Dear things? You don't know the half of it

Insurance

When money's tight and there are lots of immediate needs it's easy to overlook the long-term, says Chris Wicks, a financial consultant at Bridgwater Financial Planning, but you ignore life insurance at your peril.

'The breadwinner's life has absolutely got to be insured, because the conse quences are going to be disastrous if something happens and it isn't,' says Wicks.

Couples often neglect insuring the life of a non-working spouse, but this too is more vital than ever in a large family - imagine the cost of employing a full-time nanny and a cleaner and (quite possibly) an au pair or mother's help to take the place of a mother-of-five, and you'll see how crucial it is.

Term insurance, which pays out if the insured person dies during the term of the policy, is the cheapest life cover. There are several different types - level term costs the same amount and pays out the same amount throughout the policy, decreasing term reduces the payout during the policy and is designed to be used with a repayment mortgage, while the family income benefit policy pays a series of regular payments from the insured person's death until the policy ends.

Term insurance is one of the few financial products you can choose purely on cost. Ask your independent financial adviser for help in selecting a contract. Alternatively discount brokers such as TQ Direct (Tel: 0800 056 1838), and Direct Life & Pension Services will find you the cheapest policy and rebate some of the initial commission.

Education

The spiralling costs of living in a city with expensive housing and iffy schooling means sooner or later couples who've opted for four or more kids tend to move out. Out to where they can afford more bedrooms, a bigger garden, and where their children stand a better chance of a decent state education. 'Outside London, even if you end up deciding to educate one or two of your children privately, it's often a lot cheaper,' says Wicks.

But wherever you live, it's important not to forget the cost of seeing your brood through university. This now costs around £6,000 per child per year all told, and the way to pay for it depends on how many years you have to save, according to Jason Hollands of independent financial adviser Best Investment. He says: 'If you've got a short time to go, you should consider zero dividend preference shares, which pay a pre-determined capital gain on a set date.'

If you've got just one year before your child starts university, he recommends the M&G Recovery zero, which will yield a return of 7.2 per cent (tax-free if you haven't used your CGT allowance) on 3 April next year. If you have three years to go, he recommends the Govett Enhanced Income zero, which has yield of 7.6 per cent and pays out on 31 March, 2004. For a full list of zeros and their yields visit Best Invest's website, www.bestinvest.co.uk.

But if your children are young, you should consider equity investment through a unit trust or Oeic Isa. Hollands says: 'If you are investing for 15 to 18 years, you won't want to chop and change funds every year, so consider a low-cost index fund such as HSBC's FTSE Allshare tracker or a diversified managed fund such as Fidelity International.'

Transport

Transport eats into the income of a big family. Once your children number more than three, an ordinary car won't do any more. New people carriers can set you back £30,000 or more, and even for a second-hand big car you're usually talking around £10,000.

If you can't afford the outlay, consider a low-cost loan. Check out the cheapest deals online at www.moneygator.com or www.moneysupermarket.co.uk. Checking the costs of a £10,000 car loan over three years on the latter site produced an 8.7 per cent APR loan with Lloyds TSB Loan Direct, costing £315.08 a month.

Holidays

Holidays are another big expense. Karen Simmonds, who runs the Balham-based family travel specialist Travel Matters in south London, says the cheapest option for a family with four children aged between four and 10 would probably set them back around £1,400 for campsite accommodation in the Vendée region of France, including the ferry crossing in mid-summer.

'For those with a bit more to spend, a self-catering holiday in Corsica would come in at around £4,200 for flights, accommodation and transfers.' Cheaper still, of course, is to stay in Britain and hire a big house near the sea (out of season for a bargain) or even an entire youth hostel (really cheap, especially if you team up with another large family).

Food

If holidays are optional - and some, of course, would argue that they shouldn't be - the weekly shop certainly isn't. 'Don't go to Tesco's more than once a week,' is Wicks's advice. Buying in bulk makes a lot of sense, and eating pre-prepared convenience food is out of the question - an M&S ready meal for three or four might be OK as a blow-out treat, but for six or seven it's an impossible indulgence.

Clothes

When it comes to clothes you'd think a family with four or five children would be able to hand everything down and hardly ever go shopping - but you'd be wrong. Clothes bought new for child number one are usually faded for child number two, frayed for child number three and fit only for the bin by child number four.

Shoes are one of the scariest expenses of all: it's perfectly possible to pay £35 for a reasonable pair of school shoes for a six or seven-year-old, and you can reckon on at least two and maybe three pairs needed per child per year.

You can spread the cost by using a low-cost credit card. Capital One Bank ( 0800 952 5252) charges no interest in the first six months, then reverts to a higher standard variable rate so be prepared to switch cards again at that point.

Avoid taking out store cards, as these charge the highest interest.