Raising a child to the age of 21 is now reckoned to cost hard-pressed parents over £200,000!

That's the conclusion of insurer LV=, which has been carrying out this survey every year since 2003. This year is the first time the total has gone past the £200k barrier.

Where does all the money go?

According to LV=, the following categories account for the expenditure:

The total adds up to £201,809 - an increase of 4% on the same survey last year.

Perhaps those who are already parents aren't too surprised, but Mike Rogers, LV= chief executive, suspects that "many new and prospective mums and dads will be a little shocked to see the potential financial burden ahead of them."

You're not kidding, Mike!

Leaving aside the question of whether these really are 'average' costs (£50k on education?), let's see if there's some leeway in that frankly frightening figure.

Some less expensive alternatives

Childcare

We're sure many parents are able to opt out of prevailing childcare costs for a simple reason — grandma or grandad. The figure is so high because it assumes both parents working, paying nursery fees, after school clubs and holiday clubs.

One way that mums returning to work can do so without high childcare costs is to train for the education sector, where hours and holidays are a better match for children.

Holidays and fun days

49 per cent of parents say they've cut back on days out and treats, and unfortunately for the tourism industry, this is the first thing we'd cut back on too. However, there's no reason you can't cut costs by holidaying closer to home (see last summer's tongue-in-cheek guide to staycationing…)

Furniture

We presume they're including furniture for children's bedrooms and play areas, rather than replacing worn-out / damaged / food-stained furniture around the home?

The latter we're counting as inevitable. The former can be cut right back: every day, teenagers in your neighbourhood must be clamouring to get rid of furniture they've grown out of, so try your local Freecycle group to pick up second hand versions for nothing.

Food

There are lots of ways to cut back on that £17,490 for food, without resorting to cheap junk — or missing out altogether on treats. Think ingredients instead of than ready-made. Think ahead: make double for tomorrow, or portions for the freezer (and for packed lunch). Think about soups: they're filling, they can be home-made from almost any vegetables, just add some decent bread and you're away.

Clothing

Clearly this isn't just keeping up with the latest trends: the problem is the speed at which children grow up. However, a generation ago this would have been dealt with through hand-me-downs — a recession-friendly measure if ever there was one, saving approximately 100% on buying brand new.

Pocket money

According to the LV= survey, children are noticing the financial pressures on their parents and are willing to accept a freeze or a small cut in pocket money. If that seems just a little mean, you could always encourage them to do jobs for it (e.g. helping out with cooking, if you're now taking extra time to peel and chop your own ingredients).

To encourage your children to moderate their demands, here's one way to make pocket money go further: pay it directly into your child's bank account. Every grown-up knows that readies disappear faster than money in the bank; your children can think a little more carefully which purchases are really worth withdrawing pocket money for.

A way to make child rearing money go further

The problem with these child rearing costs is that there's no catching up on them once you get started. Unlike a mortgage, they won't go down over time: from Year 1 to Year 21, there are always new expenditures to be met. Especially if you hope your kids will be university-bound.

This is why we'd suggest some form of regular savings account, allowing your provision for children to gain ground on inflation (see the compound interest section of this story for why regular saving is a great idea).

I'd consider putting the following strategy in place:

• budget for likely income vs expenditure, without taking into account child benefit
• look at your expenditure list and cut it back 10% through the tips above (and the comments below?)
• put 100% of the child benefit into a regular savings account

It's not a definitive answer to the "where to find £200k?" teaser posed by the LV= survey, but it might just cushion you from some of the financial insanity that is modern parenthood.

All comments welcome — from parents and non-parents alike!

Fixed price energy customers: this is a wealth warning!

If you opted for an energy tariff with a fixed price that expires in 2010, you need to review your options today - before you get stuck paying way more than necessary.

During the energy price surge of 2008, many households switched to a 'capped' tariff to protect against increases of 30-40% in gas prices. Now, as those caps come to an end, you face two different ways to get stung in the wallet:

1. Getting automatically moved to another capped tariff - with a 'get out' fee of up to £70
2. Seeing your prices soar when you get your next bill.

