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Every year in Australia, around 300,000 babies are born. That’s almost 1,000 new bubs every single day. If you’re about to become a new parent, you might be wondering about the financial side of things. Is having a child expensive? How can you budget for it, especially with inflation and the rising cost of living? We’ve put together a guide to help you navigate the costs of growing your family.
Becoming a parent often means juggling a growing list of expenses on a single income. While costs can differ from family to family, here are the key expenses you’ll need to plan for:
Healthcare expenses start from pregnancy and continue through your child’s early years. One of the first major financial considerations is the cost of giving birth, which can vary depending on whether you choose the public or private health system. If you have health insurance, a regular birth in a private hospital will cost between $3,000-$5,000. If you’re eligible for Medicare, you can expect to pay between $0-$1,500 in a public hospital.
In Australia, the average cost of full-time daycare is $135 per day, although the exact amount depends on location and type of care. To reduce this cost, you may be eligible for the Child Care Subsidy, which is a government payment that helps cover part of your childcare expenses. Eligibility depends on:
While education might seem far off, planning early is key. Preschool fees should be factored in, as well as future school-related expenses. The total estimated cost of a 13-year school education for a child in a government school is $92,710. This includes school fees, outside tuition, transport, electronic devices and more. A private education, on the other hand, could set you back more than three times that amount.
Feeding a newborn includes costs for formula or breastfeeding supplies, as well as baby food once they start eating solids. Expect to spend between $1,000 and $2,500 in the first year, depending on your feeding choices. As your child grows, their appetite will too – just ask any parent of a teenage boy, who’ll tell you they’re a lot more expensive to feed than a baby.
You’ll need to budget for clothing, which can add up quickly as babies grow rapidly. Asking family and friends for hand-me-downs can offset some of the financial burden. Nappies also represent a significant expense in the early years. Disposable nappies, in particular, can be costly over time, while cloth nappies require an upfront investment but may offer savings in the long run. Overall, expect to spend between $1,000 and $3,000 annually on clothes and nappies.
Beyond nappies and clothes, there are several other essentials to consider when you first have a child. This includes nursery furniture, as well as baby gear like prams and car seats. On average, expect to spend between $4,000 and $10,000 to cover these necessities in your baby’s first year. From there, you’ll continue to see costs for replacing and upgrading worn-out gear as your child grows, adding to your ongoing expenses.
Becoming a parent is a significant step, and yes, it comes with a price tag. But kids don’t have to be a financial burden. If you create a budget, managing the cost of having children becomes a lot easier. Here’s how to do it:
When it comes to managing your family’s finances, setting aside regular savings is not just a nice-to-have – it’s a non-negotiable that should be part of your monthly budget. While creating a savings plan might not seem like the most exciting task, it’s incredibly important for the financial well-being of your family.
Start by opening a dedicated savings account for your child. Even though they won’t need the funds right away, having a place where you regularly deposit money can make a big difference over time. It’s also a fantastic way to teach them about the value of saving and the joy of watching their money grow.
Don’t forget to establish a joint family savings account, too. This account can cover future family vacations, unexpected expenses or educational costs. Regular contributions will help you avoid scrambling for funds when those big expenses arise. And let’s face it – life has a way of throwing surprises our way, especially with little ones around.
Besides savings accounts, at some point in the future, you may want to set up a family trust. A family trust can provide financial security and help protect your assets for your children. This can be especially valuable for long-term planning, such as for education or unexpected expenses.
Managing finances while juggling the demands of a growing family can feel like a full-time job on its own. Amid the whirlwind of parenting, it’s easy to let financial planning slip through the cracks. That’s where a financial planner like Poole Advisory steps in. We can offer valuable support to ensure your family’s finances are well-organised and prepared for the future.
If you need assistance with family financial planning, we’re here to help. Whether you’re setting up a budget or preparing your finances for your first child, our expert advisers have years of experience supporting Aussie families in improving their financial situation. Contact us today or book a free initial appointment to get started.
Compliance Disclaimer:
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.