How to Plan for Childcare Costs

If you are about to take the plunge into parenthood, then you may well be aware of how expensive a child can be. In fact, it is estimated that raising a child from birth to the age of 21 will set you back around £231,843, which seems like an incredibly daunting figure.

Luckily, there are plenty of ways to plan ahead for the various costs of raising a child, and once you have the right measures in place, childcare should be a breeze. Here are some of the methods.

Budget

One of the most effective ways that you can plan ahead for the various costs you may encounter is to create a monthly budget, and set spending limits accordingly. These costs may include food, days out, toys, furniture, and anything else which your child may need. Be sure to take into account both variable costs, such as food, and non-variable costs, like nursery or playgroup fees.

As your child gets older it is likely that costs will go up, given that they will likely need more food, clothes and other necessities, so do your best to factor this in and keep your budget flexible.  

Emergency Fund

It is also worth preparing for the unexpected when planning your childcare costs, which means creating an emergency fund to help you deal with any significant, unexpected financial shocks which might arise.

This may be easier said than done, but putting some income aside in a savings account (or similar) each month could come in useful for things like unexpected dental surgery. If this is too much of a stretch, there are emergency loans available which could also be handy if you need to deal with unexpected costs.

Help from Government

It is also well worth looking into any help you may be able to get from the government, which could include childcare vouchers, tax credits and help with childcare. This can go an incredibly long way in helping you to significantly reduce costs, especially in the long run.

No matter which government scheme you end up using, be sure to factor it into your budget, as well as monitoring any changes to eligibility which may occur as your child grows up.

There is no doubt that raising a child is an expensive business, but it is also worthwhile and extremely rewarding. By planning ahead for the costs, you will take a lot of the stress away from childcare, and help to protect your family’s finances in the long run.

 * Collaborative post.