At Lowell, we know that debt can be triggered by all sorts of live events whether that be health issues, separating from a partner or even bringing a new child into the family.
This is why, as part of our ‘Debt After’ campaign, we’ve surveyed new parents about the financial and social effects that come with bringing a child into the family.1 From feeling like they’re unable to give their child the quality of life they want to becoming isolated from friends and family, we want to raise awareness of some of the distressing issues that debt can have on a new parent.
Looking into our findings, the link between debt and mental health is clear with over four in 10 new parents (43%) admitting that they’ve struggled with their mental wellbeing at some point due to debt from a growing family.
It may also be unsurprising to learn that the mental wellbeing of new parents is being impacted in more ways than one. For example, our research discovered that 39% have actually ended up isolating themselves socially from friends and family due to their personal circumstances.
We know that feeling concerned about your finances can lead to all sorts of emotions. In fact, 36% of those we spoke to told us that their outstanding debt has led to significant tension between them and their family, friends, and partner.
A particularly shocking start we uncovered is that one in five new parents (22%) don’t know where to seek financial advice for their debt. At Lowell, one of our goals is to bring the financial struggles of new parents to the forefront of conversation, while minimising the negative stigma associated with talking openly about your finances.
Postnatal depression is said to affect over one in 10 new parents within the first year of giving birth.1 Combined with our research, this only emphasises how important is for the right support to be in place for new parents who may also be experiencing financial struggles.
For anyone who is struggling, it’s important to know that you’re not alone and there are various free and independent organisations that you can turn to for debt help and support.
Of course, it’s not just the parents that end up being impacted by debt but the entire family. Every parent wants to do the most for their children, but our research did find that 39% of respondents feel as though they’re unable to give their child the quality of life they want to. Perhaps even more concerningly, almost a third of new parents (32%) said that they can’t find the money to pay for essentials such as food and bills.
To try combat this, 20% have ended up taking on a second job to increase household funds. However, this then seems to have other potential knock-on effects impacting the whole family with 36% confessing that they struggle to spend as much quality time they want with their child.
Taking care of a baby can come with its own set of challenges and doesn’t need to be made more difficult by struggling with your finances. No matter what your situation is, there are always ways to plan out your finances, boost your income, and tackle debt as a new or future parent.
It might not initially seem like a way to boost your income but not only will paying back your debts take away some financial pressure, it will end up saving you money. If you haven’t yet become a new parent, use the time to pay back your debts now as this will mean that you have more spare cash to spend later on.
Don’t just ignore your debts or pay back the minimum amount as this won’t make a big enough difference to your overall funds. If you’re not in a position to pay a significant amount, focus on the most important ones. When it comes to figuring out which to prioritise, there are various organisations you can speak to for free debt advice such as StepChange and National Debtline.
At Lowell, we’ve got lots of guides which you might find useful including information on clearing your debt fast and how to get started with paying off your debt.
It’s important to have a good understanding of your current financial situation. A quick and easy way to do this is by using our own budget calculator tool.
All you need to do is input some basic details and we’ll give you an overview of your incomings and outgoings. That way, you can see where you might be able to save and what’s eating into your funds the most.
It’s also a good idea to make a list of essential purchases so you can get a better idea of how much you may need to spend.
Obviously, a growing household comes with additional financial responsibilities such as baby food, nappies, and even childcare. To see if your current finances could handle a growing family, MoneyHelper have a useful baby costs calculator to work out your baby budget based on your circumstances.
Aside from your current incomings, it’s always worth checking if you’re receiving all the financial support available to you. Whether it’s seeing if there are any benefits you’re missing out on or childcare help you haven’t claimed, it all adds up. To help make things a bit easier, be sure to check out our benefits calculator, powered by entitledto.
If you’re a Lowell customer and struggling to pay back your debt with us, please get in touch. We understand that having children may have changed your circumstances and we want to work with you on your journey to becoming debt-free with Lowell. For more information on how we work at Lowell and other interesting research into finances, check out the Lowell blog or our Debt Guidance Hub.
Published by Stephanie North-Shaw on 26th September 2023
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