Having a child has always been a financial decision as much as an emotional one but, today, money worries appear to be the primary reason that people are rethinking the size of their families.
A recent survey by the United Nations Population Fund found that 39 per cent of people globally had had – or intended to have – fewer kids than originally hoped for due to financial limitations.
And, narrowing the focus to the UK, a YouGov survey published in March of this year found that added expenses was the ‘most common main reason for preferring to stay childless’ among Britons.
While having a baby undoubtedly comes with significant cost, it is possible to financially prepare for parenthood.
The first step, however, is not to hurriedly commit to one savings plan or another but for partners to understand each other’s financial habits.
‘Talking about money before kids might not feel romantic, but it’s more useful than daydreaming over baby names,’ Vix Leyton, a consumer expert at thinkmoney, said.
‘Couples who look aligned on paper, for example, similar salaries, saving regularly, and pension savvy, can still have blind spots once the spend gets emotional.’
Vix also pointed out that it’s ‘about values, not just budgets’ when a couple comes to assessing its financial readiness for children.
Today, money worries appear to be the primary reason that people are rethinking the size of their families
So, as much as it’s necessary to clarify practical matters, such as both partners’ maternity and paternity policies at work, it’s equally important to delve into each others’ general attitudes to money, which were likely formed during childhood.
‘Talking about where your approach to money came from and how your habits were formed can really help your partner understand your money personality,’ Susan Hope, from Scottish Widows, said. ‘It also opens up the conversation about habits you might want to work on together.’
With all of that in mind, the Daily Mail spoke to a number of financial experts about the questions, both profound and practical, to raise with your partner before taking the leap into parenthood.
1. What are your long-term financial priorities?
For Sophie Graham, a personal finance expert at Sunny, it’s sensible for couples to be aligned on long-term financial goals before having children.
Whether it’s buying a bigger house or taking an early retirement, people’s financial priorities tend to inform their approaches to money in the present.
If two partners are at cross purposes when it comes to what they want to achieve financially, they’re going to find it difficult to agree on even the basics, such as what to spend and what to save each month.
It is, according to Sophie, helpful if both partners make these ‘essential decisions’ together before ‘money gets tighter’ and tensions rise with a new addition to the family.
2. What does ‘providing’ for a child mean to you?
‘One person’s perception of “providing” might be a private nursery and an Instagram-worthy pram while the other is happily eyeing second-hand everything,’ said consumer expert Vix Leyton. ‘The same goes for whether you’re expecting to bankroll milestones like university, first cars or even weddings.’
Equally, if one partner grew up assuming private school was the only route for potential offspring and the other believes it’s a waste of money, that’s ‘a serious divergence’.
As a major expense, whether a couple decides to spend money on school fees or not will greatly affect how much they can expect to spend on the family’s other financial needs and goals.
3. What are your non-negotiable expenses?
Rajan Lakhani, personal finance expert and Head of Money at smart money app Plum, pointed out that ‘becoming a parent often means adjusting your lifestyle’.
While that will generally require both partners to relinquish certain luxuries, parenthood need not mean ‘losing sight of your relationship or your own happiness.’
He advises couples who are expecting to agree on one activity that brings them both joy and carve out space for it in their budget.
‘Prioritising time together not only keeps your relationship strong but also reminds you that it’s alright to enjoy your money, even in this new chapter of life,’ Rajan said.
4. What are both employers’ maternity and paternity policies?
Financial experts tend to agree that understanding the specifics of both employers’ maternity and paternity policies is absolutely crucial before deciding to have children.
‘Before your baby arrives, it’s important to sit down together and assess whether maternity or paternity pay will be enough to cover your day-to-day expenses,’ said Rajan Lakhani.
Partners should know exactly how much maternity or paternity pay they’ll receive, work out how long it will last and whether it’s enough to cover living costs.
He added: ‘If your income during parental leave won’t be enough, aim to contribute jointly to a maternity/paternity fund.
‘Try to calculate how much time you want to take off and how much of that will be paid by your employer.
‘For example, if your take-home salary is £2,000 per month and your employer covers four fully paid months (£8,000), you’ll need around £16,000 extra to cover the remaining eight months. That means saving £8,000 each.’
5. How would you cope with financial curveballs?
‘It’s also worth planning for the unexpected,’ said Anna Murdock, Head of Wealth Planning at JM Finn. Part of that is putting a will in place early on, she explained.
And, since there are bound to be unexpected expenses as children grow up, whether a broken pushchair or a surprise school trip, it’s just as important to have an ’emergency fund’.
Fiona Peake, a personal finance expert at Ocean Finance, said: ‘An emergency fund gives you a cushion and stops you turning to credit cards at the first hurdle.
‘If you don’t have one yet, talk about how you’ll build it together.’