How Much Does it Really Cost to Have and Raise Kids in Australia?
This question comes up regularly. I grew up as one of 5 kids, then when Mum passed away in my teen years, Dad remarried and I became one of 9 kids. I have four kids plus a stepdaughter (Ages 14, 13, 8, 1 and newborn), a few of my siblings have 4 kids each and the cost of children has varied greatly between all of us.
This post will cover common expenses (including medical or special needs), average expenses and how to reduce them. It is LONG but you can jump ahead to whichever section applies to you using the headings or images to quickly see what is relevant.
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Various studies in the past few years have shown the cost is anywhere from $286,000 to over $1,000,000. It depends on what you include (e.g. extra housing costs such as another room can be $200,000 more, though some studies focus only on clothing, schooling, childcare etc.)
In 2012, a study by the University of Canberra determined the average was $812,000 but under $500,000 for lower incomes and over $1,000,000 for higher incomes. Suncorp found the cost to be $286,000.
When you look at all the variables such as age, parents working vs not working (including the cost of superannuation and career loss for the at home parent), the financial cost can get even higher. However, having a child is generally not solely a financial decision. For me, it’s totally worth it and not something I factored in to my decision to have children.
Before you start, check to see if you are eligible for things such as family tax benefit, rent assistance, the childcare rebate or benefit etc. These can help a lot towards the cost of raising children.
We all have to live somewhere. Single people have options such as boarding with others, Couchsurfing, backpacking, hostels, work options with accommodation such as being au pair etc. All of which can drastically reduce your housing expenses. Some of this is possible with kids, however, most families opt for a home instead.
Depending on your location and income, budget housing can be things such as housing commission homes, social housing or co-ops (this is an example about housing co-ops). Alternatively, living rurally often means more affordable housing, though you need to factor in other expenses being higher such as food and petrol. Another option for single mums is Share Abode which we wrote about here.
Cheaper Rent and Mortgages
The first step is to rent or buy within your means. Recent years has made that seem impossible due to the unprecedented increases. Many areas that were previously affordable are not anymore. Families are moving further out but many remain homeless where I currently live.
At this stage, sadly, finding an affordable home might mean moving elsewhere. If you don’t want to move, you can look at using Airbnb to help pay the rent/mortgage. You can find my top tips here showing how I make money with it. Or get a boarder, rent out the garage etc.
My teenagers are Polynesian, play football, ride their bikes everywhere and eat more than any teeange boy I or anyone else I know have ever seen. Seriously, they eat more food than their male teenage friends. Yet they’re fit, slim and healthy so I am ok with it. My budget groaned as they got older though.
Check out 21 ways to reduce the cost of groceries in 2022 for my top ideas right now.
Also check out how to get free and super cheap groceries here.
If your teens can use their phones, they can cook! Teach your kids from a young age and it will save you both time and money.
One way to teach is by using the meal delivery boxes. Get a free HelloFresh box here. And 40% off your first box with EveryPlate and 20% off your next two boxes. Marley Spoon offers $100 off, split across your first 4 boxes as $40, $30, $20 then $10. Kids can follow the recipes so even if you can’t cook well, they can learn.
Cash Rewards and Shopback provide cash back. I have them all installed, downloaded the apps and added them to Chrome. This way, whenever I am shopping, I get the best deal.
Cheap Meal Ideas
Protein helps you feel full for longer and meat isn’t the only way to get it. Meals based on vegetables, beans, legumes etc all help. Dhal, curries, risottos, pasta bakes and similar are cheap as well as filling.
Avoid sugary foods as the sugar simply fills for a bit then you get a slump making kids hungrier (and probably hangry at the same time). Instead, opt for healthier options.
Buy fruit and veg in bulk at markets, check out the butchers at the closing time along with supermarkets for reduced items.
If they must have takeaway you can get $10 off Uber Eats with the code eats-kyliet591ue and always be sure to search for a discount code online before ordering from anywhere.
I have lived without a car in a few cities and had a car in others. Some cities such as Melbourne were easy to get around without a car, others such as Canberra were much harder. Check out how to live without a car for some ideas.
Always use fuel apps such as 7/11 and FuelMap to get the best prices on fuel. Combine errands so you only use your car as needed. Get your kids to ride their bikes places when they are old enough and check public transport or carpooling.
Options With no car e.g. Rideshare
While I haven’t owned a car for a while, I have used other car options. Car Next Door has been my favourite and most used option.
In general, though, we walk or use public transport. Find out more about living without a car here.
