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Managing the cost of a growing family

7 September 2023

Deciding to grow your family is a big decision. Whether it’s your first child or your fifth, there are significant financial implications to consider. While there’s no definitive way to know exactly how much you’ll need to earn or save to cover the costs of kids, there are some key areas of your finances that can change when you have children.

Changes to housing

A growing family may need more space than you currently have, especially as children get older. Plus, once kids reach school age, access to education may become a factor. Spend some time thinking about where you plan to live, how many bedrooms you’ll need, whether you want outdoor space, and the zoning of schools you’re interested in when planning your family finances.

Changes to household expenses

More people living in your home can mean increased usage of utilities like water and heating. More mouths to feed increases your grocery expenses. And there can be invisible costs in things like furniture and furnishings due to increased usage and heavier wear and tear.

Changes to your earning capacity

Raising children is meaningful and important work, and sometimes one or both parents will work less hours or take time out of the workforce to take care of kids. This can reduce your household income. Forecasting your future income and factoring in parental leave or part time hours can help you feel more in control of your family finances.

Changes to your lifestyle

As your family grows, your lifestyle preferences may shift. When planning the financial aspect of having kids, it can help to think about what kind of lifestyle you want to have. Where do you want to take family holidays? How do you imagine spending your weekends? How will you celebrate birthdays and milestones? Understanding the lifestyle you want to create for your family can help you manage your money and use it to create a life you love.

Break things down into base costs vs optional costs

The difficulty in estimating the cost of raising children comes down to differences in family spending behaviours. Family spending is often determined by financial capacity, and complicated by lifestyle preferences. Where one family may spend $500 a week on food, another family may only be able to spend $200. Where one family may spend $3,000 a year on sporting activities, other families may spend $0.

It’s important to focus on your own numbers. Spend some time thinking about your parenting preferences. Where will your children go to school? Will you use Early Childhood Education and Care (ECEC) services? Do you want your children to play sports, learn instruments, or take up hobbies? Research and estimate the costs of these things, and then break them down into base costs and optional costs. This will give you more visibility on how flexible your budget is.

Help with managing the costs of a growing family

Growing your family comes at a cost, but there are ways to bring in extra cash, save costs, or get financial support. These include:

  • Paid parental leave – you may be entitled to paid parental leave through your employer, or through statutory parental leave. For children born after 1 July 2023, you may be able to access parental leave payments for up to 20 weeks.
  • Long service leave – if you’ve worked for your employer for over 7 years, you may be entitled to long service leave, which can help you extend your parental leave.
  • Child Care Subsidy – you may be eligible for payments towards the cost of childcare under the Child Care Subsidy. The subsidy varies based on how much you earn.
  • Side hustles – having a side hustle can help you bring in extra income while you’re raising children. From freelancing your services to selling products you make to doing paid market research surveys, there are all kinds of ways to make extra cash.
  • Community – as the old saying goes, ‘it takes a village to raise a child’. Having a community around you can mean you share the load of raising kids, for example sharing babysitting, grabbing groceries when you’re unwell, or alternating school pick ups and drop offs.
  • Emergency fund – increasing your emergency buffer ahead of starting or growing your family can help take a weight off your mind.

Planning to start or grow a family is a big decision. Try the free Bendigo Bank Budget Planner to get an understanding of what your family budget could look like.

Any advice provided in this article is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable product disclosure statement(s) on our website before acquiring any product.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

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