Raising children costs money and some parents are finding this expense quite shocking.
According to research recently published by Santander, many parents are struggling financially with childrearing.
Fifty-two percent of the parents responding to the survey state that childrearing costs have significantly increased in recent years.
Forty-one percent believe that being financially prepared for childrearing is nearly impossible.
The Shocking Truth
Even more concerning than these statistics is the fact that five percent of respondents said that had they been aware of the costs involved in childrearing, they would not have had children. That equates to one in every 20 parents surveyed, a troubling figure. The resulting population decline could have serious effects for the economy as a whole.
According to the study, the monthly cost to raise a child averages £537. Food and childcare are the largest monthly expenses and are also two things that children cannot go without. Parents must find ways to cover these costs and this may mean taking secondary employment or limiting their own food intake so children do not go hungry.
Though low-cost childcare may be available, the arrangement should not compromise the treatment, development, or safety of the child. Unfortunately, far too many parents select a nonprofessional caregiver and suffer the consequences when children are injured or die while under this care.
Life Insurance Parents & Beneficiaries- Planning for the Worst
Parents want the best for their children but they should plan for these youngsters to be in the worst situations possible. This requires establishing financial safeguards for children should one or both parents become critically ill or die.
Unfortunately, the Santander survey revealed that 26 percent of parents did not have critical illness or life insurance in place. Parents may not want to think about becoming ill or dying but they should because otherwise, their children will suffer.
If anything happens to a parent, the remaining family members will need a way to support themselves. A surviving parent may not earn enough income to provide the family with the same lifestyle. Some families feature a stay-at-home parent and if this individual is the surviving spouse, there may be no income to live on.
If both parents die, children will be left without any money to pay for necessities or university education.
By purchasing life insurance and naming a surviving spouse and children as beneficiaries, a parent ensures that loved ones will be financially sound in the event of his or her death. Beneficiaries will receive a lump sum payout that can be used to cover funeral costs, living expenses, childcare, and higher education expenses.
If this money is not immediately required, it can be invested or placed in a savings account to earn interest.
Thinking about someone other than yourself is part of being a parent. How children will manage financially if one or both parents die is a consideration that should take place now rather than later. The younger and healthier a parent is when purchasing life insurance, the lower the insurance premiums will be.
If the policy is written in trust, beneficiaries may be able to avoid inheritance tax. Insurance professionals help parents find the life cover that accommodates their budgets and provides the benefit that children will need.