Budgeting for Baby

When you find out you're expecting a baby you will be aware that your life will never be the same again, but you may not anticipate just how quickly you will feel the effects on your pocket.

Halifax, UK savings provider, has examined the early costs of pregnancy and preparing for a new baby and estimates that new parents will be at least £1,600 out of pocket.

Even when baby is a mere twinkle in its parent's eye, the costs begin to mount up. Pregnancy tests, for example, cost around £8 and ovulation tests around £15.99. A home fertility kit will cost around £60 and investing in a pregnancy book to guide you through the process can add £17. As a couple in their twenties takes an average of five months to conceive, these costs could add up to around £150 in total.

Maternity clothes can also add significantly to these early costs with mums-to-be needing to spend around £240 to kit themselves out with essentials including jeans, trousers, tops, a skirt or dress and maternity bra.

Parents wishing to prepare for childbirth and parenting often also choose to attend private antenatal classes in addition to those provided by the NHS. NCT (National Childbirth Trust) courses cost around £100 for up to eight sessions – depending upon where you attend.

If you opt for private healthcare maternity services as well, the costs of childbirth can really shoot up. Hiring the services of private mid-wife will set you back around £4,000 to £5,000, whilst a private birth at a hospital such as the Portland Hospital in London would cost in the region of £7,500 to £10,000.

The initial short term cost of preparing for the arrival of a new baby and buying cots, toys, baby clothes and baby accessories is just over £1,000. And this does not take into consideration the cost of any material changes that have been carried out in the nursery or around the house, moving house or upgrading the property and buying or upgrading to a family sized car.

Mike Regnier, head of savings at Halifax, says: "You may think that all the major costs involved with bringing up children are in the distant future. However, a significant outlay is required even before your new addition to the family makes his or her arrival. For many, the run up to a baby can signal a shopping frenzy, be it for cots, toys or just baby clothes."

The most popular way to save is to set up a regular direct debit into a Halifax savings product just after you are paid. This way you will be less likely to notice the sums going out and will become accustomed to managing on the income you have left for the rest of the month:

Halifax's Regular Saver - Halifax's Regular Saver account offers a fixed rate of 7.00% AER/gross p.a to customers who save a set amount every month between £25 and £250 per month. This account enables you to save for a year to prepare for the arrival of a baby or for future purchases at a later date.