Babies push parents into the red
Published On 5 October 2007
Having a new baby could put people into debt, a new report has warned.Website moneyexpert.com found that parents run up £1,140 of debt in the first year after their child is born.
Around 40 per cent of new parents go into the red during this first year, as lost income combines with extra costs to increase financial pressures.
Some people find themselves in serious debt problems as a result of their child and could need an IVA to cope with the issue - seven per cent end the first year after the birth with over £2,500 worth of debts and a worrying one in 50 parents manage to run up over £7,000.
"For most of us worries about money go out of the window with the joy of having a baby. It's hard enough coping with the sleepless nights and new responsibilities without thinking about budgets," commented Sean Gardner, chief executive of the website.
"But financially a new baby can cause havoc because of the combined burden of extra costs and reduced income.
"If money is already tight, it's no wonder that so many families have had to turn to borrowing to make ends meet. There are obviously increased costs so debt is often a sensible way to tide you over."
Indeed, the figures showed that 22 per cent of parents used credit cards to cope with the extra costs and ten per cent took out a loan.