Saving Money With Your Car
If you want to keep your car, there are things you can do to reduce the cost such as locking in the price of fuel when you see it cheap through the fuel watch app.
Ensuring your tyres are inflated properly, you are using the correct fuel, your car is well maintained and you don’t drive around with unnecessary weight in the car (e.g. things you don’t need clogging up the boot).
On top of the day to day running of the car, service it and clean it regularly. Both of these things help with your resale value which is important. Find out more about reducing the cost of transport here.
Whether you go public or private, there are costs involved with educating your children. School uniforms, shoes, bags, lunchboxes, excursions, books, fundraisers, teacher gifts, school fees and voluntary contributions.
For a full guide on ways to reduce these expenses, check out how to afford school expenses. Also, be sure you are teaching your kids about finances to help set them up for their future.
When my kids were little it was easy as there were so many free options from the library to the park that were simple and they loved. As they’ve gotten older, their interests have gotten more expensive.
We’ve kept some free entertainment such as the beach, hiking, snorkelling etc. Football has increased in cost each year especially as my daughter is asked to play at a higher level. We also love to travel as a family but you can travel for free or super cheap and even make money by travelling as a family, both of which we do.
Look for Freebies
Your first step for entertainment should be looking for free things (check out our huge list of Aussie freebies and this post with Aussie birthday freebies). Encourage your kids interests and I am all for extracurricular activities, but as for family fun or things to do on weekends, look for free options.
Check out festivals and events in your area, do the touristy things, play at the river/beach/lake or in the bush if you have some near you. Movies and other expensive entertainment aren’t the only options.
If you do want to do movies and similar, look for ways to get free tickets such as through online surveys, using apps or market research. Always look for discount codes online or join loyalty programs too. We have a big list here of ways to get discounts or there are 12 ways to get coupons and discounts here.
Reducing the Cost
Can you volunteer with their sports to get free registration? Does your school offer programs or discounts for families to certain sports? Shop around clubs and compare prices.
For example, with Auskick for my kids when they were little, our club had a multicultural status with the AFL which made it free for all kids. Other clubs had fees.
In two-income homes, it is not uncommon for it to feel like one parent is working purely to pay for childcare. While it is expensive, in my opinion, it is important for both partners to maintain career options.
It’s not only the income you need to factor in but also superannuation with the compound interest effect it has the sooner you contribute. Career progression, staying relevant, your experience and qualifications all need to be included.
With childcare, shop around and look at all your options. I’ve used after school care, done childcare swaps with other mums, had an au pair and at another time a housekeeper. At each stage of our lives I have researched to find the most affordable option for our needs.
At times, due to our incomes an au pair or live out housekeeper picking up the kids (and doing cleaning etc a few hours a day until we got home from work) was more economical than after-school care so consider all your options.
Make sure you are registered for the child care benefit and child care rebate if you are eligible for it too.
This is where I have spent a lot as my kids needed speech therapy and other extra assistance, the autism assessment was $5,000 last year and of course, there are the regular things like medicine which are part of childhood.
Going public where possible, using your health insurance if you have it and claiming everything you can when you use it plus budgeting for medical expenses all help. Find ways to save on your health including medical, dental, glasses, ambulance cover and more here.
Birthdays and Celebrations
My kids have higher expectations than I ever did for birthday parties. Growing up we had a party every second year with friends and every year with family. Most were at home and fairly simple. At my daughters primary school, ice-skating parties were the most popular.
Hosting parties for your own kids, presents for other kids parties, Christmas and other celebrations all add up. The things which helped me were to have a clear budget, set the kids expectations so they know from the get-go what the deal is in your house for their birthday parties, the budget for friends presents etc then always look for ways to come under budget.
For birthday party ideas check out my sisters business Mini Peas for ideas (new ones going up regularly), plus you can purchase printables for the parties from her Etsy store.
Birthday Parties and Presents
My kids have often had home parties or we’ve done things at a venue our own way instead of with a specific party and kids have raved about it because it was different. A Monster High party a few years ago saw my sister and I dress up as dolls, we had makeup and nail stations, a fashion parade (with our dress ups) and simple games. She had kids begging to invite them the following year.
Last year we did a spy party in the park. I researched riddles for the area we were in which they had to solve, we did spy training, then they ate and played in the park. Kids came dressed in black as spies and loved it.
Another party we did was on level 55 of the building we were in and it had games like musical chairs, statues, pass the parcel etc. Everything was rainbow including the jelly which the kids at school were still talking about it 2 years later!
