Counting the cost of kids

By Adam Shaw

Having a baby can be a hard enough experience - paying for them can be nearly as painful!

Figures from insurance giant Axa put the total cost at a staggering £300,000. That's from birth to 21.

The biggest components are:

£22,000 on clothing

£35,000 for food

£139,000 on fees if you send them to private school

£27,000 to send them on to university.

Clearly, if your child turns out to be particularly dim, you could save a lot of money.

Or you might believe state education is a perfectly acceptable alternative.

Essential

Food and clothing might be pretty essential, but it's not necessary to feed your darlings caviar and dress them in Gucci.

Most parents seem to manage to bring their children up within their means.

Christine Ross: Contingency fund

But what this survey does show - and it comes from a financial company, after all - is the value of putting regular amounts away to cover the cost of raising children.

Financial planner Christine Ross of S G Hambros says: "Planning ahead and trying to build up a contingency fund can at least pay for more expensive years, special events such as hobbies, extra lessons, different things that you're going to have to fund that are over and above your monthly income."

Objective

There are, of course, various products aimed at providing for your children's future, but Christine thinks it can often be best to treat your own case individually.

"When you're looking to save for any future objective," she advises, "remember there is no one plan which is magically going to solve the problem.

"Package plans that say they are for a particular purpose are just investments.

"Instead look at how much you are going to need in the future and calculate how much you are going to need to save on a monthly or annual basis.

Cash or shares?

"You've got to look at how much your money's growing to grow," says Christine.

"That depends whether you're going to put it in cash - in a bank or building society - or whether you're willing to take the risk of investing in the stock market."

Of course, no one has any idea what the future holds.

Advisers make estimates for how much they think an investment will grow, but its only a guess.

And the best thing to have is some scepticism about what you are told and the ability to have more than one type of investment to depend on.