What it really costs to start a family

This article was written by guest author Diana Clement

Families cost money. Until a couple starts a family, however, they often have no idea how much cash they will burn through bringing up children.

The figure is surprisingly high – $250,000 according to government research. It makes sense when all of the costs of running children are included. They include:

  • Lost income:

The biggest cost of having a baby comes in lost income. One member of the couple almost always gives up work for a while. That may be three months, six months, a year, or sometimes for ever. If the parent doesn’t go back to work the lost income could easily be $165,000 alone.

  • Baby equipment:

new parents often find they “need” top of the range everything. A Bugaboo Cameleon pushchair, which Kate Middleton is rumoured to have bought, will set parents back $1,700. Then there is the car seat, the cot, the baby sling, baby sleeping bags, the high chair, the educational toys, and so on. That won’t leave much change from $5,000 for budget models and it would be easy to spend $10,000 for top of the range.  Many parents find that five seater cars and two-bedroom homes are no longer large enough when they start a family.

  • Child care.

Full time childcare can cost $200 to $400 a week – although from the age of three that cost drops at centres that offer the government’s 20 Hours ECE (Early Childhood Education) initiative.

  • Schooling.

School fees, lunches, trips and afterschool activities can add up to thousands of dollars a year.

  • Holiday costs.

Once children hit the age of two, they get more expensive to take on holiday. Before then parents can get away with sitting them on their laps on the plane and bringing a travel cot to a hotel. The cost of taking a family of three or four on holiday is significantly more expensive than a couple’s annual holiday away.

  • Mouths to feed.

Should parents choose to bottle feed, it can cost $1,000 per child from birth to 18 months that costs more than $1,000 per child. Prepared baby food is expensive as well. Eventually there will be regular family food, which increases in cost as children grow until it reaches a peak in the teenage years. It’s not unusual for two children to add an extra $100 a week to the grocery bill.

  • Insurances.

New parents need to review their insurances. Is their life insurance cover high enough? Both members of the couple need cover – even if one isn’t working. The working spouse will have costs such as childcare to consider should his or her partner die. Does the family have income protection and trauma insurance? With additional mouths to feed this becomes important.

Every household will be different. None-the-less it costs a lot of money from birth to university to raise a child and parents need to be prepared financially.

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