Raising children can be an expensive undertaking, with Australian government data suggesting the cost of raising a 10-year-old boy is $203 a week, or $10,556 for a year.
That cost increases with age, with a six-year-old girl coming in at $137 a week, or $7124 for the year.
And these are low estimates, with parent spending possible to reach far above, according to the analysis from report authors Peter Saunders and Megan Bedford.
Each of their estimates leaves out some costs, with an average cost for a family with two kids — one six and one 10 — more like $340 for the two each week, or $17,680 a year.
Comparison site Canstar’s finance commentator, Steve Mickenbecker, told news.com.au the cost of raising kids could run much higher.
“If you send kids to the top private schools you’re up for another $30,000 and that’s a lot of money if you’ve got a lot of kids,” the father-of-three said.
“The realities of life are that people make choices and yes I’d be a lot wealthier if I hadn’t had kids, for me the cost for raising them is probably a million dollars but for me, that’s worth it.”
THE MOTHERHOOD PENALTY
On top of the big cost of raising children is the big hit to family incomes that comes with the birth of the first child.
Data from the ABS has shown mothers in Australia earn on average 18.2 per cent less than their non-mother counterparts, meaning mothers on the national median wage — $65,577 a year — would find themselves earning almost $12,000 less — almost the same as the cost of raising two children a year.
Father’s wages on the other hand barely budge when kids are born demonstrating the uneven cost of children.
In some countries, mothers cop a hit to their earnings of up to 61 per cent according to research published in February this year.
Melbourne University Associate Professor Leah Ruppanner told news.com.au: “The fact that you see in every single country that mothers take an income drop shows that we haven’t addressed progressive parenting.”
She said the blow to women’s wages only compounded the high cost of raising children.
The researchers compared six countries, finding mothers in Germany and Australia were worst off several years down the track from having children compared to mothers in Sweden and Denmark.
The United States and United Kingdom were no better, with a 31 per cent and 44 per cent pay cut for mums respectively.
The study found the penalty was biggest for mothers whose own mothers had stayed at home when they were children, as these mothers were likely to also stay at home.
HOW TO AVOID PAYING THE PRICE
Data from comparison site Finder shows that 90 per cent of Aussie parents say they had to make “big sacrifices” to their life when they welcomed their firstborn into their life, whether it was turning down jobs, missing work opportunities, or borrowing money from family and friends.
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Twenty eight per cent of Australian parents reckon leaving the workforce or dropping to one
income was the biggest sacrifice they made when having a baby.
Almost one in five parents have sold belongings to stretch the budget in a bid to stay at home longer with the kids, data from Finder shows.
Kate Browne, personal finance expert at Finder, said many parents are under great financial pressure.
“Deciding on when or if they should go back to work is a question many parents struggle to answer,” she said.
“It can be a shock for families to go from a dual income to a single income while raising children. On the other hand, daycare can cost an arm and a leg if you both decide to return to the workforce.”
But Professor Ruppanner said staying in the workforce was the best way for mothers to safeguard their wages into the future.
“You have to think about your career in the long term, your contribution to super your movement up a career ladder,” she said.
“For the first five years your contribution is going to pay for childcare, but that money will come back to you if you’re working at a full-time rate and moving up the career ladder.”
Debra Ballhatchet, 40, from the Gold Coast, is a stay at home mum of two kids, she also cares for her partner’s stepchildren part time.
“I used to have a real 9-5 average job before children but once I had kids I didn’t want to miss out on a sports day and a reading group,” she told news.com.au.
She said she mostly spends her days doing housework and caring for the children, in addition to some odd paid work, but plans on going back to work in the future.
“But I would only go back three days a week I would never go back to full-time,” she said.
— David Ross is a freelance finance reporter. Continue the conversation on Twitter: @FakeDavidRoss