Are kids a luxury? The abundance of studies calculating the growing cost of bringing up kids would suggest so. The most recent Cost of a Child report put the amount of raising a child in the UK at £227,266 over the first 21 years. And that doesn't even include private school fees.
We've looked at the rising cost over the first 21 years, from putting children in nappies through to university, when to expect to pay out - and how to prep for it.
Parents now spend more than a quarter (28%) of their income on their offspring, according to the annual Cost of a Child study, which was carried out by the Centre of Economic and Business Research for the insurer LV=. The cost of raising a child until the age of 21 has soared by 62% in cash terms since 2003, while the cost of a baby's first year went up by 50% to £11,025 in 2013.
Education accounts for the lion's share of the total cost (£73,803 in 2013), driven by rising university fees, followed by childcare and babysitting (£66,113). Food is next (£19,804), then clothes (£10,935), holidays (£16,506) and hobbies (£9,433). Pocket money adds up to £4,553 and furniture will cost £3,453, on average. Click here for a detailed table.
Apparently, boys are more expensive to raise – up to £12,000 more – than girls because of their rough and tumble lifestyles. A report from Halifax Bank pointed to extra school uniforms and even furniture being needed for boys as well as more sports kit. Oh and boys also get more pocket money than girls! The gender pay gap starts young.
The first year
The first big payout comes even before the baby is born. Baby clothes, nappies, a cot, pram/buggy and maybe a car seat are all essentials that you can't do without.
You could easily spend hundreds or even thousands of pounds on kitting out your baby, but there are ways of doing it more cheaply.
One option is to get hand-me-downs from friends and family and free stuff on Freecycle (where you can pick up cots, clothes and other gear if you are quick). For clothes, toys and other baby items, head to charity shops and secondhand sales (for example NCT nearly-new sales), or try Gumtree and eBay.
Exceptions are mattresses, which should be bought new, and car seats: do not buy them secondhand unless you are absolutely sure that they haven't been in an accident or dropped, which could cause dangerous hairline fractures. Test drive a pushchair before you buy; look at the weight and test how easy it is to fold if you use public transport a lot.
Cloth nappies are cheaper than disposable ones over time, although the upfront investment and the inconvenience may put you off. At mealtimes, use washable flannels rather than disposable wipes. Look out for freebies and money-off vouchers from places like Sainsbury's Little Ones club or Boots Parenting Club (which offers a free change bag with certain baby items). It's cheaper to make your own food and freeze it in small portions than to buy readymade baby food. Head to your local library to borrow kids' books, music and films for free. Local childrens' centres provide free playgroups and other activities such as music and rhyme sessions and baby massage.
When mums (and occasionally dads) go back to work, childcare is the next big expense. A full-time nursery place typically costs £177 a week for a child under two, according to the Babycentre. But in some areas, such as inner London, it's a lot more than that. The Daycare Centre has calculated the average cost of a nursery place for a child under two at £4.26 per hour across Britain, amounting to an annual bill of £11,000. In London, it's nearly £14,000. Ouch.
Childminders charge £3.84 per child per hour on average, the Babycentre says. The Daycare Trust puts the cost at £3.93 an hour. At least you won't have to pay any tax on top of that, because childminders are self-employed. A nanny tends to be the most expensive childcare option (unless you have two or more children). Hiring a nanny means you become an employer, so you will have to pay tax and national insurance for him or her.
An au pair might be the cheapest option – if you have room for them in your home. Apart from putting them up and feeding them, you only pay them pocket money. The Babycentre says you'll need to pay a minimum of £65 a week if they work 25 hours. For 30 hours a week this rises to at least £80.
Some people are very lucky and get free childcare when relatives (usually grannies) help out. You could offer to pay them, or at the very least cover their expenses.
Childcare vouchers can save many parents thousands in tax every year. Check if you are entitled to extra tax credits to help with childcare costs, if you are working. Moneysavingexpert.com has a five-minute child benefits check-up. Your local childrens' centre may also offer free advice on what you are entitled to.
When your child turns three, it gets a bit easier. All three- and four-year-olds in England are entitled to 15 hours of free childcare each week for 38 weeks of the year. Some two-year-olds are also eligible if parents are on benefits. See the government's website for more details.
The good news is that when your children turn five, schooling is free. (That is unless you aspire to send them to an expensive private school. The CEBR says this adds an extra £117,357 on average for a day school, or £215,853 for a boarding school.) At both state and private schools, there is the cost of school uniforms, textbooks, lunches and trips to pay for.
Moneysavingexpert.com has compiled a list of places that sell the cheapest school uniforms, such as Asda from £7.50 or Tesco from £8. Amazon has a marketplace for new and used textbooks and rentals. And from September, the government will fund free school meals for every infant (in the first three years of primary school).
The bad news is that you will probably still need extra childcare. The Daycare Trust reckons that parents fork out nearly £4,000 a year for two children to be looked after before and after school. Childminders who pick up children after school charge £72.78 a week, on average.
Childcare for older children has seen the biggest cost hikes, with 15 hours at an after-school club costing £49.67, up 9%. It is also the hardest to find.
As they get older, take your kids to museums and other free activities. Look online for ideas. For example, VisitBritain has a list of top ten family days out for under £15 across Britain. Time Out has this Days out for kids page (near London). Moneysavingexpert.com has a Cheap Days Out page. There are also free sports activities during school holidays.
Family holidays are more expensive now because you have to go during school holidays. A typical family holiday in Florida, including flights, cost almost £3,000 last year, according to the Daycare Trust. If you can't afford this, it's time for a staycation or a cheap break in Europe. Knock money off transport costs in Britain with a family rail card.
It gets even worse. You will need to put some savings aside over the years (for example, through a junior ISA and/or a child savings account) to support your child through university.
University fees have risen exponentially in recent years. In 2006, the government allowed universities to charge up to £3,000 a year. That figure rose with inflation each year, before being hiked to £9,000. But by all accounts this is not putting young people off. The number of new undergraduates reached record levels (nearly half a million) last year. Here's a guide to student finance, jobs and travel.
It doesn't necessarily stop after your kids turn 21. A record number of young adults are still living at home because they can't afford to live on their own. The Office for National Statistics says 3.3 million 20- to 34-year-olds lived with their parents in 2013. High youth unemployment, soaring rents and stricter mortgage criteria mean that they could be stuck at home for years to come. But at least you won't suffer from empty nest syndrome.