Counting the cost of having a baby

Aside from wondering which side of the family the baby will get its nose from, the big question would-be parents should ask themselves is “can I/we afford this?”

You might be adding a bundle of joy to your family but you are also adding a new cost centre to the household budget, a big one that’s going to be around for a good few years. Even if it is very cute.

A 2023 survey of adults commissioned by a fertility start-up in the UK found financial strain as the reason 59 per cent of the respondents would consider delaying or not having children at all. Nearly 30 per cent cited the “cost-of-living crisis” as the main barrier to becoming parents.

According to the Times, the average cost of raising a child to 18 in the UK in 2023 is £202,660 (€230,000), including housing and childcare costs.

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Closer to home, research commissioned by Laya in 2015 pegged the figure at €105,321 to raise a child “from cradle to college” in Ireland though it is safe to say that amount has increased since then thanks to the dramatic hikes in rents, energy bills and the cost-of-living crisis.

Early years

We decided to concentrate on the first five years of a baby’s life and examine which costs new families are likely to face.

Let’s start with the bare minimum. The MESL (minimum essential standard of living) in Ireland is calculated annually by the Vincentian MESL Research Centre. It looks at things like the cost of more than 2,000 goods and services, and consults with experts like nutritionists to work out how much money is needed every week as a minimum “to meet the physical, psychological and social needs of individuals and households”.

This goes beyond basic things like rent to include “what is needed to live at an acceptable dignified standard and participate in Irish society”.

According to the 2022 report, the amount required to support an infant’s minimum standard of living was €84 a week. That’s not an insignificant sum by itself for a household to fund but, when full-time childcare costs are added, the figure jumps to €305 a week.

[ Progress on childcare costs a bright spot amid housing and health crises ]

Given the rise in the number of dual-income households (and the need for them), it is rare that a family can completely dodge childcare costs if both parents plan to return to work.

This figure doesn’t take into account household costs, like rent or energy bills, which might increase when you add an extra person to a household and focuses on costs solely associated with the child. These are things like food, books, toys, social inclusion activities specified to age group – for instance swimming lessons – and Christmas presents.

For infants “personal care” was one of the biggest expenditures, with nappies alone adding €6.67 to weekly costs set out in the report. Inflation had milk formula prices alone driving a 5 per cent increase in the MESL costs for an infant in 2022.

The Early Childhood Care and Education (ECCE) scheme reduced childcare costs for pre-schoolers and brought their total MESL down to €228 each week. Their basic costs without childcare were €52, a substantial reduction on infants.

When kids hit primary school, their core MESL jumps to €91 – and to €214 total including childcare. This reflects costs associated with education like school uniforms and voluntary contributions plus activities with friends, sports, first bikes etc.

Families can avail of the non-means tested child benefit payment which comes to €140 per month for a single child. However, this would leave families with a shortfall of €49 per week to cover a baby’s basic standard of living before childcare costs.

The Vincentian MESL costs look at the bare minimum required for a baby to have an acceptable quality of life but it is in line with budgets compiled by other sources such as parental advice sites and financial planning services. According to Mummypages.ie, a baby’s first year of life costs parents roughly €4,1740 which comes out to €80.20 a week in core costs not including childcare.

The single big spend categories relate to consumables like milk formula (€58 per month), baby food and nappies.

One-off costs like baby furniture (cots, changing tables, baby gates, bedding etc) and the bits you need to cart the baby around (prams, car seats etc) made up about 30 per cent of that year’s cost at €1,294. These costs vary from family to family depending on the availability of hand-me-downs and second-hand items which could lower some costs or, better yet, be free.

[ Your stories of childcare costs in Ireland: ‘I am living below the poverty line to keep working’ ]

A spokeswoman from Bank of Ireland also suggested €4,000 as the reasonable cost for the first year of baby’s life as used by financial planners. But that might be just the jumping off point even with those big ticket one-off costs out of the way.

“Of course with every year that passes, that figure may increase, taking into account childcare, their ever-changing wardrobes as they grow, school expenses, birthdays, Christmas,” she told The Irish Times.

These are also just the costs that occur after birth but babies actually start racking up their expenses before they make an appearance in the world at all.

Luckily, the overwhelming majority of people in Ireland who need it can access free antenatal care thanks to the maternity and infant care scheme. This includes GP visits during pregnancy, appointments with midwives or an obstetrician, an ultrasound and medical care during delivery. It also includes postnatal check-ups for both the parent and the baby.

Access to care varies depending on the availability of local services and the preferences of families.

Families will have to pay out of their own pockets for extra scans with higher quality imaging, maternity clothes and extras to help manage the pregnancy such as specialised yoga classes, maternity books and massages.

If you elect to go private or semi-private to have a baby, the costs vary depending on your level of health insurance (if you have it all).

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The decision to go private or semi-private usually has less to do with having your own room and more to do with being under the care of the same consultant throughout the pregnancy and, ideally, present for the birth (however this isn’t always guaranteed).

In the public system if the pregnancy is low-risk, midwives will usually attend the labour with whatever hospital doctor is on duty at the time being on hand if they’re needed.

Private health plans

Costs vary widely thanks to the different needs of expectant mothers and private health insurance schemes’ coverage. However, people looking to join or upgrade their existing health insurance to avail of private maternity benefits usually have to wait a year to actually use them, so that’s at least two years you would need to pay to enjoy cover.

A quick analysis of available plans from different providers on the Health Insurance Authority Scheme’s comparison tool show that plans offering the most comprehensive private maternity cover vary from €944-€1,200 per year so that’s €2,000-plus that families will need to be prepared to pay.

Patients without insurance can also self-fund their private maternity care, paying out of pocket for consultant fees, hospital fees, anaesthesia fees etc.

At the National Maternity Hospital, private patients can expect to pay €2,500-€5,000 in consultant fees and €1,000 per night in accommodation fees for single-occupancy rooms if available.

Parents electing to go private should be aware that if their baby has additional medical needs and has to be taken to the special care or neonatal intensive unit, the family will be liable for those extra costs especially if the baby is not on their mother’s insurance.

Then there’s the financial hit of one or both partners taking maternity and paternity leave, depending on their workplace conditions. Employers must grant 26 weeks of basic maternity leave to people giving birth. State maternity benefit is paid to women on maternity leave for 26 weeks at a rate of €262 per week. Employers may top this up to a woman’s normal wage, depending on the conditions of their contract, or they may not, leaving a potentially significant shortfall in household income that families have to negotiate.

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Women are then entitled to an additional 16 weeks’ unpaid leave, with parents also able to avail of 26 weeks’ unpaid parental leave to care for a child under 12.

“It goes without saying that variation in household income due to maternity leave is one of the major considerations when budgeting for starting a family,’ said Bank of Ireland’s media relations manager Suzanne O’Dea. The bank advises parents to plan ahead and research their entitlements to prepare their budget accordingly when incomes change.

It encourages families to get financially ready for a baby by making a new budget taking account of the latest addition, adding to a savings account regularly, building up an emergency fund, updating wills and going over insurance policies to see what they are covered for.

“It is easier to build this fund if you set up a monthly direct debit,” advises O’Dea on building a baby savings buffer. “In this way, the money is ‘gone’ each month, so you’re not tempted to dip into it.”

And peace of mind over finances means you can relax a little and spend your time preparing for parenthood.