Does that £500 a month include rent/mortgage?? If so, where do you live? I'm moving!
Babies themselves do not cost a lot at all. You can choose to spend a lot if you wish but baby really doesn't care.
What does cost a lot is loss, or reduction, in earnings of one partner, childcare, bigger car, bigger house, if any of these things are needed.
Then as they grow, extra food, clothes, clubs, classes, school uniform, school dinners, school trips..........biggest expense always comes at the same time the washing machine or boiler breaks. Add wear and tear to house and appliances.
Then the optional screens, tablet/laptop/phone/games consoles, money for socialising, petrol to drive them about, bus/train fares.
Then holidays have to be during school holidays so you're paying for an extra person, or two, or more, during the peak time so holiday expenses double or triple what a couple would pay.
Then driving lessons, car/insurance, uni fees/rent......
Not saying all children need or even should have all of these things, but it's just things to consider, it's a lifetime commitment rather than how much a baby actually costs in its 1st year.
Oh and time, my god, they take up a hell of a lot of your time, whatever age they are!