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Balancing Babies & Budgets - The Cost of Parenthood · A Little Bit Richer

• 0:02
  Kia: Hey, this is Kia. Is it ever a right time
• 0:05
  Kia: to have a baby? Navigating the cost of parenthood can be
• 0:08
  Kia: daunting. So we've got an expert here today to help
• 0:11
  Kia: us balance work and home life. Whether you are a
• 0:14
  Kia: new parent or expecting the world of parenting can feel
• 0:16
  Kia: like a foreign one. Welcome to another episode of A
• 0:19
  Kia: Little Bit Richer, brought to you by my friends at
• 0:21
  Kia: Legal & General. Charlotte Jessop from the Looking After Your Pennies
• 0:24
  Kia: platform is here to help us navigate financial planning when
• 0:27
  Kia: it comes to parenthood. Charlotte is a financial educator, coach, writer,
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  Kia: and vlogger. Welcome, Charlotte.
• 0:36
  Charlotte Jessop: Hello.
• 0:37
  Kia: So we're talking about the topic of parenthood and becoming
• 0:41
  Kia: a parent is an incredible experience with all the joy
• 0:45
  Kia: and love that it brings. And as a former bundle
• 0:47
  Kia: of joy I should know that all too well, but
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  Kia: it is a very big decision. So I want to
• 0:53
  Kia: ask you, is there ever a right time to have a
• 0:55
  Kia: baby? And what advice do you have for people considering
• 0:58
  Kia: starting or growing their family?
• 1:01
  Charlotte Jessop: This is a great question. Honestly, from my own personal
• 1:06
  Charlotte Jessop: experience there's not a right time. I made the decision
• 1:11
  Charlotte Jessop: to be a parent purely from an emotional standpoint rather
• 1:15
  Charlotte Jessop: than a financial one. I got married when I was
• 1:19
  Charlotte Jessop: 26 and I knew that I wanted to start a
• 1:22
  Charlotte Jessop: family pretty much straight away, and that was what I
• 1:26
  Charlotte Jessop: did. A year later, I had my first daughter and
• 1:30
  Charlotte Jessop: then I had another one two years after that. And
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  Charlotte Jessop: my finances at that time, I had not long bought
• 1:36
  Charlotte Jessop: a house before that. I just finished paying for a wedding
• 1:41
  Charlotte Jessop: and my finances probably weren't rosy. When I sit down
• 1:46
  Charlotte Jessop: and look at the money I have now, I sit down and think, "
• 1:48
  Charlotte Jessop: Oh, it'd probably be a lot easier now." But I
• 1:52
  Charlotte Jessop: think the reality is that if you sit there and
• 1:56
  Charlotte Jessop: you try and rationalise every decision you're going to make,
• 2:00
  Charlotte Jessop: there's never a right time because if it's not the
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  Charlotte Jessop: finances that are stopping you, it's the things that you enjoy.
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  Charlotte Jessop: It's like, " Oh, I want to travel." Or " I want
• 2:07
  Charlotte Jessop: to buy a house." So there want to always be something that stands
• 2:12
  Charlotte Jessop: in your way of making that decision to be a
• 2:14
  Charlotte Jessop: parent. Try not to wait for perfection. You just got
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  Charlotte Jessop: to take a little bit of a leap and figure
• 2:20
  Charlotte Jessop: the rest out on the way.
• 2:22
  Kia: That's really comforting to hear because knowing that there is
• 2:25
  Kia: no right time just gives you that confidence to say, "
• 2:27
  Kia: Whenever you feel like you want to do it, just
• 2:29
  Kia: do it." We've spoken about it before on a podcast
• 2:32
  Kia: about the legal and general research that revealed some key
• 2:35
  Kia: milestones. Like parenthood is being delayed and the average age
• 2:40
  Kia: of having a baby is later than it ever has
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  Kia: been at 32 years old. So I want to ask
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  Kia: you, why do you think that is?
