How to budget for your child

Estimates put the cost of raising a child from birth through secondary school at 250,000-300,000 euros. This huge sum of money includes food and housing, childcare, education (excluding university), holidays, presents, doctor’s bills and all of the other expenses that crop up along the way. Another study by the charity Barnardos found that the cost of bringing up a child rose from €42 per week in 1992 to €64 per in 2009. And a specialist study in 2010 estimated that parents need to save €70,000 for education fees alone (including college). All of the studies agree that the biggest costs are childcare and education. So if you want to send your child to college, start saving now!

Faced with these scary figures, it really pays to be money savvy. The first step is to claim all your entitlements, including child benefit. Further benefits are available to parents who are unemployed or on low incomes (the family income supplement, the one parent supplement and a back-to-school clothing and shoe allowance). Free childcare might be available for children from lower-income families, too.

There are no tax credits on childcare expenses at the moment, but if you have a big mortgage and a long commute to work, it’s recommended that you to keep receipts for any childcare expenses and travel costs incurred as you might may qualify for a means-tested GP visit card. If you are unsure of what you are entitled to, contact your local HSE office.

Money-saving tips for parents

Once you have sorted out your personal finances and claimed your entitlements, there are other things you can do to make your euro’s go further. Our top tips include:

• List your first year’s costs and then see if there are ways to save money, for instance by borrowing baby basics, asking friends and relative to babysit (or set up a babysitting circle with other mums) and signing up to swap sites and Freecycle, where you can get items for free and pass on items your baby has outgrown. Also keep a beady eye on any shop or online promotion and scour sales for expensive items your baby will need in the following months or even next year (such as a winter coat, the next stage car seat, a highchair...). Find out if any church or charity sales are going on in your community - there are bound to be stalls selling toys and children’s clothes. Also if somebody wants to buy a present for your baby and is open to suggestions, ask for something you really need.
• Many baby items have a short life span, so buying them second hand (through jumble sales, newspaper ads or ebay.ie) makes sense. These include the baby bath, bouncer, toys, clothes, cot (it’s best to buy a new mattress for hygiene reasons), high chair, baby monitor, play pen, stair gates and so on. It is recommended that you do not buy a secondhand car seat on-line or at a jumble sale. You cannot be sure that it has not been involved in an accident and its safety may be compromised. Of course, accepting a secondhand seat from a family member or friend is fine as they can let you know that it is perfectly safe to use. Of course, all new parents like to buy some new items for their baby, but do shop around and avoid designer brands and designer prices – your baby will not notice any difference!
• Your utility bills (electricity and gas) are going to rise as you will be spending more time at home and less time out socialising, will be doing more laundry, cook more, use the dishwasher more – so switching to a cheaper utility provider is a sensible measure. Shop around for other costs, such as home insurance, car insurance and any other household expense.
• Your shopping bills will raise too - just think of the cost of nappies! Try to shop around and take into account supermarket promotions.
• If you are having more children, take this into account now – it’s true you can pass on a lot of stuff to the new arrival but you might need a bigger house and any childcare or education costs will be doubled. Some mums find they can’t go back to work after having another child - paying for full-time nursery fees for two children might amount to more than they can earn.
• If your maths are a bit shaky, consider using a baby budget planner. The National Consumer Agency (NCA) has one on its personal finance website (www.itsyourmoney.ie). This is especially important for first-time parents as they may feel more pressure buy the best of everything for their baby, while more experienced parents budget for basics first and keep some contingency money stashed away in case they need to buy more equipment or meet unforeseen expenses. Financial tips for parents are also included to fit all budgets.