The cost of raising kids in Australia

Every parent will tell you that there really is nothing comparable to raising a child. The good, the bad, the in between – it’s an experience like no other. But aside from the incredible memories you create together, being a parent comes with significant financial responsibilities. That’s why being aware of the potential costs can help you plan accordingly and protect your family's financial future.

What parents need to consider in terms of real-life costs

Soon-to-be parents or those considering starting a family may be worried when they see the actual statistics of how much it costs to raise a child in Australia. According to data from the Australian Institute of Family Studies, even low-paid families are estimated to be spending at least $340 every week on raising a six-year-old girl and 10-year-old boy.

While estimates vary wildly, the Choosi Cost of Kids Report 2023 shows the average annual cost of raising a single child is $12,823 per household.

The actual cost will depend on many different factors. For example, age, where you live, income level, your family set-up and support network, whether your kids are in childcare, public versus private school – and many more considerations. Here, we look at some of the most compelling factors revealed in the latest Choosi Cost of Kids Report 2023.

Parents recognise a number of big costs – but still underestimate the reality

All the usual suspects are top of the list for most parents when it comes to what will hit their pockets hardest – childcare (55%), nappies and hygiene (55%), safety car seats (47%) and of course food and groceries (46%).

After the post-birth honeymoon stage wears off, many parents responded to the report by saying that they underestimated the extent of many of these ‘expected’ costs before starting a family, with the most significant being:

• Childcare 38%
• Education 36%
• Food and groceries 35%
• Nappies and hygiene 30%
• Hobbies, clubs and extracurricular activities 29%

The great unexpected

While it may be easy to stomach the costs you expected in parenthood, it can be more challenging when unexpected expenses start eating away at your bank balance. According to the Choosi Cost of Kids Report 2023, some of the biggest surprises didn’t actually relate directly to children, with lost income, career momentum and potential (29%) sitting near the top of the greatest unexpected costs.

Other top mentions included:

• Growing out of clothes and footwear so quickly 34%
• Lessons, tutoring, school trips and other extracurriculars 27%
• Unplanned healthcare costs 27%
• Birthdays and social events 24%

Celebrations are getting very expensive

Life in general is getting more expensive by the day. Inflation, interest rate hikes, housing prices rising yet again – and so too are the price of gifts and parties for Aussie children. According to the report, parents are forking out hundreds of dollars every year for birthday gifts and parties, with gifts for the festive season sitting at a whopping $582 annually per child, on average.

But it’s not just celebrations for the kids that are costing parents money. In fact, the report found that the average cost of a babymoon is just under $2,000 while baby showers cost a little less than $600. In total, Australians are spending more than $158 million every year on babymoons and baby showers.

Cost doesn’t always have a dollar sign

Beyond the monetary expenses, what many parents realise once their kids are born is that the true cost of raising their little ones is the impact it has on their time, their work and their relationship with their partner.

According to our Choosi Cost of Kids Report, parents spend an average of 35 hours a week taking care of their children, amounting to more than 6 billion hours annually Australia-wide. Then there’s the parental pressures on work, with the majority of parents (56%) saying they have had to reduce their working hours or seek more flexible working arrangements after having children.

Protect the life you’re building for your family

While everyone’s circumstances are different, there are a few important considerations that parents will need to make to help secure their children’s futures.

According to the report, while less than one in 10 parents consulted a financial expert before having children, nearly two in five (39%) have already set up a will or family trust to secure their children’s financial situation should anything happen to them. Over a quarter (26%) have also purchased or increased insurance such as a life insurance policy when starting their family.

Plan ahead, be aware

Raising a child can be an incredibly rewarding experience, but the financial burden shouldn’t be dismissed. From childcare and education to healthcare and daily living costs, expenses can quickly add up. The good news is that planning, being aware of the financial reality and creating a budget early on can help you be as prepared as possible for the responsibilities of raising a child.

It's also important to consider looking at ways to protect your family’s finances and the life you are building for your kids. Consider comparing a range of life insurance policies with Choosi – start comparing quotes today.