• 2:47
  Charlotte Jessop: Do you think there are some personal development that happens
• 2:50
  Charlotte Jessop: at some point around when you turn 30? There may
• 2:53
  Charlotte Jessop: be changes in your perspective on life and family and
• 2:57
  Charlotte Jessop: that sort of thing. But also there are some things
• 3:00
  Charlotte Jessop: that we've already touched on, things like career. I was
• 3:03
  Charlotte Jessop: fortunate that I entered a career that allowed me to
• 3:07
  Charlotte Jessop: progress fairly quickly. And I felt that was in a
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  Charlotte Jessop: strong place. That isn't the same for everybody. It can
• 3:15
  Charlotte Jessop: take a few years to find a career that's right
• 3:18
  Charlotte Jessop: for you. Education, more people are going to university, doing
• 3:22
  Charlotte Jessop: postgraduate study as well. So all of those things make
• 3:26
  Charlotte Jessop: a difference. And also when we look at finances, it's
• 3:29
  Charlotte Jessop: been a rough few years.
• 3:30
  Kia: It's been rough. It's been rough.
• 3:32
  Charlotte Jessop: We look at the likes of COVID. We've also got
• 3:34
  Charlotte Jessop: things like the cost of living crisis and this has
• 3:37
  Charlotte Jessop: made things more expensive and people I think are potentially
• 3:40
  Charlotte Jessop: waiting for those things to maybe settle down. House prices
• 3:44
  Charlotte Jessop: are huge now. So it makes sense for people to
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  Charlotte Jessop: want to feel a little bit more secure in their
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  Charlotte Jessop: financial situation, but also these personal development milestones that I
• 3:56
  Charlotte Jessop: think as women we have more freedoms. We were able
• 3:59
  Charlotte Jessop: to make bigger and better strides in our careers than
• 4:03
  Charlotte Jessop: my parents, than their parents were. So actually there's a
• 4:06
  Charlotte Jessop: real sense of wanting to take advantage of that. So yeah, I think
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  Charlotte Jessop: there's a whole host of reasons. And I completely understand
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  Charlotte Jessop: why people would want to delay that.
• 4:17
  Kia: There is such a big shift between generations that if
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  Kia: you just take my parents versus me. So my parents
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  Kia: had me at 24. I'm 26, and I cannot even
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  Kia: fathom having a child right now because where I am in my career
• 4:32
  Kia: and things I want to achieve. So yeah, I think
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  Kia: it's a different world that we're living in. Absolutely. So
• 4:37
  Kia: let's talk about finances then. Our favorite topic to talk
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  Kia: about. So as a parent yourself, can you talk us
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  Kia: through some of the financial impacts of having a baby?
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  Kia: So more so the short- term costs when they're younger,
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  Kia: what are some of the costs that we can expect when
• 4:55
  Kia: you have a baby?
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  Charlotte Jessop: So I think this is what most people focus on.
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  Charlotte Jessop: You're like, " I'm having a baby." And you kind of
• 5:02
  Charlotte Jessop: get very caught up in this bit. And actually it's
• 5:05
  Charlotte Jessop: kind of fleeting. So they are going to need some clothes
• 5:09
  Charlotte Jessop: and they are going to rapidly grow out of those
• 5:11
  Charlotte Jessop: clothes as well. So I always urge people to go
• 5:14
  Charlotte Jessop: second hand for things particularly like those newborn clothes because
• 5:20
  Charlotte Jessop: it could be a week and they're done.
• 5:22
  Kia: A week?
