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The Cost of Raising Children - How to Plan For Your Family

Updated: Aug 4, 2023

cost of raising children

We have several parents within our ActOn Wealth team, so we know first-hand what a joy it is to have children. However, we also know the little terrors come with quite a price tag, one that sticks with us until they are well into their late teens, if not beyond…! Whilst none of us would have it any other way, it is important to understand these costs so you can prepare, plan and provide for your family. And we’re here to help you do exactly that!

Before we look at how to plan, let’s first get our heads around how much we have to plan for.

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

If you ask any parent, the answer is probably “a lot”! Data varies; however, a 2018 study by the Australian Institute of Family Studies suggests the figure lies somewhere around $340 per week for two children (a ten-year-old boy and a six-year-old girl), which equates to $17,680 per annum.

What are the biggest expenses when raising children?

If you’re in a partnership, it’s not a simple case of dividing your expenses in half and saying a new child will be that figure added on top. Kids come with customised costs! We are definitely not here to dissuade you from having children. On the contrary, we will look at how to make this a smooth financial experience. But it’s always good to go into these life changes with eyes wide open! Some of the bigger ticket items include:

Setting up the nursery

If this is a first-born child, you have to accommodate a host of never-before-seen items in the house, such as a cot, nursing chair, pram, car seat, feeding equipment, clothing and more. A 2019 report from Westpac estimates the annual cost for the first four years of a baby’s life is $7,918.


Restaurants that market to families by letting kids eat for free fascinates us. Do they really know how much these tiny tackers can put away, especially when they discover sport and start to burn energy - and grow - at a rate of knots?


Speaking of growing, kids just don’t stop! The pace at which they can move through shoe and dress sizes can give us adults whiplash. Whereas we might need to update the wardrobe occasionally or compensate for a bit of weight gain or loss here and there, kids are just on a perpetual growth spurt. We’re not just talking about everyday clothes, either. For example, the private and public education systems have suffered bad press over the years for the cost of compulsory school uniforms (which need to be updated almost annually based on some kids’ growth rates).


Whilst we’re on the subject of school uniforms, we cannot look past the cost of education, even if you plan for your child to go to a state school. The cost of sending your child to school for 13 years of Government education is $68,727, or $298,629 for independent education.

Child care

Speaking of bad press, every BBQ you attend that includes parents of young children will invariably involve a discussion around child care… And just how crippling it can be. Australia has one of the highest child care rates in the OECD. Although figures vary from state to state and from city to region, this is still a major expense to family households. Obviously, the form of child care varies (e.g. daily, long-term care versus occasional babysitting). However, this summary from Care for Kids shows upwards of $188 per day for long-term daily care through to $45 per hour for a professional nanny.

Medical bills (especially dental, all the necessary jabs), transport and recreation are also doing a lot of the heavy lifting.

How can you prepare for the cost of raising a child?

OK, when you add all these figures, they still don’t come close to the priceless feeling of being a parent, right? Nobody can put a figure on a little one’s head. As parents, we fully concur. However, as financial advisors, we know that feeling is even better when finances are on your side.

So, how can you prepare for the cost of raising children? First of all, you can contact us for a no-cost initial consultation. We’re family people ourselves, and we’re here to help you enjoy the experience and feel confident about it. So touch base with us, and let’s find out the best specific plan for you. However, meantime some general solutions might be:

Consider protecting your wealth with life or income insurance

Nobody with dependents wants to get sick or involved in an accident. However, tragically, life happens, and poor health or misfortune can befall any of us, no matter who we are or how many dependents we have. As parents and wealth creators, we put this at the very top of the to-do list for new families. Paying that extra $X per month might seem frivolous when there are so many other expenses rolling in. However, consider the alternative. How would your family cope if the unthinkable happened?

Government paid parental leave

You’ve undoubtedly looked into your employer’s paid parental leave, but what about Government paid parental leave? The Australian Government Parental Leave Pay Scheme offers eligible employees up to 18 weeks’ PLP, paid at the national minimum wage to whoever is the primary carer. It’s essential to focus on those three key words - national minimum wage. If your salary is above this figure, you’ll likely be taking a hit. So, it’s crucial to put in place some ‘buffers’ sooner rather than later so that you can ride this out. We’re here to help identify where those buffers are and to prepare a financial plan.

Is childcare viable?

Many of us automatically think that, in the scenario of a two-parent household, both should return to work asap and maximise the household’s income. But it might not be as clear-cut as that. Indeed, if you live in a capital city, then chances are that childcare is hard to secure and can come at a crippling cost. If one parent is happy to remain at home, it might work out to make more financial sense. However, if you are a one-parent family, childcare won’t be negotiable - you likely have to secure it. More and more parents are turning to innovative solutions like hiring a nanny across numerous households. Whatever your situation, we’re here to help find a solution, so let’s chat. We understand this can be a particularly stressful cost but let’s work it out together.

Is it time to fix your home loan rate?

If you have a mortgage with variable interest, now might be the time to consider locking in a fixed rate… At least until you’ve chartered these unknown waters and, as a family, have your head around costs.

Start putting away now for education later

It can be a huge help to start saving for child fees the moment you know bubba is coming. Putting away a bit here and there before the serious education bills begin to roll in can help cut some slack. We can work with you to ensure this is not a current cash flow burden. Indeed, you shouldn’t feel the pinch now, but you’ll undoubtedly feel it down the line if you don’t put plans in place!

What bills can be paid monthly instead of annually or quarterly?

Review the big-ticket expense items coming in and the frequency you pay them. Is it more achievable to increase the frequency of these payments but decrease the cost each time? This avoids the family getting slugged with some really big bills, like quarterly energy fees or annual school fees.

Contact the best financial advisor in Melbourne about planning to raise your kids

We don’t profess to be experts in parenting, but we certainly have the skills to plan financially for the job! We want this to be a positive, joyful experience for you and your family. So, let’s meet for a no-cost, no-obligation discussion and see what we can do to help you plan for a tiny tacker or two tearing around your home.

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