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The average cost of raising a child has hit £194,000 - or pound;9,227 a year from birth to the age of 21 - according to research from insurer LV= published yesterday. That is equivalent to £769 a month, or £25 a day, and is a 4% increase on the figure from the company a year ago.
With job losses on the increase and households feeling the strain of recession, many parents will find these figures shocking. One of those is housewife Cassie Feltham, 32, who lives in Swanage, Dorset, with husband Richard, 37, an IT specialist, and their children, Daisy, four, George, two, and Tilly, six months. "It's incredible that raising a child costs that much - especially when you have three," she says.
But you can at least make the bills more manageable. Here Guardian Money offers some thoughts on keeping your family finances under control:
Cut childcare costs
At £53,818 over 21 years, it's the biggest financial burden and Feltham admits this was one reason she gave up her job as a personal assistant when Daisy was born.
"I wanted to be with her, of course," she says. "But it made financial sense, given I earned £20,000 at the time, and nurseries around here cost about £35 a day." If giving up work is not an option, there are other ways. One possibility is to join forces with other parents in your area. Tinies, Britain's largest network of nanny and nursery staff agencies, found that the number of "nanny shares" in the UK has increased threefold over the past six months. On websites such as nannyshare.co.uk you can key in your postcode and find families who want to share a nanny.
Then there are pre-school clubs. Feltham manages the one in her village, which runs from 8am to 3pm and costs £17.30 a day - about half the price of a standard nursery.
Claim government benefits
Working tax credits and childcare vouchers can be used to pay for a nursery, or hiring an Ofsted-registered nanny, even if shared with another family.
It is crucial to take advantage of all government help but many parents find the system confusing. Generally, you are better off with childcare vouchers (available through your employer in lieu of salary) rather than working tax credits, if your childcare costs are more than £175 a week for one child, or £300 a week for two or more, or if you get tax credits worth just £545 and already claim for your childcare costs. Otherwise, working tax credits will probably be better, as the childcare element covers up to 80% of the total cost.
All families with children qualify for the annual £545 "family element" of tax credits, and lower-income families can get up to £2,085 a year to help with the overall cost of raising a child. Go to hmrc.gov.uk/taxcredits
Save for the future
School and university costs are the second-biggest outlay. On average, households spend £50,240 on education over a child's lifetime, LV= says, including £34,300 on a three-year university degree. But figures from The Children's Mutual, show that 78% of parents think the credit crunch will make it harder.
One way of easing the pain is to start building up a university fund from an early age. Under the child trust fund (CTF) programme, every baby born after 31 August 2002 receives at least £250 in the form of a government voucher to get their account started. Parents, grandparents and others can, between them, put in up to £1,200 a year. All income and gains are tax-free.
Even small contributions add up over time. According to The Children's Mutual, if today's 18-year-olds had had child trust funds - into which their parents paid the current monthly average of £24 - they would now get £9,980.
However, Guardian Money told last week how last year's stockmarket slump had blown a hole in many children's investments.
If you don't fancy the stockmarket, best-buy cash CTF rates include Yorkshire Building Society's 4.5%. Feltham agrees that every little helps. "Richard and I pay £10 into a child trust fund and £10 into a savings account for each of our children every month. The funds will not be nearly enough to cover the cost of university, but they will help."
Holiday for less
More than half of the parents questioned by LV= have curbed their spending on holidays and short breaks, while 52% have also cut back on leisure and recreational activities for the family. Meanwhile, Legal & General reveals that almost one in five Britons do not expect to be able to afford a holiday this year, with a further 12% planning a break in the UK rather than going abroad.
One way to get away without breaking the bank is to wait until the last minute. Travel agents and tour operators are suffering, too, so the late deals are often very attractive - though the school holidays tend to be pricier, of course. Teletext Holidays (teletextholidays.co.uk) was this week offering seven-night breaks to Malta departing in February/March from £109 per person. Another option is to stay at home and spend some quality family time going on day trips or just relaxing.
Feltham says: "We have often holidayed in cottages around the UK. Last year we rented a beach hut, a 10-minute drive from our home, for a week during the summer holidays. It only cost £105 but it was the best week I've ever had, and I have already rebooked for this summer."
Sell/share toys and clothes
About 35% of parents already sell unwanted and outgrown toys and clothes through online auction sites such as eBay or at car boot sales. But there are still many families missing out on this potentially valuable income stream.
"When we moved house two years ago, I made about £2,000 selling old stuff on eBay," says Feltham .
Other ways to cut costs include sharing items with friends and relatives who have children of a similar age. "My friend's eldest daughter has outgrown her highchair, so she has lent it to me for Tilly until her little one is big enough.
"I have also done a car seat swap with another friend," she adds.
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