Get financially prepared for parenting [eBook]
Are you thinking it might be nice to hear the pitter patter of little feet soon?
You’ve probably been warned that you’ll lose plenty of sleep, your sanity on some days, and the privilege of going to the bathroom alone for a while. But what many people overlook is the financial cost of becoming a parent.
You’ll need to set aside at least $8,840 annually for one child – and that’s a conservative estimate covering only basic needs. If private schooling is part of the plan, you can multiply that figure by five. Ouch!
There’s obviously plenty of joy and tonnes of treasured moments ahead. To make sure those days of bliss aren’t tinged with financial strain, it pays to start thinking about what’s involved financially – sooner rather than later.
We want to help you budget for one of the biggest (and most brilliant) stages of your life – parenthood. Here, we take a closer look at what it costs to be a parent.
Choosi has put together a free resource called Budgeting for Children Guide [eBook] which gives you plenty of tips about how to plan and structure your finances.
Can you put a price on parenting? Yes!
Parenting today looks a lot different than it did a generation or two ago, and costs have also changed dramatically. Parents today have many conveniences (think mobile phones, disposable nappies and dishwashers) but they also face many new challenges (think how to keep the kids from iPad addiction).
Our family unit looks a lot different, too, with mum, dad and 2.5 kids no longer the norm.
Parenting: then and now
- We’re getting older: The percentage of women having their first child over the age of 30 years has risen from 23% in 1991 to 43% in 2011.
- We’re not as clucky: Australia’s fertility rate dropped from 3.55 to 1.93 from 1961 to 2012.
And if you think it’s getting more expensive to live, you’d be right. The most recent figures from the ABS show fuel, transport and other basic living costs are rising at their fastest pace in 3½ years – and well above any rises in our pay packets.
Economist Ryan Felsman highlights the issue: “Broadly, rising cost-of-living pressures are pressuring income-earners across the board.”
Adding to the financial strain, kids don’t seem to want to leave the nest these days. In fact, 43.4% of adults aged between 20 and 24 years of age are still living at home, and 17% of 25 to 29-year-olds.
So, if you’ve committed to the idea of the long and winding road of parenthood ahead, let’s prepare for the trip. How much is it really going to cost?
The big reveal: the real essentials
In addition to plenty of love, children need some basics to grow into happy adults. You’ll need to put a roof over their heads, clothes on their backs and food on the table. There’s also basic transport, health care and education needs you’ll be covering until they step out into the big, wide world on their own.
So, how can you prepare?
Bringing a tiny human into the world is a miracle and can bring you unimaginable joy and contentment – and lots of unsolicited advice. Choose carefully which advice you take on board, making sure you’re as prepared as possible – emotionally, physically and financially – for everything the ride can bring.
Feeling prepared yet, or not so much? If you are you planning to expanding your family then Choosi lets you compare life insurance policies to protect your growing household.
8 Jul 2019