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How much does it cost to raise a child in Australia?

5 minute read
Mother with baby writing on a notepad in front of her laptop.

Afternoon naps to nappy changes. Night clubs to sleepless nights. Your favourite Spotify playlist to ‘Baby Shark’ on repeat. There’s no denying it: becoming a parent changes everything. And, while having a baby will provide you with countless experiences that money can’t buy, it’s still an expensive business.

According to the Australian Institute of Health and Welfare, over 300,000 babies are born in Australia every year. With more and more families adapting to life with little ones, let’s run through a few significant milestones to help you calculate the likely cost of raising a child in Australia.

Parental leave

Generally, the financial impact of having a baby begins well before your bundle of joy is born. A significant first step for any parents-to-be is to think about parental leave. How much leave would you like to take? What can you afford? How will you manage any debt? Will your partner be taking time off too?

It’s important to remember that your little one won’t just cost money to look after; you’re also likely to receive a reduced income from one or both parents depending on the arrangements you choose to make.

Parents in Australia are entitled to both paid and unpaid parental leave, but you will likely be earning less than when you were in paid employment. A good first step is to create a budget with your current income and expenses and then track your spending for a few weeks.

Then, add in details about the expenses you can expect to pay once the baby arrives – think about everything from a baby monitor to a bassinet and bibs – and see if your reduced income can continue to cover costs. If not, take a look at where you might be able to cut back.

Childcare

For many parents, going back to work after a maternity or paternity break can be a difficult decision, but it’s usually financially necessary for one or both parents to resume their employment.

Returning to work will likely mean that the household income is increased, but when figuring out when to take the leap, consider the likely cost of childcare for your little one. There are many different types of childcare to consider, and they all range significantly in cost.

Care For Kids has a tool available to help you calculate the approximate cost of your preferred option. There are also government benefits available. To find out more about the benefits that may apply to you, check the Australian Government’s Family Assistance Guide.

Mother walking daughter to school.

Education

Giving your child a great education is top of the list for most parents, and whether your child attends public or private school, the ongoing cost of education is something to keep in mind. Aside from any tuition costs, there are also uniforms, sporting expenses, extracurricular activities and school excursions to think about. Not to mention lunchboxes that need filling. Ultimately, the cost of your child’s education depends on a number of factors, so if you’d like to find out more, ASIC’s MoneySmart site has plenty of information on calculating how much your family may need to save.

Living expenses

Finally, there are the everyday living expenses to consider, which can quickly add up. Research suggests that in 2016 the average couple were spending $1,833 per week with children under five and $2,085 per week once their children were between 5-14 years old.

Holiday costs increase too, with the average family in Australia saving $77 per week for their next trip away, according to the same study.

So, how much does it cost to raise a child in Australia?

According to the NATSEM Income and Wealth Report from 2013, for a middle-income family in Australia, the cost of raising two kids, from birth to when they leave home is $812,000. If you’re a higher income family, this figure increases to $1.09 million whereas a lower income family can look to spend $474,000. As the cost of living has increased since this report was released, you can expect these figures to be even higher in 2019.

Safeguard your growing family

Having children is the most remarkable and fulfilling experience, but it’s also a significant financial commitment. The reality is that you’re now sharing your life, your assets and your debt with your family, and it’s important to ensure you’re all protected from the unexpected. By preparing for the unthinkable with the right insurance cover, you’ll have the peace of mind that comes with knowing the life you’ve worked hard to build for you and your family is financially protected.

Don’t leave your lifestyle to chance; find out how easy it can be to safeguard your loved ones and protect yourself from the uncertainties of the future with nib Life Insurance and Income Protection*. Get a free quote today to see how affordable getting covered can be.

*This information is for Australian residents only and may be subject to change.

Any advice is general in nature only and does not take into account your financial situation, personal objectives or needs, so before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision to acquire or to continue to hold nib Life Insurance or Income Protection, you should read the Combined Product Disclosure Statement (PDS) and Financial Services Guide (FSG).

TAL Life Limited ABN 70 050 109 450 AFSL 237848 is the issuer of the life insurance benefits, and St Andrew's Insurance (Australia) Pty Ltd ABN 89 075 044 656 AFSL 239649 is the issuer of the Involuntary Unemployment Cover available as part of nib Income Protection. nib health care services pty ltd (nib) ABN 91 003 037 625 is an authorised representative (AR Number 321683) of TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260, which promotes these products. nib does not guarantee or accept any liability under nib life insurance products or income protection products.

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