Having a Baby True Cost Planner

Childcare is the line that dominates

One-off purchases — cot, pram, car seat — feel like the expense while you are preparing, but they are a fraction of it. Once both parents return to work, childcare typically becomes the largest single household cost after housing, and in expensive cities it can exceed a mortgage payment.

This is worth modelling before the birth rather than after, because it determines whether returning to work full-time is financially worthwhile at all. For a second child the arithmetic frequently tips: two sets of fees against one salary is a calculation many households only run once they are already in it.

Lost income is the invisible half

Parental leave arrangements differ enormously between countries, and where pay during leave is partial or capped, the reduction in household income over that period is often larger than every purchase in the first year combined. Reduced hours after returning have a longer effect still, including on pension contributions.

Neither shows up as a cost, because no money leaves. Both are real.

What is worth buying new

• Car seats, new. Safety standards change and a seat's history cannot be verified — a seat in an earlier collision may look undamaged and not be.
• Mattress, new. Standard advice in most countries, and inexpensive relative to everything else.
• Almost everything else, secondhand. Prams, cots, carriers, high chairs and clothes are used for months rather than years and hold up well. Clothes in particular are outgrown before they wear out, which is why the resale market for them is so large.

The expensive mistake is buying in advance. Much of what is marketed as essential goes unused by a given baby, and you can generally buy what you turn out to need within a day.

Check what you are entitled to

Child benefits, tax credits, childcare subsidies and free hours exist in some form in every country here, and take-up is consistently below eligibility — often because the rules are not obvious and people assume they earn too much. Several are not means-tested at all, and several of the means-tested ones extend further up the income scale than expected. It is worth half an hour with your own country's official guidance before assuming you do not qualify.