Sorry I’m late, my kids just cost me $1,028,000!

This post should have issued last Friday, it’s late, and we’re sorry about that. The fact that it’s late got me thinking about my kids; we have three sons – between the three of them and the things they get up to, I’m often late.  Late to work, late getting things done, late to meals and late getting to bed.   I’m also probably going to be later retiring than I originally thought.

You see, raising kids is relatively expensive and that point was emphasised for me when I got home from work on Monday night.  It was my middle son’s birthday and getting rugby tackled at knee height by a two year old at the garage door, tripping over a scooter in the hall, slipping on a toy car in the family room and being presented with an incorrectly built Lego by the five year old birthday boy to view and admire while I said hello to my wife in the kitchen brought home to me the amount of stuff I’d had to negotiate just to get into our house.  We’re not extravagant shoppers and we’re trying to avoid them each having their own i-things (or at least put it off for as long as possible).  Items like clothes and bikes are handed down among the brothers, but it did get me wondering exactly what all this stuff costs so I decided to find out just how much.

Estimates prepared by the Federal Government’s Child Support Agency place the cost of raising the average two Australian kids from birth to adulthood (18) at $384,543, a staggering figure in itself. However, research conducted by McCrindle Research¹ points out that at the time the government conducted the research, the average number of children raised was actually 2.7. The McCrindle research also points out that the government estimates assume children will be financially independent by the time they’re 21. The reality is that many of us remain dependent on our parents financially to some degree until our middle 20s and some of us, much longer!  Add in things like holidays, entertainment, sport and leisure, private tutoring, education and home furniture, the cost of raising the average 2.7 kids, sky rockets to a whopping $1,028,000.  At a million-odd dollars, I’m going to be a hell of a lot later retiring than I originally thought and I don’t have 2.7 kids, I have the whole three!

The cost of raising kids bears more consideration when you also factor in that on average, Australians are having kids later in life (on average, six years later than their parents),  perhaps because when you don’t have kids of your own, a visit from friends with their bundles of joy is all the contraception required?  All those factors add up to high costs and a shorter period of time on average between the birth of children and retirement.  In turn that’s likely to lead to later retirement, (there’s that “late” word again) a lower level of retirement savings or both.

I’d never change a thing about my kids and I certainly wouldn’t trade them for all the money in the world.  The opportunity to have a family is one of life’s most awesome experiences but regardless of whether you plan rigorously in the lead up to having kids or they just kind of umm…..turn up without you planning it, the two tiny words, “I’m Late”, can have a highly significant impact on your life, in more ways than one

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By Dean Johnson

¹ http://www.mccrindle.com.au/ResearchSummaries/Generation-Z-Toys-and-the-Cost-of-Parenting.pdf