It's time to act: check when your current energy tariff expires, make sure you don't get sucked in to another one, and get ready to switch.

Mainstream energy prices are currently a rip-off…

This probably confirms your suspicions anyway: you are being charged far too much for your household energy supply.

When fixed price tariffs were all the rage in 2006-2008, that's because energy prices were climbing at a steady and sometimes alarming rate.

This winter, however, wholesale prices (i.e. what your supplier has to pay for gas and electricity before distributing it to you) have dropped considerably. Take gas, for example: the wholesale price dropped to below 40p per therm at the end of 2009, compared to more than 100p per therm during summer 2008.

However, instead of passing the reduced prices on to you, suppliers have taken the opportunity to raise margins instead. The effect of this can be seen in the results gleefully published to their shareholders last week — for example:

• Centrica, the owner of British Gas, reported approximately a 50 per cent increase in 2009 profits to £550 million
• Scottish Power, owned by the Spanish energy giant Iberdrola, announced an 8 per cent rise in profits to £1.3 billion last year, despite shedding more than 100,000 customers in the UK

Let this be a motivation to act.

New fixed-price tariffs could be two kinds of rip-off…

If your energy company sends you a letter saying they are rolling you over to a new fixed-price tariff, consider that an alarm bell.

The cost of energy is currently falling — so fixed-price tariffs are not a good idea for money saving at the moment.

Energy companies know this, so they may not be likely to tell you openly. First, they are allowed to notify you of price rises up to 65 days after they occur (this unfair rule might change soon, but for now it still stands). Second, thousands of British Gas customers have complained that the notification letter looks like junk post: many threw it away.

Another reason to avoid getting 'rolled over': many of these new capped tariffs have exit fees. If you want to switch, you'll be liable to pay up to £35 per fuel (£70 total).

This is another good reason why not acting today could cost you money.

Sticking with your regional electricity company is a rip-off…

Despite a decade of savings to be made through energy switching, it's estimated 33% of domestic electricity customers remain "faithful" to their home supplier.

If only they were that faithful to you. Energy companies charge more to loyal customers in their host regions than they do to customers elsewhere in the UK.

For example, nPower charges customers in Yorkshire 12% more than their average price across other regions, amounting to an extra £48 a year.

If this practice shocks you or seems unfair, that's because it really is time to compare and change suppliers.

What can you do about the 2010 energy price rip-off?

There's only one thing you really can do — but thankfully it's effective if enough people do it…

You have to switch.

Switching supplier makes no difference to your actual electricity and gas supply, just the billing and the prices. It's a simple exercise in market freedom.

- switch providers today and save up to £500 (based on Money Hospital readers' own results)

There is a price war out there, so lower prices are a realistic possibility. But with the "Big 6" energy companies dominating the advertising, you might have to look a little further than British Gas, nPower or E.ON for competitive tariffs.

Use our seven steps for avoiding the 2010 energy price rip-off:

1. Open all letters from your energy supplier. If tariffs and prices are mentioned, pay close attention.
2. If you're on a fixed price tariff, find out when it ends (so you know when to act, if not right away)
3. …and find out what prices you'll pay when it ends (so you can do an accurate comparison)
4. Calculate how much you could save by switching supplier - using your upcoming price, not the previous fixed one.
5. Consider electricity and gas separately (if necessary, calculate again)
6. Do it today!
7. Don't delay!

- use our energy calculator to switch and save

Cardiff-based Principality Building Society celebrates its 150th birthday this year. Unlike many building societies, it starts the new decade in a position of strength.

At a time when the mutual sector has been struggling, Principality has grown its business, attracted savers and firmed up its balance sheets. It also features in many product best-buy tables, attracting mortgage business from across the whole UK.

Selling directly and through mortgage advisers, Principality's mortgages have been keenly priced during a tricky 2009 for homebuyers.

An eye-catching current offer is the two-year fixed rate for 3.89% (4.99% standard variable rate, 5.0% APR) with £0 in fees — making it one of the only lenders with no arrangement fee on a low rate product. Alternatively, you can pay a £499 fee and get a starting rate of 3.59% on the same deal, which should save you money after a year or two.

