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If having children is part of your life plan, it’s important to understand the costs involved. Read our guide on the true costs of starting a family.
6 min read
Lots of us dream of starting a family one day, with the pitter patter of tiny feet being one of the greatest gifts. And while you certainly can’t prepare for the endless love that you’ll feel, you can prepare for the more practical factors involved with having children. Although shopping for little baby outfits is fun, there are some big cost items that you’ll need to have at home before your baby arrives, as well as the ongoing costs to consider such as childcare.
Although considering the cost of having a baby might seem a little cold or calculating, it’s critical to take into account the financial impact it will have on your family budget. Where do you even start? We’ve broken down the main costs of raising a child, so you can plan your finances accordingly.
For such tiny humans, babies tend to come with big expenses. While the cost of having a baby varies from country to country, new parents across Europe agree that it’s an exciting but costly life event. From direct expenses like diapers and baby gear to less-obvious expenses like food and recreational activities, the baby expenses stack up. But don’t worry — good planning goes a long way!
Before we zero in on the cost breakdown, here’s a quick overview of the average cost of having a baby throughout Europe:
If you’re planning to have a baby, don’t be discouraged. Having a baby can be a magical, life-affirming experience. More practically, though, you’ll need to stay on top of your budget in the lead up to their arrival, and then each year after that. And the best way to do that is to audit all the expected costs and see where you can make savings.
Don’t forget that starting a family means your lifestyle will most certainly change, and this can be positive for your finances. While your baby costs may be high, other costs will go down (for a while, at least) such as partying with friends and expensive beach breaks. So, it’s more to do with reprioritizing your finances then stretching your budget further.
Keep in mind that you’ll start spending on baby-related expenses before the baby even arrives (hello, tiny little shoes!). To reduce the impact on your finances, plan ahead for things like must-have purchases, prenatal care, health insurance, and even childbirth expenses.
For instance, in Spain, prenatal classes for mothers and their partners are free. And medical care in public hospitals for EU citizens is typically covered by universal healthcare systems, such as paying through taxes or minimal upfront costs. However, if you decide to give birth at home, the costs can range from €1,500 to €3,000. Private health insurance in Spain will cost, on average, €164 per month.
Italian mothers also enjoy free healthcare, although an epidural is not guaranteed! Yet, if your partner wants to stay the night after the baby arrives, you’ll have to fork out €170 per night for the extra bed. Both Germany and France also offer free healthcare for expecting mothers.
As most European countries offer comprehensive healthcare for free as part of the EU, the majority of expenses are connected to essential baby gear:
On average, maternity leave in Europe lasts 18 weeks. And some countries pay new mothers the same salary they were making before having a baby during their leave, while others offer a percentage of their former salary.
It’s no surprise that taking time off work can put a strain on your finances if you’re receiving less than when you were working, or if you plan to continue maternity leave past the paid period. But that’s where planning comes in—reviewing maternity policies before going on leave will give you the time and confidence you need to get your finances in shape.
Here’s a snapshot of paid maternity leave in 4 European countries.
Italy. In Italy, new moms are entitled to 80% of their former salary 8 weeks before and 12 weeks after childbirth. Usually, the employer adds another 20% on top of the statutory maternity pay, so the mother receives 100% of her former salary. By the way, the five-month maternity leave is mandatory! Fathers receive just 4 days of paid paternity leave in Italy, and the mother is able to transfer one additional day from her own leave to make it 5 days.
France. In France, new mothers receive fortnightly payments for at least eight weeks. The benefits are calculated based on their average wage during the three-month period before the birth, with a quarterly payment ceiling of €9,933. The maternity pay is subject to tax and state social deductions at a flat rate of 21%. Paid paternity leave will double in France in 2021, to 28 days—and the first week is mandatory.
Spain. The amount of maternity pay in Spain is based on your salary, your contributions and, in some cases, the part of Spain you live in. Statutory maternity leave extends to 16 weeks, or 18 weeks under special circumstances. If you’re a working mother in Madrid, you also get a €100 stipend every month. Starting in 2021, fathers will have the same amount of leave as mothers in Spain.
Germany. German mothers get 14 weeks of fully-paid maternity leave. On top of the maternity leave, both parents can take an extended parental leave for up to a total of 24 months. The parental allowance is calculated based on salary and can range between €300 and €1,200 per month.
Wherever you’re based, after your little one arrives you’ll most certainly need to juggle your finances. It’s best to think ahead about how much time you intend to take off from work, then set a monthly budget that you’ll need to cover your costs and also enjoy yourself a little.
The costs of raising a child are going up year by year. According to the recent research, it averages at €240,000 for children aged 5 to 18. And the most significant expenses include childcare, education, food, and clothing. If we look at the average cost of childcare across Italy, Spain, France, and Germany, we can see they vary significantly from country to country.
Italy:
Spain:
Germany:
France:
Many of the essential costs like food, clothing, vacations, or hobbies can be brought down by shopping around for best deals, budgeting and planning ahead. Raising kids is expensive, but you don’t need to empty your life savings to give them a happy childhood!
Ease the stress of financial planning with N26. With instant push notifications on your mobile, you can keep track of all your expenses on the go. Plus, keeping the baby budget on track will be a picnic. With Spaces sub-accounts, you can create savings goals and put money aside with a few taps in the N26 app. Make budgeting one less thing to worry about.
In the first year, your new arrival can cost you anywhere between €3000 and €7000, depending on your budget for the bigger baby items. The everyday items, such as diapers, wipes, clothes and formula add up to around €160 a month. Stroller, car seats, cots and other baby furniture varies considerably in price, so you’ll find something within your budget. If you’ll be heading back to work within the first year, don’t forget childcare costs which average around €500 per month across Europe.
For EU citizens, the upfront medical cost of having a baby is close to zero as most countries have a form of universal healthcare, that typically means healthcare costs are covered through taxes. There may be some additional costs to consider depending where you live, such as medication prescription costs, having your partner stay over or even for private healthcare if that’s your preference. Public healthcare across Europe is typically very good.
There are two things to consider when thinking of having a baby: the upfront costs and the monthly costs. The upfront costs will include baby furniture, a stroller, and a car seat. Do your research on these as costs vary widely, and depend on your taste. Once you know what budget is required, you can create a saving account, like N26 Spaces, sub-accounts for saving up ahead of time. The ongoing monthly costs will include items such as diapers and clothes, and will typically cost around €160. You’ll need to look at your average monthly spending to see whether you can cover these additional costs, or whether you’ll need to cut down your current spending to make up for them.
Signs that you’re financially ready to start a family include having a steady income, having a rainy day fund for when you need to dip into savings, budgeting carefully each month and living within your means. Being on top of any debts is also highly recommended as your new arrival will come with their own costs, such as furniture, clothes and diapers.
Here’s a list of the biggest costs of having a baby:
By N26
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