New parents taking out loans to cover baby costs

An increasing amount of young parents are dipping into their savings to cover the cost of daily essentials like food and baby supplies, according to a…

An increasing amount of young parents are dipping into their savings to cover the cost of daily essentials like food and baby supplies, according to a study by nursery retailer Mamas & Papas.
The report found that four in ten parents are doing so, as they struggle to make ends meet in the difficult economic climate.
In order to pay for their daily living expenses parents are not only going into savings, but are putting themselves into debt by taking out loans. The research found that 20 per cent of respondents were taking loans from banks, with a further 28 per cent borrowing money from their family and friends.
New parents mostly want to save for their child's future, however most of the respondents were very worried about how they would do so given their current financial situation. As much as one in three new parents are now more concerned about how they will pay off their debts.

Parents with children under the age of two are the most likely to feel under financial pressure as bills mount up. Some 56 per cent of them were anxious about their income and finances, with 19 per cent saying they increased their household debt. On top of this, their relationships are becoming more strained, with 22 per cent saying they argued about money with their partner or other family members.

Of these particular parents, 27 per cent said they had been forced to stop saving for their child's future, while 32 per cent admitted to using prior savings to get by.

Creative and brand director of Mamas & Papas Olivia Robinson said: "As parents we understand that mums and dads worry about what they need to buy for their new baby and how much it's going to cost."

Raising a family is a costly experience for any parents, and it is only made more difficult when in debt. One solution to this could be to put all debts together into one debt consolidation loan, which could help lower the monthly outgoings on debt, freeing more money to spend on daily expenses associated with having children.

By James Francis

Find out more about money management on the ClearDebt blog.

Tell others:

shortlink