The average baby costs £1,645 – here’s how a former schoolteacher and a factory worker budgeted for a baby

Mother holding baby with father and older child

According to an Aviva survey, parents spend £1,645 preparing for a new baby, so we spoke to two mothers about how they did it.

Here’s how that average cost played out for a schoolteacher and a factory manager.

By Remy Maisel

According to Clara Wilcox, Career & Return to Work Coach at The Balance Collective, having baby often strains parents’ finances. “Many have initially reduced income through parental leave from their employment or their business. This limits the amount of money available as a household,” she says.

A good example of this is mother of two, Mel. She’s been with her partner for 13 years and got married three years ago. They live in Maidstone, Kent. 

Mel used to be a teacher but had to give it up because of the level of stress she was under. “I had been told the stress could affect my fertility, so I stopped teaching,” Mel says. “So I’ve temped, mostly in retail.”

Mel’s children – her daughter, three and one-year-old son – were both planned, and she says they always ‘sort of’ talked about the childcare options. When the kids came along, they decided she would be the main carer while her partner worked full-time as a mechanic. “Obviously, my finances completely changed,” she says.

Where they stand financially

Mel and her family now have a household income of £32,000, made up only of her husband’s salary. A huge drop from their combined earnings of £52,000 before they had children. Asked how much the family has in savings, Mel says, “We don’t.” 

This is a reversal of her situation from when Mel worked full-time. When she left teaching in 2015, she earned £32,000 and her husband earned £20,000.

Two weeks after she left her teaching role, she discovered she was pregnant. She got £140 every two weeks in maternity allowance for her first baby, which is assessed on what your earnings are when you’re pregnant. This halved to just £35 a week for her second. 

When Mel was the breadwinner, she would pay large bills like rent and put money into the joint account, and her husband would contribute money for smaller bills. Now that he’s the higher earner, Mel only pays for her credit card and phone bill. 

Two periods of maternity leave have put a strain on their finances, and the couple has needed support from Mel’s mother and her husband’s parents to pay for food, as well as helping with childcare.

We don’t have the money to go out for dinner or go out to the cinema.

“My daughter only just got her 15 hours in September for childcare. We can only do this with support from the grandparents,” Mel says – this is how they manage when she temps in retail. “The other option would be to work Monday to Friday and pay for childcare. If I didn’t have the grandparent support, my entire day’s earnings would go to childcare.”

Mel credits the teaching career she had for being able to buy a property, as she and her husband do own their mortgaged home. However, she says, they have had to make real sacrifices in addition to accepting a lot of help from their parents. “I don’t get my hair cut. My mum has given me her clothes. For birthdays and Christmas, we ask for useful things. We don’t have the money to go out for dinner or go to the cinema.”

Talking about money

With money very tight, it’s necessary to budget carefully. “We do make decisions about money together. But I’m very lucky. I know it’s not like that in every relationship.” 

However, it does mean you have to have frank and uncomfortable conversations. “It’s not easy – it’s not. And actually, when I spoke to my husband about this, he said the hardest thing is talking about it.”

The credit trap

Mel says she and her husband used credit cards to pay for things they couldn’t afford when they had their first baby, which she feels was a mistake. “That was a big learning curve,” she says. After paring back costs as much as possible – they considered getting rid of one of their cars, too.

Mel's advice for new parents

Mel and her husband spent about £2,200 on buying things for the baby. 

“We were quite careful to just get what we needed. I spent two hours in Babies “R” Us testing travel systems – the pram, pushchair, and car seat – to see they all work together and were affordable.”

Mel has no regrets about taking time off work. In fact, she’s keen to stress that they’re in no way a burden – she considers them a joy. “Having children is the best thing I’ve ever done. When they’re older, I will be glad I was at home with them.”

As for what’s next, Mel doesn’t intend to return to teaching – she’s looking for something more flexible. Currently, she’s exploring opportunities within her network of friends.

“I have a ‘mum-to-mum’ network which is quite inspiring. There is another way besides full-time work. I won’t go back to teaching but I’m interested in things like mum and baby yoga, and Buggyfit.”

