Starting a family is a milestone many young Australians anticipate, but findings from the Choosi Cost of Kids Report sheds light on the unexpected financial pressures accompanying parenthood. While raising children is undoubtedly rewarding, it also comes with costs that can challenge even the most prepared couples.

According to the report, over half of parents found that starting a family was significantly more expensive than they expected. Surprisingly, childcare emerged as one of the most underestimated costs, followed closely by education expenses. Additionally, the report highlighted the financial strain of every day essentials like nappies, hygiene products and healthcare, which can place even more economic pressure on growing families.

Top 10 most underestimated costs of raising children:

  • Childcare, 38%
  • Education, 36%
  • Food and groceries, 35%
  • Hobbies and extracurricular activities, 29%
  • Clothes and footwear, 25%
  • Pharmaceuticals and health, 22%
  • Baby related items, 22%
  • Technology, 22%
  • Holidays, 21%

Top 10 most expensive costs when starting to have children:

  • Childcare, 55%
  • Nappies and hygiene, 55%
  • Safety car seats, 47%
  • Food and groceries, 46%
  • Prams, 41%
  • Clothes & footwear, 39%
  • Preparing nursery, 34%
  • Upgrading car, 33%
  • Pharmaceuticals and health care, 33%
  • Cots and changing tables, 32%

So how much does it cost to have a child?

The cost to have a child can vary greatly for each household depending on lifestyle expectations. With the current cost of living it’s fair to say most couples looking to enter parenthood will need to carefully plan their expenses and ensure they have a realistic budget in place.

The report found that for most couples having secure employment, sufficient money saved and having their own home were important factors before starting a family. A majority felt they should have at least $31,462 on average in savings and at least $100k in household income.

For parents with kids already, the approximate annual average spend on children was found to be approximately $12,823 per household with $6,572 spent on childcare and education each year.

What can you do to help manage the costs?

  1. Seek financial advice:
    Interestingly, only 1 in 10 parents consulted a financial expert before starting a family. While chatting to a financial planner might not be on your radar as a necessary step, a financial planner will look at your goals and unique financial situation to help you plan and budget for the future. To ensure our customers have access to appropriate financial advice we have formed a relationship with Alliance Wealth. For more information visit us in branch or contact our Customer Care team on 1300 138 831.

  2. Budgeting and planning:
    Create a detailed budget that outlines all expected expenses related to your child, including day care, nappies, clothing, medicines, doctor visits etc. Knowing what expenses you’re facing and how often you incur them can help you allocate your money more effectively. Try our easy to use online budget planner tool to help get you started.   

  3. Buy second-hand:
    Children grow very fast, so consider purchasing gently used items such as clothing, toys, and furniture rather than opting to purchase brand new.

  4. Focus on essentials:
    Prioritise spending on essential items like food, health and hygiene and education rather than non-essential or trendy items that may not see much use.

  5. Hand-me-downs:
    If you have multiple children or family and friends with older children, ask if they have any items they no longer use and would be happy to pass along to be used again.

  6. Meal planning: Eating out can quickly add up, so plan and prepare meals at home as much as possible. Buying groceries in bulk and cooking in batches can also help save time and money.

  7. Invest in quality Items:
    For items that are purchased brand new, opting for pieces you know are of a high-quality can save you money in the long run. Durable clothing, furniture, and toys may cost more initially but can last through multiple children if you’re only just starting a family.

  8. Low-cost activities: When it comes to the weekend taking the kids out to various activities can quickly add up. Look for free or inexpensive activities in your local area, such as seasonal events around Christmas and Easter, free kids activities and entertainments in parks and shopping centres and local parks, libraries and museums.

  9. Plan for the future: Start saving for your child's future expenses early by opening a savings account. Even small contributions here and there will significantly help with managing upcoming and unexpected expenses.

    If you’re looking to earn interest on your savings and reach your goals faster, or if it’s time to open an account for one of your kids or grandchildren, check out our range of savings accounts and term deposits.

Auswide Bank Ltd ABN 40 087 652 060, AFSL No. 239686. This information provides general advice only. We do not provide advice based on any consideration of your personal objectives, needs or circumstances.

If you require personal financial advice about your situation, we can refer you to Alliance Wealth Pty Ltd AFSL 449221 ABN 93 161 647 007 ('Alliance Wealth') for financial advice. For full details of our relationship with Alliance Wealth, please visit