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  Charlotte Jessop: So clothes is obviously a main one, but lots of
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  Charlotte Jessop: people buy that for you, and it's their number one thing
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  Charlotte Jessop: to buy. You need things like car seats, and that's
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  Charlotte Jessop: probably one of the few costs that you can't really
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  Charlotte Jessop: avoid because recommended that you buy those sorts of things
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  Charlotte Jessop: brand new so that you know they haven't been in
• 5:39
  Charlotte Jessop: accidents and stuff like that. Then you have to get
• 5:41
  Charlotte Jessop: this kid out and about. You might want some sort
• 5:44
  Charlotte Jessop: of push chair or I was quite a fan of
• 5:48
  Charlotte Jessop: baby wrapping. And then you have things like feeding. So
• 5:52
  Charlotte Jessop: depending on how you choose to feed your child, you
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  Charlotte Jessop: might have costs involved there. And then there's things like
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  Charlotte Jessop: nappies and all of these sorts of things. And whether
• 6:01
  Charlotte Jessop: you choose to go down a kind of disposable nappy
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  Charlotte Jessop: route or a reusable nappy route, both of those things
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  Charlotte Jessop: involve costs. On top of that, you're then going to want
• 6:09
  Charlotte Jessop: to do stuff with your kid. And there's always a
• 6:12
  Charlotte Jessop: societal pressure to get your kids out and about and
• 6:16
  Charlotte Jessop: learning baby sign language or baby yoga. These are all
• 6:19
  Charlotte Jessop: things that I did with my children. I look at
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  Charlotte Jessop: it now and I'm like, " Why on earth did they
• 6:23
  Charlotte Jessop: think they could do yoga when they were three months old?"
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  Charlotte Jessop: But a lot of this is about socialising and that's
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  Charlotte Jessop: hugely important as a new parent to just get out
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  Charlotte Jessop: and meet other mums and that sort of thing. So
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  Charlotte Jessop: those are costs as well. And as they get older,
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  Charlotte Jessop: you then enter into things like the school years and
• 6:38
  Charlotte Jessop: nursery and that sort of thing. And then there's I
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  Charlotte Jessop: think a significant proportion of the costs of having a
• 6:44
  Charlotte Jessop: child is around childcare. So even if you take six
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  Charlotte Jessop: months a year off after you've had a child, you
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  Charlotte Jessop: are going to at some point pay out for childcare.
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  Charlotte Jessop: And there are ways that you can negate this or
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  Charlotte Jessop: reduce this in some way, but that is a significant cost
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  Charlotte Jessop: that I think is a huge factor in why people are
• 7:02
  Charlotte Jessop: choosing to delay parenthood. When you send them off to
• 7:06
  Charlotte Jessop: school, I look at my kids now, I basically need
• 7:09
  Charlotte Jessop: to just redirect my salary to the school's bank account
• 7:12
  Charlotte Jessop: because it's Christmas Jumper Day, it's anti- bullying week and
• 7:16
  Charlotte Jessop: they got to wear yellow socks.
• 7:18
  Kia: I used to love that school though. Mum give me
• 7:20
  Kia: a pant. Guys, I love it.
• 7:21
  Charlotte Jessop: So yeah, there's always a new thing. They've had a
• 7:24
  Charlotte Jessop: school photo and you couldn't possibly not get that photo-
• 7:27
  Kia: Of course.
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  Charlotte Jessop: ... because they're not smiling. So you still have to
• 7:30
  Charlotte Jessop: pay for all of those things. And it's always something.
• 7:33
  Charlotte Jessop: There's a school trip. My eldest daughter has recently signed
• 7:37
  Charlotte Jessop: up to rock band lessons.
• 7:40
  Kia: Wow.
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  Charlotte Jessop: So that's where my salary is probably going.
• 7:42
  Kia: Is being directed. Wow.
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  Charlotte Jessop: So if she's not a rock star in the next 20 years-
• 7:46
  Kia: I want to see her on the charts. She has to
• 7:49
  Kia: be on the charts.
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  Charlotte Jessop: Yep. Yep, that's it.
• 7:52
  Kia: Wow. The costs really do add up, but I don't
• 7:54
  Kia: think that should be a reason to not have kids.
• 7:57
  Kia: It's just being aware. You'd rather know than go into
• 8:01
  Kia: something and have no idea. So I think that's all
• 8:03
  Kia: we're trying to do. Just bring awareness to it, but
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  Kia: don't let that be a reason to not pursue-
• 8:07
  Charlotte Jessop: Absolutely.
• 8:07
  Kia: ... the joy that is parenthood. So what are some
• 8:10
  Kia: of the considerations longer term that people should be thinking about?
