How to cut the cost of having a baby

Updated on 05 September 2014

Having a baby can cost a small fortune. Here's how to keep your costs down - and set your baby up, financially, for life!

Make the most of benefits

1) Claim Child Benefit
You can currently claim Child Benefit as soon as your baby is born - just fill in this form.

You'll get £20.50 a week for your eldest/only child, and an extra £13.55 for any additional children. However, if one of your family earns £50,000 a year or more, you will no longer be eligible for these payments.

You can get a claim backdated but only for three months.

2) Claim Tax Credits
When you have a baby, you may be able to claim Tax Credits.

How much of a credit you can claim obviously depends on your circumstances, and it’s worth having a little play with the HMRC Tax Credit tool to see if you qualify, and how much for.

As a rough rule of thumb, you might not get Child Tax Credit if your yearly income is more than £26,000 and you have one child, or you have two children and your income is more than £32,200. But if you have more than two children, pay for childcare or you or your children has a disability, you may be eligible.

The basic amount is up to £545 a year.

You can get extra Tax Credits to help pay for childcare if you qualify for Working Tax Credit and use an approved childcare provider.

You can get up to £122.50 a week for one child and up to £210 a week for two or more children.

If you get childcare vouchers from your employer, this can affect the amount of Tax Credits you'll receive.

Use HMRC's Better Off calculator to see if you'll be better off using childcare vouchers or claiming Tax Credits.

Save money on baby essentials

1) Get free baby equipment
Friends and family are obviously a fabulous resource for outgrown baby things. Don't be afraid to make use of social networks like Facebook and Twitter when appealing for baby stuff, too!

Freecycle and Freegle list items people no longer need and are happy to give away for free to a good home.

Baby items in perfect condition often come up, so it's well worth joining your local group. If you're on a low income, you may also be able to get help from the charity Care Confidential. Here's a list of centres offering free clothes and baby equipment.

From recipes to rhymetime sessions, we also have a list of regularly-updated freebies out there in our article Fabulous baby freebies.

2) Get the best deal when buying new
If you're buying baby stuff new (which in most cases, isn't necessary) always use a product comparison site such as Kelkoo and PriceRunner to shop around.

Good old Which? magazine has loads of tips and reviews on buying new baby products.

And make sure you read our weekly round-up of Mother, baby & kids bargains, discounts and money saving offers.

3) Find second-hand baby gear
Ask nicely in charity shops and the assistants may agree to put aside relevant stuff as it comes in - so you'll have a whole bag of baby clothes to choose from the next time you visit.

The National Childbirth Trust runs hundreds of nearly-new sales every year, all over the UK. Find your local sale here.

Don't forget eBay, eBid and other auction sites. And the ‘baby and kids' section of Gumtree is also worth a look.

4) Don't get carried away
Try not to buy tonnes of baby clothes and equipment straightaway. You'll probably be given lots of gifts by family and friends, and end up with two or three of everything!

If you're happy to be given used baby clothes and equipment, make sure you let people know. If you don't, people may assume you don't want their 'cast-offs'.

5) Choose your nappies carefully
‘Traditional’ nappies are, generally speaking, cheaper in the long-term than their disposable equivalents. Estimates suggest you could save up to £600 using them on your first child – and even more if you use the same ones for your other children.

With that in mind, it's worth checking out Babykind's trial offer for washable nappies, and investigating whether your local council offers any kind of incentive scheme for reusable nappies.

If you go for disposable, try out some different varieties. You may find that the cheaper versions are just as absorbent as the bigger, more expensive brands. 

6) Check out your nearest toy library
Toy libraries let you borrow all sorts of toys for a minimal charge - sometimes even for free. And they’re a great way of finding out what toys your child likes before buying them yourself. 

7) Sell it on
Of course, you could make a bit of money back by selling your child's clothes, toys and equipment when you no longer need them. So try using websites such as eBay or eBid to get you started. 

Use the internet

Web forums are a massive online meeting place for mums - they're a great place to meet other mums (and dads) who've done it all before, and know the best place to find a bargain, as well as how to deal with a crying baby at 4am.

Netmums and Mumsnet both have good money-saving forums. You’ll find reviews of baby equipment and advice covering every stage of your pregnancy. There are also forums covering everything from the breast/bottle feeding debate to childbirth and baby names.

Also great are BabyAndBump's forums on shopping and freebies.

So if you have a baby question you need answered, these websites are an excellent place to start!

Save on childcare

1) Get childcare vouchers
These are part of a government scheme which can save each working parent over £1,000 in childcare costs every year. In a nutshell, the scheme allows parents to sacrifice some of their gross (pre-tax) salary in return for vouchers which can be put towards the cost of childcare. Both parents are allowed to get a maximum of £243 worth of vouchers every month, although if you register now that amount is only £124 a month for a higher-rate taxpayer.

Find out if your employer has a scheme. If not, ask them if they would consider setting one up. Just bear in mind that if you claim Tax Credits, childcare vouchers could affect the amount you receive. You can use HMRC's Better Off calculator to see if you'll be better off using childcare vouchers or claiming Tax Credits.

2) Join a babysitting circle
A good way to save money on childcare is to set up or join a babysitting circle with friends who also have young children.

By trading babysitting duties with each other, you could save £20 or £30 every time you want a night out.

3) Get grandparents involved
An increasing number of grandparents are now looking after their grandchildren while parents are at work. It's not always a practical solution for everyone, but if you can get them to help out, even for just a few hours here and there, it can make a big difference. And they get to spend quality time with their grandchildren.

Get the best savings rate

Children cost money, so your best tip is to start saving now – and that means getting the best rate, to make the most of your money.

If you're a taxpayer, the best option is to open an instant-access Cash ISA. That way, you'll earn interest, tax-free, up to a limit of £5,640 in the current tax year.

It's also worth considering a regular savings account. These are special types of savings accounts where you are rewarded with a higher rate of interest if you make a deposit into the account every month. It's a great way to save regularly, but there are some catches.

For example, you may find that you have to commit to saving every month for a year. This may be difficult to do once the baby arrives. Mind you, the minimum payment on some regular savings accounts is just £10, so you may still find it's do-able.

Alternatively, if that doesn't appeal to you, then go for the best instant access savings account. Instant access is important because it means you can withdraw your money quickly and easily when the baby arrives.

So watch out for accounts which claim to be easy access and yet in reality impose restrictions on you, so that – for example – you are penalised if you make a withdrawal or are only allowed three or four withdrawals a year.

The best instant access account offer penalty-free withdrawals, with no loss of interest, at any time, all through the year.

Finally, if you are struggling to save, and need a few hints and tips on how to get into the habit or what to cut back to give you that extra bit of cash each month, why not ask a question using our Q&A tool? You may find that other members of have experiences they can share which will help you.


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