The Costs of Raising a Child

Sunday, November 18, 2012

The Costs of Raising a Child

Many future parents have difficulties understanding the costs of raising a child. The sum tends to be significant, especially if you take into consideration all the factors a child needs and hidden expenses.

A recent study shows that the costs of raising a child are increasing steadily. Do you know what you will have to pay for and invest in for the success, happiness and financial stability of your child in the future?

Child Raising Costs: An Overview

According to the 2012 statistics, the cost of raising a child from birth to the 21st birthday is 218,000 pounds. The figure has increased by three percent since the previous edition of the survey.

Some of the biggest expenses connected to raising a child include education and childcare.

The financial crisis has affected many parents and their ability to spend as much as they want on their children. Approximately 76 percent of the individuals questioned saying that they had to cut back on particular aspects of childcare. In order to minimize expenditure, 67 percent of the parents say that they are looking for supermarket store promotions on a weekly basis.

Criteria Used to Estimate the Cost of Childcare

Estimating the cost of childcare can be a challenging task because each family has its specific requirements and understanding of necessities. When such figures are being calculated, several elements are taken into consideration.

The estimates include the price of a nursery from the time the child is six months old to the time the 5th birthday is reached. Most parents start using nursery services during that period, in order to be capable of going back to work.

Additionally, the estimates take into account the cost of school, annual holidays, three-year university tuition, toys, toiletries, food, clothes, baby sitting and driving lessons. Some surveys may take into account additional expenses but these are considered the basics for every family, regardless of social status and income.

How much does Each Childcare Aspect Cost?

As already mentioned, the costs of childcare and education tend to be the most significant ones and they are on the rise. Childcare and babysitting is estimated to cost on the average 62,099 pounds per family, Education is slightly more expensive with a total of 71,780 pounds.

Food, holiday expenses and clothing follow in the estimate. The price of providing a child with food from birth to the age of 21 is 18,667 pounds. Holiday expenses and clothing follow with 15,532 and 10,781 pounds respectively.

Hobbies and toys are worth nearly 9,500 pounds and the amount of pocket money an average child receives while living with parents totals 4,337 pounds.

Economists conclude that the cost of raising a child under the age of 11 has increased nearly 15 percent over the past few years. As a result, families need to do some serious financial planning before taking the decision to have a baby.

Financial planning for childcare involves income calculations, finding a second or a passive source of income and weighing the expected childcare costs against the expected outcome. Although, it sounds complicated and many parents think that such preliminary calculations are taking the preparations a step too far, financial planning can ensure a happy childhood and successful future for a young individual.

Author’s Bio:

Nick is a content writer at Forths Forensic Accountants and he writes on different finance or legal topics. Follow Nick on twitter @NickNikanderson.

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