• 8:14
  Charlotte Jessop: What we need to maybe talk about here is the
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  Charlotte Jessop: things that are not so obvious. And this is things
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  Charlotte Jessop: like the costs of being on maternity leave. That was a
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  Charlotte Jessop: reduction for me, quite a significant reduction in my salary
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  Charlotte Jessop: to spend with my children in those early weeks and
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  Charlotte Jessop: months, but then that also then impacts longer term as
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  Charlotte Jessop: well. So it's at that point where women become mothers
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  Charlotte Jessop: that we start seeing bigger gaps in things like gender
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  Charlotte Jessop: pay gap, we start seeing pension gaps, savings gaps. It's
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  Charlotte Jessop: that point. Basically we don't see a huge difference in
• 8:52
  Charlotte Jessop: these things until we get to that point where women
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  Charlotte Jessop: start having babies and that's when we start seeing the
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  Charlotte Jessop: divide between the two. So we need to be considering
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  Charlotte Jessop: the implications of this and putting things in place to
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  Charlotte Jessop: make sure that we are offsetting or working to ensure
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  Charlotte Jessop: that there's not a longer- term damage on those things.
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  Charlotte Jessop: And that can be hard. I definitely wasn't 26 years
• 9:21
  Charlotte Jessop: old and expected my first child going, " We really must
• 9:25
  Charlotte Jessop: talk about the pension gap." That wasn't something that I
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  Charlotte Jessop: was thinking about, but being able to do this and
• 9:31
  Charlotte Jessop: raise awareness of these things means that maybe we can
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  Charlotte Jessop: bring to light some of these conversations and people can
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  Charlotte Jessop: start making changes towards their finances. So you can do
• 9:40
  Charlotte Jessop: things like pay into your pension while you're on maternity
• 9:43
  Charlotte Jessop: leave, but it doesn't necessarily end at mat leave. It
• 9:46
  Charlotte Jessop: can be like what happens in terms of who's going
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  Charlotte Jessop: to look after the children? Is it going to be
• 9:51
  Charlotte Jessop: that one parent goes part- time or quits work entirely?
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  Charlotte Jessop: And you then go down to a single income household.
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  Charlotte Jessop: What are the costs of that? But also what are
• 10:00
  Charlotte Jessop: the risks of that? Because if you're a single income
• 10:04
  Charlotte Jessop: household, then your finances are a lot more precarious than
• 10:09
  Charlotte Jessop: a double income household. And some of these conversations need
• 10:12
  Charlotte Jessop: to be had, particularly if you've got a partner that
• 10:15
  Charlotte Jessop: you're going on this journey with, how do you build
• 10:18
  Charlotte Jessop: back in that security and how do you build back in
• 10:20
  Charlotte Jessop: that equity in that financial partnership? So those costs are
• 10:24
  Charlotte Jessop: not easy to see, but they are still there, and
• 10:28
  Charlotte Jessop: I think we're hearing more and more about them now.
• 10:33
  Charlotte Jessop: I guess the other thing to say on this is
• 10:34
  Charlotte Jessop: it's not all financial. There are either my mental workload
• 10:39
  Charlotte Jessop: has increased significantly since having children. I need a PA
• 10:45
  Charlotte Jessop: to manage the emails from my kids' school because there's
• 10:47
  Charlotte Jessop: about 30 a day. But that creates a toll and
• 10:52
  Charlotte Jessop: it might be that has an impact on some of
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  Charlotte Jessop: the other things that I'm able to do, whether it's
• 10:57
  Charlotte Jessop: a hobby or whether it's paid work because those sorts
• 11:00
  Charlotte Jessop: of things take up time.
• 11:03
  Kia: I agree. I think it's good that we're having these
• 11:05
  Kia: conversations because as women we need to be aware and
• 11:08
  Kia: plan for that. So Charlotte, can you give any tips
• 11:11
  Kia: for blending parenthood and your career?
