If you’re considering bringing life into the world or have already taken on this responsibility, then one of your top priorities should be to determine the cost. There are many answers to this question depending on what lifestyle standard suits you best as well as your monthly income level.
While some people have the luxury of having ample money available, for many, it’s a struggle to pay bills and save up. This is why it’s important to consider all the costs when making decisions for your family. Compare the costs of staying at home with your kids versus paying for childcare to determine which is the right option for your family.
Key facts
- There are many financial factors to consider when raising children, such as food, clothing, childcare, education, and transport.
- You don’t have to do it alone when there are many resources to help you make the best decision.
- Before you have a child, it is important to plan your budget and pay off as many expenses as you can.
- There are various ways you can save money when it comes to raising children.
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What is the cost of raising a child in Australia?
We reviewed a couple of studies and found the estimates ranged from $159,120.00 up to $548,500.00 is the cost of raising a child up to 18 years. According to 2018 research by the Australian Institute for Family Studies, it costs low-paid families about $340.00 per week or $86 400.00 annually. In conclusion, for one child, that’s an estimate of $13 166.00 to $30 472.00 every year or as much as a quarter-million dollars over 18 years.
Average costs of raising a child in Australia
When you’re trying to calculate your budget and figure out how much money you’ll need to care for your family, you may want to take the following aspects into consideration:
- Food: While this depends on where you shop and the type of food you feed your child, while also depending on how old your child is, food can cost anything between $30.00 and $200.00 a week.
- Education: The cost of education varies greatly depending on the type you choose and where you live. For example, in metropolitan Australia, a child’s total cost for primary school is $25,025 if they attend public schools but it could be as high as $147384 when attending private ones. Similarly with secondary schooling: at $38k per year for public schooling vs nearly twice that amount ($319k) from private institutions.
- Clothing: Clothing can be more expensive than you expect as your child will require new clothing as they grow. On average, you can expect to pay anything between $8 and $33 a week on clothing and footwear.
- Transport: The National Centre for Social and Economic Modelling (NATSEM) has broken down the costs of having a kid by category, with 20 per cent coming from transporting your child around. This comes out to about $80k if you want them to go anywhere outside their neighbourhood or across town.
- Housing: The cost of having a baby and raising a family is pretty expensive. A 2015/2016 study by ASIC has shown that, on average, couples without children spend $1,572 to $1,833 per week when the couple does have kids under 5 years old and it goes up to as much as $2108 once their child turns five years old.
- Healthcare: Purchasing health insurance is vital when starting a family and raising a child as you never know what kind of medical issues, treatments, or services your child will require. The average cost of health insurance is around $4,547 a year for families. This includes pharmaceutical, hospital, medical, and extras services and products.
Benefits of paying for childcare
The household income will likely increase when the mother returns home from her extended leave, however, there’s also another cost involved in this choice–that being childcare for all those little ones.
- Regular schedules and routines
- Academic advancement
- Time for fun and socialization
- Smoother transition into kindergarten
- Independence
- Better behaviour
Benefits of being a stay at home parent
The decision to be a stay-at-home mom can have many factors in determining if it is the right choice. What your goals are for you and your family, how much parenting philosophy matters when making decisions of this sort, as well as what resources will enable or disable their choices all play into whether they should work outside the home on a full-time basis.
- Decreased childcare expenses
- Lower stress levels for kids
- Fewer behaviour problems
- Social support
- More family time
- Increased leisure time
Do you save by staying at home?
Families that have a parent dedicated to providing childcare can avoid the major expense of paying for expensive daycare providers. The cost of childcare has steadily increased, with working parents now pay an average of $143 per week in 2011. This includes payments made to family members which may be much lower than what is charged by institutions.
5 budgeting tips for new parents
Pay off your costs beforehand
As your baby grows up, so will the costs. Hospital bills are just a few examples of added expenses that come with welcoming a little one into this world. Be prepared for things to get more expensive now by paying off other debt than usual- you’re ready! You may also want to set up appropriate life cover before having kids so that you ensure that they are taken care of if you are no longer around.
Welcome second-hand items
Instead of buying expensive newborn baby supplies, ask your friends and family who recently had babies if they have any hand-me-downs they’d lend or gift you. If that doesn’t work for you, check out discount stores to find strollers, carriers, clothes at a fraction of the cost. You’ll also want to get pacifiers (or bottle nips), sheets and other items not worth reusing in order to free up budget space; putting more money into savings instead!
Prepare for all emergencies
The most important thing to remember when you have a baby is that accidents happen more often. If this were the case, it would be best if you always make sure your car and diaper bag is stocked with all of the essentials for any mishaps! Once a week, double-check each individual bag so that they’re ready no matter what happens next time. This will save you money as you won’t have to constantly purchase required items on the go.
Organise a family budget
Getting to grips with your finances is a tough but important step for ensuring you and the family are on track. Firstly, identify where money is coming in – such as through salary or investments- then work out how much cash goes into essential bills like mortgages, rent, food etcetera. Consider cutting back by reducing spendings that one might not consider ‘essential’.
Make savings a priority
We all want the best for our children, but we don’t always have time to make it happen. That’s why you need a savings account that will help your family save up and plan for their future. You might be surprised how much sooner they reach those goals with a better investment strategy in place! You’re planning on saving money now so your child can enjoy things like college later; however, there are many different options out there when it comes to investing these funds wisely (and not-so-wisely). So take some time today and figure out what type of investments work best for you before deciding which bank is the right one based on their rates alone.
Frequently Asked Questions and Answers
Is it better for a child to stay home or go to daycare?
There are many factors that come into consideration when deciding to have a parent stay at home or send their child to daycare. Sometimes, parents cannot afford for one of them to stay at home with the children while other families find quality childcare too expensive even if both parents work full time. For example, some people might be looking for financial assistance and others might not want someone they don’t know watching over their kids all day long.
Is it cheaper to have a babysitter or daycare?
Despite the high costs, daycare can often be cheaper than hiring a full-time nanny or babysitter. It’s important to choose your child’s daycare carefully because it will likely affect their emotional and social development for years following!
How Stay at home moms can live financially?
If you’re planning on being a stay-at-home mom, there are a few things you need to consider in order to survive financially. First, you need to organise a budget plan and have a way of supplementing income. It’s also important that you build a strong support system to help you when times get tough. Meal planning and thought-out shopping lists can also cut out unnecessary expenses.
Where is child care most expensive?
Childcare costs make up a significant proportion of many working parents’ outgoings. But how much you pay can vary considerably depending on where you live, the most expensive country is New Zealand with 37% going towards childcare for couples earning an average wage annually in 2017/18 data. There are only three other countries that have more than 30% of their couple’s salary go to childcare: Australia (31%), Canada and the USA (33%) and UK (35%).
How much does it cost to support a child per month?
Raising a family is expensive, but the most daunting cost might be that of raising children. It costs low-paid families $340 every week to raise two kids. That’s an annual expense of almost $170 per child, and a total cost of around an estimated $1360 a month for two children. With 18 years in total time spent caring for each kid, you’re looking at over 8 grand paid out just from your weekly grocery budget alone–not counting any other living expenses or college tuition fees.