Money saving for new parents
A small bundle of joy, a lifetime of love, someone to care for you in your old age…but a new baby will be one of the most expensive investments you'll ever make. Of course, babies normally come free in the first place, but very soon the big expenses kick in.
The cost of raising a child is at an all-time high. It's estimated that parents who support their children all the way through from birth to graduation will pay almost as much per child as the price of a house.
Research for Liverpool Victoria Insurance found that the average outlay from 0 to 21 years has reached more than £222,000 which is up £82,000 on a decade ago.
And the insurer predicts that this sum could reach £350,000 in ten years' time if prices continue to grow at the same rate.
It's unlikely that Kate and William are fretting over these figures, but it's certainly a daunting thought for the average new parent.
So what can you do to stop the costs running away with you? The advice is to spend your money carefully and plan ahead.
Think before you spend
Tips from a thrifty mum
Catherine Harding is the mum of Laurence, 8, and Connie, 5.
"I saved about £500 by using washable nappies and hundreds more by breastfeeding both children.
"I try to buy second hand and also sell the stuff on afterwards - for example, I bought a lovely pram on the internet for £20 which I later sold for the same amount.
"You can get cheap toys at car boot sales and in charity shops. And babies are often just as happy playing with plastic bowls and spatulas from the kitchen.
"When we go out we take a picnic as cafes in parks and at children's attractions can be incredibly expensive.
"It's also about managing expectations. We went to a big children's exhibition and had a good look around the shop, then went home and bought the same things far cheaper online."
New mums and dads will find they're faced by a mind-boggling array of toys and equipment in the shops, claiming to help the baby's co-ordination or interactive development. There are the shiny all-terrain prams with pneumatic tyres that look more suited to a trek through the jungle than a trip to the park.
It's in the interest of the shops to convince you that you need these things. But just because it's on sale and it looks enticing, doesn't mean your baby will love you more for it. The advice from the parents' network, Mumsnet, is don't rush into making expensive decisions.
"For first time parents, it's almost impossible to predict which baby products will turn out to be essentials and which will gather dust in the cupboard," says Mumsnet co-founder Justine Roberts.
"One family will find that a multi-purpose travel system fits in perfectly with their needs; another may realise that all they need for transport is a sling. Just because something exists doesn't mean that anyone actually needs it."
Her advice is to wait until the baby is born to make decisions on major purchases and to take advice from other parents on how to get value for money.
Plan ahead for childcare
Even when those big investments on new baby equipment are taken care of, it doesn't get any cheaper. Going back to work brings new financial challenges.
Research for the Child Poverty Action Group estimates that the total cost of childcare per child can reach around £60,000 - and it says it's one of the main reasons for the above inflation rise in the cost of childhood.
Some employers offer flexible working opportunities which could mean you could opt to work part time or only during school hours, but you'll have to work out whether you can afford to take a pay cut.
Working parents will need to find money for the crèche fees, then, as the child gets older, the after school care. As the children look forward to their long summer holidays, you'll be working through the logistical nightmare of how to ensure they'll be looked after during those six weeks.
Jill Rutter from the Family and Childcare Trust says don't leave it all until the last minute. "When children reach school age, plan for the long school holidays well in advance.
"Holiday childcare can be expensive - our recent research shows that across Britain weekly costs per child have broken the £100 threshold - and it can also be difficult to find places on schemes in some areas."
She suggests looking for informal arrangements such as asking family to help out. Also think about sharing care with friends so that they have your children for a few days and then you look after theirs.
Put money aside
Some parents choose to save their child benefit and it may also be that grandparents want to set up a savings account for their grandchildren. Children often get money from friends and relatives as birthday presents and as they get older many have part-time jobs.
All too often this cash goes into a low interest savings account. You can get relatively good rates on children's savings so make sure you shop around for the best deals, and make sure you fill in the right form to avoid your child paying tax on the interest.
Sarah Pennells from the money website SavvyWoman says anyone can put money into a tax free account for a child and it's good for children to be able to watch their savings grow.
"It's such a good habit to get into," she says. "If you've got a bit of money like child benefit which you didn't have before, try to put it aside. For a child, learning to take an interest in saving is priceless."
Your child might choose to dip into this money to pay for some of those unexpected extra costs - for example, a school ski trip - but if he or she can manage to hold onto it a bit longer, it will be useful to help them through university or it can even be used towards a deposit on a house.
Five tips from the Family and Childcare Trust
1. Budget and plan your finances in advance of the birth as life gets really hectic afterwards
2. Childcare costs, location and working hours are ultimately the factors that determine your childcare choice if you want to return to work. Talk to your employer before you go off on leave to check if they give childcare vouchers (you can start claiming these as soon as your baby is born).
3. If you are on a lower income, you may wish to calculate your entitlement to childcare tax credits, which can be done through gov.uk. A parent buying 50 hours of childcare per week for a child under two would face an average annual bill of around £11,000 per year according to research by the Family and Childcare Trust, so it is really important that parents on lower incomes make use of the all the financial help available to them.
4. Dads should make the most of the paid parental leave they are entitled to, although many men don't take it.
5. Don't be pressured into buying too much baby equipment. See what your friends have got and ask them if they have actually used the equipment. Friends and family will often pass on clothes, toys and equipment.