Archives: November 2015

How Much Do You Need to Raise a Child?


EQUUS01 November 2015 EQUUSPosted by Equus Partners EQUUSNo Comments


Until you’ve raised a child yourself, you may not understand the total costs. Even experienced parents often underestimate how much they are spending on one child and how much an additional child will affect the family’s finances. For families who are already living on a tight budget, a child can bring a whole new list of expenses that a family simply can’t afford. As a parent, it’s your duty to care and provide for your child to the best that you can, so it’s critical that you understand the actual costs before you decide to raise a child.

Total Costs of Raising a Child

In a report released by AMP and NATSEM, the average cost of raising two children until age 21 for a middle income family is Australia is $812,043. That’s over $400,000 per child, and over $450 a week per child. However, many of these costs are variable, and they depend on how much a family chooses to spend on food, housing, schooling, and entertainment. A low income family spends almost half this amount on two children: $474,280. In contrast, high income families in Australia spend an average of $1,097,278 on two children. What’s most alarming is that these expenses continue to rise every year, and they are rising faster than income in Australia. Some of the highest individual costs for children include transportation, food, and education.

Transportation Costs

The highest single cost for both low income and middle income families is transportation. Low income families spend roughly $100,000 on transportation for two children, while middle income families spend $160,000. This includes the cost of buying additional cars, buying bigger cars to accommodate children, and all of the petrol costs to take them to school and activities.

Food Costs

Keeping your children healthy and well-fed is also a major expense; it’s the second highest cost for low and middle income families as well as the third highest cost for high income families. The costs for families are approximately $90,000, $145,000, and $170,000 respectively. Like in other areas of child-rearing costs, the different income groups spend different amounts of money as it’s possible to spend less money on food, though the quality and nutritional benefit may be lower for less expensive foods.

Education Costs

Education costs are an interesting part of families’ finances, because they vary dramatically depending on your income level. Low income Australian families simply can’t afford to send their children to private schools, which can cost as much as $216 a week. As more middle income families are choosing to take their children out of school, and as a large amount of high income families are already doing so, they are seeing an extremely large amount of their savings go towards education. On average, education costs are $22,000 for low income families, $45,000 for middle income families, and $190,000 for high income families. Unfortunately, the best schools come with a large price tag, and deciding where you want to send your children to school is a financial decision more than anything else. These are only a few of the most notable costs of raising a child, but there’s also housing, healthcare, clothing, and other costs. For many families, these costs can quickly get out of control and be much more than they expected, so it’s important to save and be aware of these costs before raising your first child.

If you have a child on the way, or simply want to better manage your family’s finances, we have regular monthly events where you can learn from our financial experts through our Financial Edge event Series. Get in touch with us for information about our next event.


Equus Partners Wealth Management and Chris Nairn are Corporate Authorised Representatives of Capstone Financial Planning AFSL/ACN 223135, Australian Financial Services Licensee, Level 14, 461 Bourke Street Melbourne Victoria 3000

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