If you have a family, your purse or wallet is probably crying. Having children is a terrible investment. You fork out an estimated £200,000 per child by the time they reach age 21.
Of course, if you’re happy to be repaid in hugs, it’s all more than worth it. Yet a few tips to ease the burden never go amiss...
Are you missing £1,000s of childcare help?
There are two big ways you may be able to get cash if you pay for childcare.
First, do you work over 16 hours a week (you and your partner if you’re a couple) and earn under around £41,000 in total? If that’s you, check if you’re eligible for childcare tax credit. This can be serious money – many get over £3,000 a year. To find out if you’re due, call 0345 300 3900.
Alternatively, see if your employer offers childcare vouchers, which allow you to pay for childcare from your pre-tax income. The way this works is you give up, say, £2,000 a year of salary for £2,000 of vouchers. However, as after tax you’d only have got around £1,400 in your pay packet, it means you’re £600 better off.
“I saved £3,000 adding mum and dad to car insurance”
l Added to the fear of seeing your teenager on the road, the cost of insuring one to drive can be terrifying. One trick, if they’ve their own car, is to try adding extra drivers with good records (eg, mum and dad) who may occasionally use the car.
It’s trial and error, but can have a big impact, as it did for one of my Twitter followers who said: “As a new driver my insurance wanted £5,000.
“After adding mum and dad, it dropped to £1,900.”
However, you must never say someone’s the main driver when they’re not. That’s called fronting and it’s illegal.
What would happen to your kids if you died?
Sadly, one child in 30 loses a parent before finishing education, so it’s crucial to consider the financial impact if the worst happened. Consider cheap level term life insurance, so there is money there if needed. If you know what you’re doing, you can get policies far cheaper than direct through specialists such as www.cavendishonline.co.uk and www.moneyworld.com.
Unlike normal insurance brokers, these rebate much of their commission to you, which means you can pay many £1,000s less over the life of the policy.
Take your kids to TV shows for free
If your kids’ favourite sentence is “I’m booorrred”, you can get them out of the house without breaking the piggybank. TV shows need bums on their seats, so you can often apply online for free tickets at via sites like www.sroaudiences.com and www.applausestore.com.
Ensure you’re paying less for power
Lots of people in the house means big energy bills – more rooms, TVs on full blast, heating all that water – it all adds up.
Ensure you’re on the very cheapest deal. It only takes a few minutes. Just plug in where you live to an www.ofgem.gov.uk approved comparison site and it’ll find your cheapest.
Uncover 75 per cent+ discounts on kids’ togs in online outlets
l When it comes to kids’ clothes, the supermarkets often sell at rock bottom prices, but if they’re demanding brands or you fancy something a bit different, outlet stores can be the way forward.
It’s likely you’ll be thinking of outlets based in out-of-town centres where they sell last year’s lines at big discounts. Yet this trend has moved to the web with many stores offering their own internet-based outlets too (some of which are operated via eBay).
Some have their own websites, others do it via eBay. Examples include M&S (www.marksandspencer.com/outlet), Joules (http://www.ebay.co.uk/sch/joulesclothingoutlet) and Boden.
The top children’s savings account pays 6 per cent
Children’s savings aren’t immune to the drop in interest rates. Most pay very little, yet there is one that still keeps its head high. The branch-based Halifax Kids’ Regular Saver pays a huge 6 per cent AER fixed for a year, provided you lock cash away (not available in Scotland). As it’s a regular saver, you need to put £10 - £100 in a month.
If you want something with more freedom, the rates plummet. The best easy access kids’ savings account currently is again from Halifax, and is also available north of the border with Bank of Scotland. It pays 3 per cent on savings from £1 to £20,000.
Give pocket money as pay – otherwise you’re “trust fund teaching”
Pocket money’s under-rated as a way to teach kids core money lessons, provided you reward a work ethic, and don’t just dole it out. It teaches how to manage an income – by having a regular amount of money you start to learn the concept of saving versus spending.
It also incorporates “opportunity cost” - whether they’d be better off spending the same cash on something else. For a young child this is perhaps “do you want to buy sweeties with your money every week, or save up to get the toy that you want?”