Find out more about Principality and compare their mortgage rates »

With Valentine’s Day out of the way, summer wedding plans are now getting into full swing. But who can afford a big Beckham-style bash nowadays?

Please don't accuse us of being unromantic, but we think 2010 could just be the year of the extreme budget wedding.

We look at the six big expenses of a wedding day and how you might use a bit of budget know-how. Expect some, uh, creative suggestions…

Wedding photos

Sensible: It's always best to hire a tame snapper; do your friends have anybody in their social circle who'll offer "mates' rates"? Alternatively, try the local arts college for anyone on a photography course who's hoping to build up their pro reputation (and yet to build up their pro price list).

Extreme: There's an even better way to harness your friends' know-how. Invest £100 in a prize, then hold a photo competition among your guests! You're guaranteed hundreds of submissions, and instead of an hour away from the party, you can pose as long as you like while still enjoying the vibe with your friends. Then get your entrants to upload their shots directly to Photobox.com where you can print out the 40 best ones for free!

Dresses

Sensible: Instead of a brand new dress with a £1,000 price tag, why not look on preloved.co.uk for a second-hand version of your preferred design? If it fits your figure well enough, it'll certainly help fit the slimmer budget. Or if you prefer brand new, Oxfam bridal departments deal in donated dresses, 95% of which are unworn (just the trick for bridesmaids' dresses too).

Extreme: Why not incorporate a common wedding list item and just be married in a white dressing gown? Combine it with some tasteful underwear (just in case guests get an unplanned glimpse) and you'll also be one degree readier for the honeymoon…

Reception venue

Sensible: All you need is a big enough space with room for eating and shimmying, right? In summer, you've a reasonable chance this could even be outdoors. A marquee, a bit of flooring for a dancefloor, and away you go.

Extreme: Why go to all the hassle and expense of bringing your guests to you? Have you never heard of video conferencing? Set up a video cam, email out a link and others can join you ("in spirit", of course) as you broadcast your nuptial extravaganza from the living room…

Catering

Sensible: More than half the reception expense is providing a sit-down meal. Even a finger buffet can cost over £20 a head. You could always invite the local mobile doner kebab man to come and make a whole night's business during the day for a change?

Extreme: The key word is 'participation'! If you make it a bring-and-share occasion (Americans call it a 'potluck wedding'), everyone can enjoy the chance to contribute culinary talents to the occasion while cutting your biggest bill at a stroke. But we don't suggest you ask them to bring cutlery and plates too – that just looks a little too cheap…

Honeymoon

Sensible: Opt for an off-season wedding and leave your planning 'til the lastminute(.com) to take advantage of highly discounted travel offers

Extreme: Let's face it, you need two very basic things: privacy, comfort… sounds a lot like home, right? If everyone thinks you're away anyway, why not fill the fridge with ready meals and just leave the phone off and the curtains closed?

Rings

Sensible: Instead of the crazy money that is today's gold and platinum prices, go for a non-precious metal such as titanium (usually made into aircraft) or tungsten carbide (often found in drill bits, but still polishes up a treat). Some extremely fashionable designs are available for around £100, or a plain band can cost as little as £40. You could even be a style radical and go for black zirconium?

Extreme: Tattoos! For £20 each, you can have just the same fun choosing "his and hers" designs as you would do with a piece of metal. They'll never need re-sizing and they won't go 'clink' on the banisters. Better still, you never have to worry about insuring or losing them.

Some of these ideas might not be your cup of tea champagne sparkling wine…

…but we're sure there are many of you daunted by the average £15,000 spent on last year's "big day", and we'd love to know what you think! If you’re getting married, how are you planning to cut your costs creatively?

Suggestions, questions and objections in the comments below…

With premiums on a seemingly unstoppable rise, it's never been more important to know how to save money on car insurance.

However, price may not be the only factor. If it comes to a claim, you'll be far happier if you make sure your cover is adequate from the start. Not all insurers are equal!

Our latest guide from Mark Churchill will look at the basics, explain why price comparison sites are not always the best option, and cover some important money-saving pointers.

Click here to read our guide to car insurance »