Raise a family

Article last updated: 20/05/09

Raising children is a high priority for many people. Despite Australia’s increasing fertility rate, many people don’t fully appreciate the financial cost of raising children.

Education is one of the biggest expenses, with the cost of essentials such as clothing, computers and school trips¹. According to latest research about 50 per cent of parents are not sure of the total costs of education and when it comes to public, private or tertiary education, 60 per cent haven’t started saving in advance².

The average cost of raising two children in Australia is between $400,000 and $500,000. And higher income earners with disposable cash can spend $600,000 on raising one child alone from birth until age 18².


Be smart about the cost of raising children
As women are usually the primary caregivers, they spend more time out of the workplace than their partners. Women therefore tend to earn less over their working lives and therefore are not able to contribute as much to their superannuation as their partners.

If you plan on spending time out of the work force consider the following:
• Make voluntary repayments to your superannuation over and above what you are already contributing to make up for time out of the workforce.
• You can begin investing for your children’s education well in advance. There may be tax advantage ways of doing this.
• Investing via a discretionary family trust can also be beneficial as income can be distributed at the discretion of the trustees.
• And your financial obligations to your children don’t necessarily end when they leave school. You may need to factor in the cost of university or other forms of further education.



¹ University of Queensland (reported in"planning ahead can make the financial cost of raising children child's play, The Age 1/12/2007)
² Commonwealth Bank ‘Saving for the Education of Children’ Survey.