taking advantage of the these as they can save you a lot of money, especially if you need expensive dental work done.
Exercise classes can also cost anywhere from £5 to £10 a session. But buying a fitness DVD for pregnancy could be a cheaper option in the long run.
You can also save some of those all-important pounds by borrowing maternity clothes from friends who have been pregnant.
For the Baby
Putting aside savings for the arrival of a child is a great way to prepare for the financial shock, but if you cannot afford to save or did not plan to have a baby so soon you will not be able to benefit from this luxury.
With statistics showing the costs can mount up to a whopping £4,000, this really is the area where you can make massive savings.
The National Childbirth Trust (NCT) informed us it holds regular Nearly New Sales across the UK at thousands of locations.
Here you can find everything from toys and baby clothes to cots and prams at bargain prices. They are sold by parents who no longer need the goods.
The average pram can cost anything from £100 up to £700. But people can pick one up second hand at these sales for less than £100.
You can find out the times and locations of the sales nearest to you by visiting the NCT's website.
Many parents also rely on hand-me-downs from friends and family as a cheap way of preparing for their baby.
And you can also seek help from the state to fund any purchases you need to make. If you, or your partner, claim benefits, such as income support, income-based jobseeker's allowance or certain tax credits, you will be entitled to a Sure Start Maternity Grant, which is worth £500.
According to a spokesperson for Child Poverty Action, there are also rules regarding qualification of income support and employment support allowance which mean expectant mothers do not have to be actively jobseeking in the final weeks of pregnancy to receive out of work benefits.
And child trust fund provider The Children's Mutual says women who are on these benefits can also receive financial help with travel costs to and from hospital for NHS treatment and to obtain free vitamins.
Healthy Start Vouchers worth £3 a week are also available and continue, at £6 a week, after your child is born.
Although these are all available for families with household incomes below a certain level, and for those on certain benefits, it is worth finding out if you are eligible. Making sure you are claiming everything you are entitled to will certainly help ease the financial strain.
After your baby is born - Claiming Benefits and Tax Credits
Once your baby is born, there are a variety of tax credits and benefits you can claim. Child Tax Credits and Working Tax Credits are the two most common.
According to the Institute of Chartered Accountants in England and Wales (ICAEW), the former pays up to £2,300 a year per child. And you will also get twice the family element - which amounts to £545, during your baby's first year.
Working Tax Credits can be claimed to help with the cost of childcare when both partners are working. The ICAEW said this can be worth up to £140 a week for one child or £240 for two or more children.
Jane Moore, technical director at the ICAEW's tax faculty, says: "To get childcare support in Working Tax Credit, you need to be working, or both of you working if you are a couple.
"But you or your partner can carry on claiming Working Tax Credit when you take time off from work for maternity, paternity or adoption leave provided your usual working hours were at least 16 hours a week before you went on leave and depending on the length of time you are off work."
Currently families with incomes of up to £66,000 per year are entitled to some tax credits.
The actual amount you will receive is based on yours and your partner's income.
All families receive child benefit once their children arrive. This is £20 a week for the first child and £13.20 a week for subsequent eligible children.
And, at present, all newborns receive £250 from the government to start a Child Trust Fund.
It's also worth remembering, said the ICAEW, that maternity pay is taxable - as is paternity and adoption pay - and your employer will deduct Pay as You Earn (PAYE) and National Insurance.
However, if your pay comes to an end during the tax year and you don't return to work before the next April 6th you might end up having too much tax deducted. So make sure you claim a refund.
Special offers and freebies
There are also plenty of discounts, vouchers and money-saving schemes you can take advantage of if you really want to save the pennies.
Stores such as Boots run baby clubs which can provide you with vouchers and discounts, as can organisations like Bounty. You are likely to be bombarded with freebies via organisations such as these when your baby arrives, so make the most of them.
There are also a variety of initiatives which encourage 'savvy spending' to benefit you and your child financially.
The Children's Mutual, a child trust fund provider, has such a scheme which allows parents to earn over £200 by kitting out their babies' nurseries using its online shopping portal.
The idea is that parents do their 'baby shopping' through the 1,000 retailers, including Boots, Mothercare and John Lewis, who are linked up to the ctfcashback website.
But as they shop, they earn a certain percentage of cashback, which gets paid into a bank account or savings account for their child.
Tony Anderson, marketing director at The Children's Mutual, says: "When questioning expectant and new parents through our monthly poll, nearly 90% suggested they would like to receive 'money back' for their nursery shopping.
"We have taken this one step further so, whether it's buying baby grows and nappies or school uniforms and family holidays we wanted cash-strapped parents to be earning money every time they spend online."
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