You and your partner may be contemplating having children and are wondering what impact this decision will have on your finances. In this article, you will find out in which areas of life your costs will increase as you raise your child.
How much will having kids impact your finances?
Childcare
Many Australian families rely on childcare to take care of their kids when both parents are working. The cost of childcare is currently around $90 per child per day. Considering that many children attend day care for several years, this can really add up.
Having one parent stay home to take care of the child could alleviate this cost but not every family has that luxury. Once the child is past the age of five, though, this expense goes away.
School
If you decide to put your child in public school, then education is essentially free. If you opt for private school, then you are looking at approximately $40,000-$300,000 per child from Kindergarten up to year 12 - note this varies significantly by school. That total is inclusive of uniforms, transport and extracurricular activities. For children in public school, parents will also need to pay for textbooks, uniforms, sports, etc which add up to about $900 a year.
Education-related costs typically increase as the child grows older up until university graduation.
Food and Clothing
Between birth and the age of two, children do not eat much food and, therefore, do not constitute a major change in your food budget. However, food consumption increases as your child grows older in order to fuel their changing bodies and soon you will have to food shop for three. This becomes a major cost and adds another around 30 per cent to you and your spouse’s food budget.
Clothing is a cost that is constant as children grow. Unlike adults, children are always outgrowing their clothes and regularly need new clothing. As children grow older, they may seek to express themselves through their dressing which may lead to higher costs.
Recreation
This is a cost that largely depends on the choices that you make as a family. If you choose to travel or spend large amounts of money on the latest gadget or toys then your costs will skyrocket. However, there are a number of low-cost recreational activities you can indulge in that put a greater emphasis on quality time together and that will help you to keep recreational costs in check.