• 11:14
  Charlotte Jessop: Yes. This is an interesting one, isn't it? Because for
• 11:17
  Charlotte Jessop: me, on a personal level I'm hugely career driven and
• 11:21
  Charlotte Jessop: ambitious, but also I love being a parent. So I
• 11:24
  Charlotte Jessop: have to find a way to make both of these
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  Charlotte Jessop: things work for me. And it's been a journey and
• 11:31
  Charlotte Jessop: it hasn't always been easy. And there's definitely been moments
• 11:33
  Charlotte Jessop: where I've had to choose one over the other. And
• 11:36
  Charlotte Jessop: there's always a sense of guilt and that sort of
• 11:38
  Charlotte Jessop: thing about it. I would say lean on your village.
• 11:42
  Charlotte Jessop: And we talked about those baby classes where you're doing
• 11:45
  Charlotte Jessop: baby sign language, it all feels pointless, well, those people
• 11:48
  Charlotte Jessop: turned into my village. I took my oldest daughter to baby
• 11:53
  Charlotte Jessop: sign language class and the woman that sat next to
• 11:57
  Charlotte Jessop: me is now one of my best friends. Her son
• 12:00
  Charlotte Jessop: goes to school with my daughter. She lives around the
• 12:03
  Charlotte Jessop: corner from me and she will be like, " Can I
• 12:07
  Charlotte Jessop: drop my kids off at your house and can you
• 12:08
  Charlotte Jessop: take them to school for me today?" And I'll be like, "
• 12:10
  Charlotte Jessop: Yeah, no problem. I'm going that way anyway." And then
• 12:12
  Charlotte Jessop: the next day I'll be like, " Do you mind picking
• 12:15
  Charlotte Jessop: up my kids because I'm a bit late coming back
• 12:17
  Charlotte Jessop: from work?" And these people make the whole thing work.
• 12:20
  Charlotte Jessop: And this can be friends, this can be family. And
• 12:23
  Charlotte Jessop: having that village, having that group of people around you
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  Charlotte Jessop: that you can call upon really does make a huge
• 12:31
  Charlotte Jessop: difference to the whole experience of having kids. I think
• 12:35
  Charlotte Jessop: the other thing to think about is just to think
• 12:37
  Charlotte Jessop: creatively about your options. And we mentioned about the cost
• 12:41
  Charlotte Jessop: of childcare, and this is huge. And actually my ex-
• 12:46
  Charlotte Jessop: husband and I, when we had little kids, we made
• 12:49
  Charlotte Jessop: the decision to both work part- time rather than pay
• 12:53
  Charlotte Jessop: for childcare. Not only did our kids have a parent
• 12:56
  Charlotte Jessop: with them at all times, but also by working part-
• 13:00
  Charlotte Jessop: time we were paying less tax due to things like
• 13:02
  Charlotte Jessop: tax allowances, than if one of us had worked full-
• 13:06
  Charlotte Jessop: time. And it's going to be different for every parent.
• 13:11
  Charlotte Jessop: But yeah try not to just be like, " Best childcare
• 13:13
  Charlotte Jessop: or nothing." There might be another thing.
• 13:16
  Kia: There are great ways that you can kind of make things work which is good.
• 13:18
  Charlotte Jessop: Absolutely.
• 13:18
  Kia: It's good to hear. Before we wrap up this episode,
• 13:21
  Kia: I want to ask you, what are your top three
• 13:24
  Kia: tips if you'd like to have a child in the future?
• 13:28
  Charlotte Jessop: So first one, don't go overboard on the baby stuffs
• 13:32
  Charlotte Jessop: because they can be really cheap and they don't need
• 13:36
  Charlotte Jessop: loads of things. The thing is, you love these kids
• 13:38
  Charlotte Jessop: when you wanted to have all the best stuff, but
• 13:40
  Charlotte Jessop: ultimately they don't need fancy trainers that cost you 200
• 13:44
  Charlotte Jessop: quid. Particularly when they're seven years old they don't know.