Mel also finds opportunities to make money by reselling pre-loved baby clothing. 

Her last piece of advice is to make sure you talk to your partner. 

Couple looking at their newborn baby

“I found things out about my husband’s finances that I didn’t know before I had children. If you have anything in your financial closet, come clean. It wasn’t anything too bad, but I could have done with knowing them before mat leave.”

Two working parents

Things have worked out differently for Shriya, who lives with a partner to whom she isn’t married, and their daughter, aged two, in a three-bed terrace. 

Shriya has a business degree, and currently co-manages a shift in a factory. She was previously a production planner and has worked in manufacturing since graduating in 2013. Her partner also works in manufacturing, and they met while working together – but they now work opposite shifts so they can care for their child and manage childcare costs.

“This has taken its toll on our relationship as we don't have any days off together unless we take annual leave. We managed it for a year but have now decided to put our daughter in nursery and take the hit on cost,” she says.

Though they didn’t plan to have their daughter, they knew they wanted a child at some point and would be able to swap shifts to manage childcare. “We are lucky to work for a company which is supportive of families.”

Joint finances

Shriya’s household income is around £65,000, with her earning more. “We currently don’t have any money in savings as we used our savings during my maternity leave,” she says.

Shriya and her partner have a joint account for rent and bills and pay for food, phones, their car, and other expenses from individual accounts. “Our savings will also be individual although I believe we would save much more if I was in charge of savings!” she says. 

It's taken its toll on our relationship as we don't have any days off together unless we take annual leave.

Maternity leave 

Shriya took a year off for maternity leave. She earned six weeks of full pay, though this would have been 18 if she had been with her employer for longer, and then was on statutory maternity pay (SMP) of £500 per month until it finished.

“I then used my annual leave that I had accrued while on maternity, which took my total leave to a year. We did consider shared parental leave but decided not to use it.” 

Like Mel and her husband, Shriya and her partner did turn to credit cards to cover some costs on maternity leave. “We spent £7,000 on an interest-free credit card to enable us to pay for our everyday expenses as we weren't earning enough through my partner's wage, plus SMP.

"We used some of this money towards a family holiday, for me to go to baby groups and have some sort of life whilst on maternity. We're still paying off the credit card now, a year after being back at work, but it's still in the interest-free period.”

Financial and career sacrifices

Although working opposite shifts has allowed Shriya and her partner to cover childcare, it has come at a cost. “Our current paid work arrangements have an impact on our career opportunities as there have been roles that I have wanted to apply for but haven't done so due to the requirement being to work Monday to Friday,” she says.

“I plan to change my career in the future as I’d like to continue to progress. I can't imagine doing the same role for the next 30 to 40 years. I would also like another child so would have to plan this accordingly too if I did have another.”

Shriya and her partner would also have liked to buy a house by now but haven’t been able to do so because of their current financial situation. But even more than the financial cost, there’s been an emotional cost. 

“The fact that we don't spend much time together has really taken its toll on our relationship,” she says. “We’ve had to make sacrifices on our social and personal life such as seeing friends as and when we want, going to the gym, as the one who isn't working will have our daughter.”

Like Mel, however, Shriya says she would encourage parents to take as much of the parental leave that they can afford to. “This time is precious, and it comes and goes so quickly. I took the full year and I can’t believe that my daughter is almost two. Before you know it, they'll be able to do everything for themselves! You have your entire life to work.”

Shriya’s advice for new parents

  • Save as much money as you can so that you aren’t sacrificing your lifestyle while on maternity/paternity leave
  • Work out who will pay for what and then budget for this and stick to it
  • Try to put even a little into savings each month, if you can, via standing order on payday. This way, you don't see it and leaves you with exactly what you’ve left to spend on other things
  • Once the baby arrives, make a spreadsheet of your exact costs, see if you can make any savings and then factor this into your budget. It's difficult to estimate what the baby will cost before you've had it as there are things that you may need but may not have thought of
  • Have all monthly expenses such as mortgage/rent and bills go into a joint account, which you send a set amount to each month
  • Factor in expenses for quality time together. It's easy to get lost in the baby's needs and put your own to one side. Happy parents, happy baby!