Whilst undoubtedly a bundle of joy, babies also require a bundle of cash. Common purchases before the arrival of a baby include a buggy, car seat and clothes which cost expectant parents an average of £2,700 before their child's first birthday. And to fund this extra expense, it should come as no surprise that new parents are increasingly borrowing money to help meet these costs.
This endlessly-growing list of baby essentials doesn't stop, and in the years that follow several other costs amount, such as the move to a larger property which can accommodate an ever expanding brood; the purchase of a family car, and child-proofing the house; all of which contribute towards the need to borrow money.
In the last five years alone, expectant parents have borrowed over £2.32 billion in loans to prepare for their new arrivals - that's nearly the equivalent of Donald Trumps' net worth.
When you look at the actual individual loans, the figure fluctuates as parents' choices impact their levels of expense. Mums that choose to breastfeed for instance, save approximately £285 in the first sixth months. And whilst the temptation to lavish a new born with the best of everything is indeed great, opting to accept the offers of hand-me-downs is also a big cost-cutter. Nonetheless, there is no getting around the fact that a new baby is going to be expensive and will continue to cost money.
With rising household costs and government cutbacks, many families have had a tough year. UK wide, parents-to-be are now up to £1,800 worse off than they were last year, so it is understandable that some families need an extra financial boost to be able to welcome their new addition to the world.
We've seen an increase in the amount our members are borrowing, but although the amount we're lending has increased, consumers are continuing to adopt a cautious approach to borrowing through unsecured lending such as loans.
With the instability of the current economic climate, this cautious approach may well be due to the fact that many Brits face uncertainty as to how long it will be until they are required to borrow again. With the average cost of raising a child until they are 21 now hitting almost £210,000, with the added burden of increased tuition fees, the need for parents to borrow for their children's future is becoming increasingly common.
Most of our family members see borrowing in the short term a necessary investment in their child's long term future, which may account for the £9million increase in loans we have seen in the last year.
But expectant parents need not despair. There are small changes you can make which help to cut back the costs. Preparation is also the key to keeping finances in check. Buying items in the sale which you may need later is always a good way to minimize spending and use comparison sites and cash back sites to maximise savings on essential purchases. And remember, it's never too early to start a savings account for your new arrival. Saving just £20 a month in an account like our junior savings account will build up a nice nest egg of over £4,000 for when your bundle of joy turns 18.
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