For presents, we buy them when on sale. Smiggle and similar stationery are popular in our area so we head to DFO and Kmart to stock up in clearances. So far, all presents have been a hit.
At all other schools the budget was around $20 with most kids, this school the parents have been spending $60 to $80! With the number of parties my kids get invited to, we could go on a holiday for that money. Buying in sales means we can do similarly priced gifts for a much lower cost.
Christmas and Other Celebrations
Considering most celebrations we know about ahead of time, they can be budgeting in. Christmas is at the same time every year, as are the sales so plan ahead. If it’s hard to stretch the budget, check out this post to show you how to easily get $2,000 in time for Christmas (starting in October).
Babies and Toddlers
My girls are 14 and 13 and now I have a 1 year old and newborn, so I’ve done this stage recently and over a decade ago. I saved money by purchasing things second hand, using hand me downs, buying only waht I needed etc. The car seat, pram and cot mattress were new for health and safety reasons but you can buy them on sale.
I used cloth nappies most of the time and sometimes Aldi disposables. Being unable to breastfeed for medical reasons I buy formula which I get on sale. My children all had issues so it was the more expensive reflux formula.
Overall, the baby stage was the cheapest stage. They grow so quickly you don’t need much. Get a good support network, swap items with each other and buy things on sale. Make your own baby food, check clearance racks for clothes or shop at second-hand stores and you won’t need to spend much.
A Few Extra Tips
We used the laundry sink for the baby bath then they showered with me as they got older. Living in a hot climate, they often don’t wear clothes at home. This reduces the washing too.
Baby food I made from fruit and vegetables pureed at first then mashed whatever we were eating until they progressed to eat what we were properly. You’ll be surprised what they eat and enjoy when provided with all the options.
If you think you need something, try borrowing it for from a friend or family member to see if you use it and really do need it or if it’s just a want because a magazine said it is essential.
Most articles focus on saving money when kids are babies or in primary school, which much of this article has as well. Some of the tips can be applied for all ages, but with teenagers and even adult kids (for example children studying) there can be significant expenses. Plus, if you are eligible for Family Tax Benefit, this is when it decreases!
Since primary school, my daughters needed iPads or laptops. In high school, laptops have become compulsory and the cheap ones don’t cut it.
Phones, computers, gaming devices, cameras and other equipment needed for various hobbies or school projects add up quickly. Shop around, ask the school if they get a deal with any particular store and always look at the insurance and protection options. Get cases, screen covers and other things to protect them from damage to help them last longer.
You can also look at refurbished or second hand options. While your kids probably want the latest and greatest, dropping $2,000+ for a phone and laptop might not be in your budget.
Clothing and Accessories
I’ll include make up, clothing, shoes and everything related here. Teens want what they want and it is up to you what you do. Some families have a set budget per year and it is up to the teens how they spend it. Others go shopping at certain times of the year or in sales. Whether you buy the brands they want or not is your choice.
My kids have very different personalities and like different things so I cater to that. They know we have a budget for different things and we work their wants into the budget. They’re also quite savvy shoppers themselves as I have taught them from a young age.
Sign up to loyalty programs and VIP clubs to get welcome offers, look for discounts online and include your children in the choices.
My teens also have their own jobs and various incomes now to buy whatever they want as well.
My parents gave us $1,000 (provided we saved $1,000+ ourselves) and a loan if necessary for a car. I bought a bomb and it died, I bought another one and it died too. Finally, I borrowed a decent amount from my parents and got a good one. Cars have cost me a fortune over the years.
Encourage your child to get their licence, invest in some driving lessons (it is incredible how many rules change and how much needs to be corrected for the driving test). Teach your kids to budget and save for a car. Or if you want to, you can choose to buy your kids one.
One note, I took better care of my cars than my friends did who were given one by their parents. Those who were given one all had car accidents or trashed the cars because they hadn’t worked for them. Personally, I plan on encouraging my daughters to save for a car, if they want one.
It’s your choice if you pay for university or other higher education. We have more affordable options than the USA and various scholarships plus interest free loans to help with education. Personally, I won’t be paying for my kids university. I’ll help for the first year or to get them started, but it is up to them.
Making More Money
Your income only stretches so far, but you or your kids can make money on the side. I’ve always encouraged my kids to budget and save for things they want plus look for other ways to make money. Kids can be quite resourceful and it’s not just lemonade stands anymore. They could start their own business for under $100 or find ways to make money on social media.
As an adult you have more options. Check out 43 ways for single mums to make money (really, they can be used by anyone) to give you some ideas.
What do you do to save money when raising kids?
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