Will Having A Baby Result In Debt Problems?
Published: 19 April 2012 By Peter Thompson Leave a Comment
As parents enjoy their new baby, many end up with debt problems because of the financial burden of maternity leave.
According to a study by uSwitch.com, nearly 30% of first time mums end up with debt problems to the tune of an average of almost £2,500 because of maternity leave.
The costs of having a baby are high. The essentials of a baby are wide, from pushchair to car seat and nappies but it’s the non-essential, nice to have that catch many out.
Even though nearly a quarter of couples delay having a baby because of the cost, when they do go ahead the fall income when taking maternity leave hits many hard. Only a quarter of new mums feel financially prepared.
Those going on maternity leave see their monthly household income nearly halve and yet over 40% don’t save any money to cover their time off.
The financial burden of maternity leave forces 10% to borrow from their loved ones and some 14% resort to credit cards, loans and overdrafts.
Nearly 40% of first time mums feel that they don’t want any more children because they were put off by the costs.
With people struggling already with personal finance matters, the rising cost of living, including a 21% hike in energy bills and an almost 6% rise in travel fares, there is ever increasing pressure on consumers.
All this and the fall in income for mums-to-be during maternity leave could push many over the edge and result in debt problems – casting a serious shadow at what should be a joyous time following the arrival of a new baby to the family.
As Ann Robinson, Director of Consumer Policy at uSwitch.com comments: “‘Sadly, very few mums have the luxury of being able to stay at home for the whole of their maternity leave and even fewer have the choice to be a stay at home mum.
“It’s clear that more needs to be done by the Government to help families cope with the financial burden of parenthood, but in the meantime families can help their situation by reviewing household budgets and looking at where they can cut costs to save a bit of extra cash.”
MoneyHighStreet comments: “As with most things in life, it’s important, wherever possible, to plan such life changing events as having a baby. This includes understanding your budget, how your existing expenses and income work together and what the impact will be of having a baby.
“The cost of having a baby is high. It is an emotionally fantastic time too and a period during which you don’t want to be faced with dealing with debt problems.
“Do what you can to plan ahead and stick to your budget – don’t be sucked into to buying the latest, top of the range pushchair for example if you really cannot afford one. It might look good but broadly it only does the job that a cheaper, more appropriate one will do.
“If you do feel you are struggling with debt problems then the sooner you take action to tackle them the better. If need be get professional debt advice.”