The cost of raising children in Australia

Whether you are thinking of starting a family, already have a baby on the way, or are in the throes of parenthood, just thinking about how much children cost to raise can be overwhelming. Children have an impact on almost all parts of your life, especially your finances. From working out parental leave and adjusting to one income, through to making large purchase decisions, like a house, children have a huge impact on your finances.

According to the Suncorp Bank Cost of Kids Report, the average cost of raising a child to 17 years of age is over $297,600. This cost obviously changes from family-to-family and for different income levels, but no matter what, raising a child is costly.

So whether you are thinking of having a small or large family, it is important that you sit down and plan what that means for your finances. Here are a few tips to help you stay in control of your finances when raising a family:

• Understand your finances

It is important to review your financial situation. Budgeting isn’t everyone’s favourite activity, but it is important to understand where you are spending your money – especially if you or your partner are planning on spending an extended period of time at home. Running a household on one income might mean you have to tighten the spending.

Before you have your baby, take the time to understand your government entitlements and the parental leave policy at your work. It is important that both you and your partner do this. Many companies now offer paid paternity leave, and the government also provides “dad and partner pay,” which is an additional two weeks paid leave ($719.35 a week for up to 2 weeks) while you or your partner are on unpaid leave from work.

• Arrange childcare early-on

For some couples, having two incomes is a necessity. So childcare can be a costly part of your household budget, especially if you are looking at long day care options, which can cost as much as $192 a day.

Before you decide to go back to work, crunch the numbers and make sure it makes sense for you, both personally and financially. If you are in a major city or anywhere with a shortage of childcare, make sure you look into options early, so you aren’t limited in your choices when it is time to return to work. Also, take advantage of any government subsidies that you are eligible for.

• Understand the cost of education

Whether you are sending your child to a private or a government school, educating children always costs more than you expect – parents need to plan for much more than just tuition fees. According to the Australian Scholarships Group’s 2018 Education Index, educating a child born in 2018 is estimated to cost as much as $66,000 through the public school system, and up to $475,000 through a private school. So no matter where you decide to educate your children, it is worth building it into your financial plan early to ensure you can cover the cost.

• Plan for the unexpected

As your family grows, so does the number of people you are responsible for. It is important you have adequate insurance to ensure your family will be provided for, should something unexpected happen to you or your partner. Life is unpredictable; if you aren’t adequately covered, all your financial plans will go out the window.

• Account for kids staying at home longer

Gone are the days when parents reclaim their home when their youngest turns 18. According to the last census, 43.4% of 20-24 year olds and 17% of 25-29 year olds are still living at home with their parents. This may be good to help your children get a head start and save for their first home, but make sure you take this extended time frame into account when planning your financial future and saving for your retirement.

It isn’t always easy to make the right financial decision for you and your family. So make sure you take the time to understand your goals and what really matters to you and your family. From there you can create a financial plan that will help you live for today, while ensuring you are building your wealth for the future.

General Advice warning


The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.