It’s wonderful having kids! These little bundles of joy that love you unconditionally but have you ever stopped to think about what they’ll cost you? Probably not or else no one would ever have kids. Given now you have them and you’ll have to pay for them for the rest of your life, how are you going to do it?
The Federal Government estimates the cost of raising children from birth to age 18 costs on average $384,543 – Wow! However many researchers and even parents strongly discount this figure as highly inadequate. One social researcher believes that the current cost of raising a child is more like $557,013 for the average family, and that’s without taking into consideration any private or catholic school fees.
This figure takes into account costs from childcare, government schooling, housing and food, to proportional utility bills, leisure expenses, transport and clothing. It also extends the dependency years from birth to age 24.
The December 2010 Australian Bureau of Statistics report on social trends show children are financially dependent on their parents until 24 in Australia with those that do leave home earlier, tend to return home again at some stage. Sorry for the bad news but retirement will be all yours (oh except that you will then become a permanent babysitter for your grandchildren).
The good news is that two children is somewhat less expensive, only costing approximately $1,000,028 as most of the large out of pocket expenses such as cots, change tables, etc are already taken care of. Ladies, this could be a way to get your fella to agree to another child because really, it’s a saving of $113,998.
And then there is upgrading your child’s education to a private school. The Age reports that if you want to send your kids to private school from pre-school to year 12 with all the required extras like sports, clothing, transport etc, you can be expected to slug out half a million dollars. Catholic schooling is a little cheaper at $206,692, with public schooling at $65,484 (which I thought was meant to be free).
The cost of this self-inflicted joy (I say with a slight strain in my voice) of raising children can be significant so how do you manage it along with your own financial goals? Like anything else – Budget! There is no magic trick to it but there are some steps that you could do to reduce the fatigue on your wallet.
- Plan for the future – make a budget to achieve the main large scale expenses that you know will come, like school fees, university fees or maybe even a car if you can stretch it. JBS can help with this one
- Make sure that you are receiving all the government assistance that you’re entitled to, like Family Tax Benefit A & B, Child Care Rebate and Benefit, etc
- The most expensive point of a child’s life is the first 2 years then it flattens and slowly increases. The high start-up costs is due to all the new furniture and requirements so look at second hand or loan items like cots, change tables, bouncers, etc. And always have a baby shower to spread the costs with all your family and friends.
When a child is born most people would love a manual but they wouldn’t like a bill. That would almost be bad enough to make us hand them back.
Something to think about – while your kid will cost you on average $557,013, the average household will be earning around $3 million over the same period.
But surely the real cost of having kids are …. lack of sleep, stretch marks, stress, worry, communal toileting, never being able to shop for yourself, no more nights out, and never eating that block of chocolate that you had hidden in the cupboard. To all those people out there pregnant or thinking about having kids, Sorry! But from those of us who are knee deep in this financial situation, it is all worth it!
A Professional Post from Jenny Brown – Click Contact Jenny