• 13:48
  Charlotte Jessop: So you could just get them cheap ones and they
• 13:50
  Charlotte Jessop: can run through muddy puddles and live their best lives
• 13:52
  Charlotte Jessop: like that. So don't go overboard on the baby stuff
• 13:55
  Charlotte Jessop: and just kind of keep those costs in check. As
• 13:58
  Charlotte Jessop: exciting as it is don't. The next one, and this
• 14:01
  Charlotte Jessop: might be my favorite tip, is to choose your career
• 14:05
  Charlotte Jessop: wisely. And I say that I'm not turning people away
• 14:09
  Charlotte Jessop: from following their career dreams, but if you can make
• 14:13
  Charlotte Jessop: choices about the job that you're in prior to entering
• 14:17
  Charlotte Jessop: the journey of parenthood it can make or break the experience.
• 14:23
  Charlotte Jessop: So I'm talking about things like does the company you're
• 14:25
  Charlotte Jessop: working for, what is their mat leave like? That will
• 14:28
  Charlotte Jessop: make a difference to the amount of money you have
• 14:29
  Charlotte Jessop: in those early days. Things like what are the pensions
• 14:33
  Charlotte Jessop: like in that job? Are you getting a good pension
• 14:36
  Charlotte Jessop: out of that job? And things like remote working, all
• 14:39
  Charlotte Jessop: of this is going to impact on your experience not
• 14:43
  Charlotte Jessop: only during the parenting years but onwards. And I think
• 14:46
  Charlotte Jessop: if you can be in the right place with your
• 14:49
  Charlotte Jessop: career and you are in a job that you love and
• 14:53
  Charlotte Jessop: has flexibility, it can literally be a game changer for
• 14:56
  Charlotte Jessop: the whole experience. And then the last one is work
• 15:00
  Charlotte Jessop: on your money stuff before you have a kid. So
• 15:03
  Charlotte Jessop: this can mean doing things like increasing your pension's contributions.
• 15:07
  Charlotte Jessop: It can be things like paying off debt. It can
• 15:10
  Charlotte Jessop: be things like overpaying your mortgage. And the benefit of
• 15:14
  Charlotte Jessop: this is twofold. Not only do you get the benefits
• 15:17
  Charlotte Jessop: of increased pension and less mortgage and stuff like that,
• 15:20
  Charlotte Jessop: but you also get used to having less money. So
• 15:24
  Charlotte Jessop: when you're making those extra contributions you get all of
• 15:26
  Charlotte Jessop: those perks and then when baby comes along and you
• 15:29
  Charlotte Jessop: start your family, you can stop doing those things and
• 15:32
  Charlotte Jessop: offset that money towards starting your family, and you'll be
• 15:37
  Charlotte Jessop: in a stronger place for it and you won't miss
• 15:39
  Charlotte Jessop: the cash when baby comes along because it was already
• 15:42
  Charlotte Jessop: being spent-
• 15:42
  Kia: It was already gone. Reallocated.
• 15:42
  Charlotte Jessop: ... on something. Yeah. So I think if you can
• 15:45
  Charlotte Jessop: do that, and it's always going to be a fine
• 15:47
  Charlotte Jessop: balance. When do we stop doing all that money stuff
• 15:50
  Charlotte Jessop: and when do we start having a kid? But essentially
• 15:53
  Charlotte Jessop: if there's something you want to do you've got to
• 15:55
  Charlotte Jessop: take the plunge eventually.
• 15:56
  Kia: You have to take the plunge if you want to achieve it.
• 15:58
  Kia: Yep. Charlotte, thank you so much. This has been such
• 16:01
  Kia: an insightful episode, especially as me who doesn't have kids
• 16:04
  Kia: yet, but wants kids in the future. This has been
• 16:07
  Kia: a reassuring and informative episode. So thank you so much
• 16:10
  Kia: for coming onto the podcast.
• 16:11
  Charlotte Jessop: Thank you.
• 16:15
  Kia: Thanks Charlotte. You've given us a lot to think about.
• 16:17
  Kia: I'd love it if you could review the podcast, spread
• 16:20
  Kia: the word, and help others get a little bit richer
• 16:22
  Kia: too. Keep up with the show on TikTok and Instagram at Legal &
• 16:25
  Kia: General. Thank you for listening. See you soon.