We often hear that raising kids is expensive, but just how much will it cost you over the first five, 10 or 20 years? Here’s a closer look at the costs of each stage of life.

If you’re thinking about having kids, or have already taken the plunge, you might be wondering how much you’ll need to budget for their welfare.

There are a few different answers to that, and it largely depends on your own standard of living and income level.

How much does it cost to raise kids in Australia?

A 2018 study by the Australian Institute of Family Studies looked at the weekly cost of raising a six-year-old and a 10-year old. They found that it cost unemployed families $140 per-week, per-child, and $170 a week for low-paid families.

That figure included the minimum necessary for healthy living, like food, clothing, school and household expenses (e.g. energy and transport costs). Altogether, it adds up to $8840 per year.

On the other hand, a 2013 University of Canberra (NATSEM) report found the cost for a middle-income family of raising two children until they left home was $812,000 and $1,097,000 for high-income families. This research was more extensive, but it’s now eight years old, and living costs have increased since then.

So it’s likely that both the AIFS and NATSEM figures underestimate the true cost of raising kids for most Aussie families in 2021.

What are the costs at each stage of life?

The research is consistent about one thing though, the cost of raising kids increases as they get older, as well as with the family’s income level.

That’s a useful insight to inform your financial planning. If you know that the biggest expenses will come in the teen and post-school years, you can put a plan in place early to cover those costs. Here’s an overview of what to expect at each stage.

Budgeting for baby

Bringing home a baby is an exciting time! It can also be an expensive one for new parents. Consumer watchdog Choice says you can expect to spend $3500 a year on purchases for the first four-years.

Keep in mind, that only includes direct expenses like furniture, clothing, nappies, food and toys. You’ll also need to factor in transport, utility bills, health and medical expenses, entertainment and lost income from time off work. Fortunately, the cost does decrease with each additional child, as you’ll likely be able to re-use some of your baby goods.

Read more: Budgeting for baby

Pre-school years

The years between two and five are some of the most precious, when you’ll make a lifetime of memories together!

Now, everyone knows toddlers have the best social lives. But depending on where you live and what you choose to do, all of those outings and social activities can really add up. From swimming lessons to gym classes to zoo trips, you can expect to spend at least $20 per activity, per week.

The biggest expense most parents encounter at this age however, is childcare. Care for Kids puts the average cost of childcare at $113 per day (before subsidies). However, that’s likely to be significantly higher if you live in the city centre. In the Sydney city centre, the average daily price rises to $166, in Melbourne it was $156 and in Perth it was $147.

Outer suburbs fared better, with the cost averaging $108.87 a day in New South Wales’ Camden and $99.90 in Queensland’s Ipswich.

The primary school years

Starting school is an exciting milestone for any family. It also means you’ll no longer have day-care costs, although that’s often offset by the rising cost of education. School uniforms, books, stationary, sports and recreation, social outings – and most recently, technology like laptops and mobile phones – all adds up. You may also need to factor in before and after school care if you’re planning on working full time.

The early primary school years are a good time to start talking to your kids about money, especially earning pocket money, saving and spending it.

Read more: When to start talking money with kids

Teenager times

Tweens and teens are an expensive bunch, it seems! It’s at this age that the costs of food, education, socialising, technology and clothes really start to make a dent.

The costs of education are especially eye-watering – and unexpected – for many parents. A 2020 study that indexed education costs across the country found that parents are paying a staggering $81,823 on average to put their kids through public school in metro areas, and $66,603 in regional areas.

The researchers said the annual school fee of $433 was “only a fraction of the total, with the remainder going towards other related costs such as outside tuition, school camps, sports equipment, electronic devices, uniforms and textbooks.”

If you’re planning on sending your kids to private school, you’d better start saving early. Parents in Sydney with a child starting at an independent private school in 2021 could expect to pay nearly half a million dollars ($448,035 to be exact) in total. On the flipside, country New South Wales was the cheapest place to send your kids to private school, at just $133,920.

Again, costs varied widely between regions, with the cost in capital cities almost double that of the country.

Given all the expenses associated with the teen years, this is an important time to continue teaching your kids about budgeting, saving and how to prioritise their needs and wants. Don’t forget to educate your kids about debt – with all of the buy now, pay later options available, younger people are increasingly finding themselves indebted at an early age.

Read more: Why a job means more to kids than money

Don’t be left wondering if you’ll be able to afford to give your kids what they need. Start planning for their financial future as early as possible by putting a family budget in place, together with a longer-term financial plan and an estate plan. That way, when expenses come up, you won’t be caught short.

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Budgeting, financial planning, estate planning… having kids comes with a lot of responsibilities! It’s always worth seeking professional advice when planning for your family’s financial future. Get in touch with a financial planning professional near you using our Match My Planner tool.