The cost of raising children in Australia

Having children is a life-changing and joyous experience for most parents, but it also comes with added expenses that can push the budgets of even the savviest savers.

A 2018 government study shows that parents at a bare minimum can still expect to spend around $140–$170 a week to raise a child. However, it's not unusual for this figure to be far higher for most parents and guardians.

What is the cost of raising a child in Australia?

There are a few different answers to that. We looked at a couple of studies and found the estimates ranged from $159,120 to $548,500 over 18 years.

A 2018 research by the Australian Institute of Family Studies shows that it costs low-paid families $340 a week to raise 2 children, a 6-year-old girl and a 10-year-old boy, which is roughly $170 per child. That's $8,840 every year or $159,120 for 18 years per child.

For unemployed families, the cost of raising 2 children of the same ages was $280 a week or roughly $140 per child. That's $7,280 every year or $131,040 for 18 years. Again, per child.

However, a 2013 report by the University of Canberra came up with completely different figures.

The earlier study created profiles for 3 different families: lower income, middle income and higher income. It found that the cost of raising 2 children would likely range from $474,000 to $1,097,000 over the course of their childhood.

For 1 child, that's an estimate of $13,166 to $30,472 every year or $237,000 to $548,500 over 18 years.

What are the biggest costs when raising a child?

In late 2021, Suncorp Bank revealed the costs of raising a child in Australia in its Cost of Kids report. The research surveyed a representative sample of Australians and targeted parents.

The report found that the cost of raising a child increased by more than 10% in the past five years. Communication devices and technology are the single biggest expenses since the previous report in 2016. Parents now spend 186% more on keeping their children connected each month, with a cost of $106 per child spent on computers, gaming consoles and mobile phones.

Finder survey: What events make Australians take out or adjust their life insurance coverage?

Why is it important to know the cost of raising a child?

If you understand the cost of raising a child, you can make important decisions in advance. You can start saving, create a support network, develop a budget and find affordable housing.

Anne Hollonds is the director of the Australian Institute of Family Studies. She said the cost of raising a child has long been of interest to potential parents, adding:

Understanding the potential cost of having kids also allows you to put an appropriate financial safety net in place. For example, life insurance or income protection insurance, which guarantee a wage if you become too sick or injured to work.

How can insurance help with the cost of raising kids?

Insurance can give your family an important safety net in case anything goes wrong. If you die or become too sick to work, life insurance and income protection mean the difference between falling behind on the mortgage or having enough money to pay for the best healthcare. Here's a summary of how they can help:

• Life insurance pays a lump sum if you're diagnosed with a terminal illness or if you die. The money can be used for whatever your loved ones like, whether that's paying off the mortgage, covering school fees or just keeping on top of everyday expenses.

• Income protection insurance replaces up to 75% of your regular wage if you ever become too sick or injured to work. Again, you can use it for whatever you like but it means you can focus on getting better rather than worrying about paying the bills.

Compare life insurance and income protection quotes

We've put together a list of all the life insurance and income protection providers available on Finder. Click through for a personalised life or income protection quote. Not sure which one you need? Our life insurance vs income protection guide can help.

• Life insurance
• Income protection

1 - 6 of 6

Name	Product	Maximum Monthly Benefit	Maximum % of Income Covered	Maximum Benefit Period	Minimum Entry Age	Sum Insured
TAL Accelerated Protection Income Protection Finder Award		$30,000	Up to 70%	Up to Age 65	18	$1,305 million	Get up to 70% of your income covered with flexible short and long term benefit periods.	Get quote View details	Compare	loading Fetching your data...
AAMI Income Protection		$10,000	Up to 75%	Up to 5 years	18	$222 million	Take out a new AAMI Income Protection policy and get $100 eGift card after your first 4 months of cover. T&Cs apply. Ends June 30, 2024.	Get quote View details	Compare	loading Fetching your data...
ahm Income Protection		$10,000	Up to 70%	Up to 5 years	18	Data not available	Get 10% off your first year of ahm Income Protection when you apply by 1 July 2024. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
NobleOak Income Protection Finder Award		$30,000	Up to 70%	Up to Age 65	18	$65 million	With NobleOak, you can lock in a policy with a benefit period covering you up to the age of 65. Cover limits may go as high as $30,000.	Get quote View details	Compare	loading Fetching your data...
Medibank Income Protection		$12,500	Up to 70%	Up to 5 years	18	Data not available	Save 10% on your first year of Medibank Life Insurance when you apply by 1 July 2024. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
Insuranceline Income Protection		$10,000	Up to 75%	Up to 5 years	18	$222 million	Protect your family with an Insuranceline policy and you can go into the draw for a chance to win a $1,000 gift card. New Customers only, T&Cs apply. Competition entries close on 31 July 2024.	Get quote View details	Compare	loading Fetching your data...

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How much does childcare cost?

Data from Care for Kids show that the average cost of childcare in Australia is $119.40 a day, before subsidies. That's easily going to be the most expensive outgoing for lots of parents.

However, the price can vary significantly depending on where you are. In Sydney city centre, the average daily price jumped to $171.13 while Melbourne was $152.23 and Brisbane was $137.98. The costs in Perth are $151.50 and $119.25 in Adelaide.

Head further out and childcare becomes less expensive. New South Wales' Blacktown reported an average daily price of $101.89 while Victoria's Dandenong was $106.45 and Queensland's LoganBunderberg was $92.15

To put the cost of childcare into perspective, an average-earning Australian couple with 2 young children is likely to spend around 20% of their income on full-time childcare costs based on data from the Organisation for Economic Co-operation and Development (OECD).

Thankfully, government benefits are available. Check the Australian government's Family Assistance Guide to see which ones apply to you.

Figures taken on 23 June 2022 from Care For Kids child care cost calculator.

How much does education cost?

Data from the Futurity Investment Group shows that parents can expect to spend an average of $83,869 to send a child starting school in 2022 to a metropolitan state school.

Of course, that price balloons if they decide to send their child to a private school. In that case, they can expect to spend a whopping $349,404 on their child's education.

Costs vary considerably depending on which state your child goes to school in as well. Brisbane takes the crown for Australia's most expensive Catholic education, while Sydney is in the lead for the highest Government and Independent education. Perth is the nation's most affordable city for an Independent education.

Source: The Futurity Investment Group Planning for Education Index

The cost of raising a child can be more complicated

It's easy to spend more than the government's estimated figure on raising your child especially if you don't fall into the unemployed or low-paid category.

In 2019, women's media platform Mamamia asked 11 families to analyse their weekly spending per child. The figures ranged from a frugal $152 all the way to an eye-watering $863.

You also have to take into account the economic impact of taking time off work – either for parental leave, to raise your children for a few years or even just turning down overtime hours.

A 2014 report by the Australian Human Rights Commission found that 49% of the mothers and 27% of the fathers reported experiencing discrimination in the workplace during pregnancy, parental leave or on return to work.

The same report found that 18% of mothers felt they were either dismissed, made redundant or moved elsewhere due to their pregnancy, parental leave or family responsibilities or breastfeeding requirements.

Non-monetary costs of having a child

Of course, money isn't the only thing you'll have to part with if you decide to have children. Social engagements, spare time and even career ambitions can all be impacted.

Finder surveyed over 1,000 parents in 2021 and found that one big impact on parents is how much time they spend driving their children around. Parents spend 3.5 hours per week on average driving their kids to school and other activities.

You might also have to make some changes to your career once you have kids. 29% of survey respondents switched to part-time eployment after giving birth.

We also spoke with 3 mums who shared their personal sacrifices as they became parents.

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