Hi Guys. Well, as part of my review of my future free cashflow and purchasing power, I’ve started to think about the costs associated with starting a new family.
For those of you with families on the way, or already blessed, how did you go about figuring out what impact your new editions would have on your future cashflows?
Is anyone aware of the average cost of raising a family from inception through to primary school?
I’m keen to get more involved in property investing, but am also keen to have a family, and thought it important to figure out what headroom I’ll have if I have a kid or two over the next 1 – 3 years.
Thanks
TwoBob
… just my 2 cents worth!
Hi Twobob,
I think the last thing I read said that it costs $100,000’s of thousands to raise children.
I should know I’ve got 2 and it costs a small fortune!
Anyway, do what we did and get the person on the least amount of money to stay at home to bring up the children, and the other person goes out to work. At least that way you keep some money coming in and can still keep your head above water.
We’ve been skint now for 7 yrs, but we have happy healthy children who we adore and who adore us. Next year the youngest goes to school and then my husband will be going back to full-time work and we can get back on the investing schedule.
I know that investing for your future is so important, but just wait until your child says ‘I love you’, or gives you their biggest tightest squeeze. Then you’ll know it’s all been worthwhile.
Don’t anyone tell him about the sleepless nights, and the fights with your partner, or the depression, or the vomit or the !!!!.
It’s all worth it.
I hope I haven’t put you off.
Landt.I believe this is a very personal issue and at “crunch time” has little or nothing to do with property investing.
I’m currently living in a country where every man can have up to 4 wives. The average wife has 7.2 kids each (highest in the world). Each man on average is supporting up to 12 to 15 kids, and their wage is about USD $ 6 per day…most of which is spent on chewing qat. They all survive no problem…don’t have any western luxuries mind you…but then your question didn’t address that…it’s naturally implied when western people ask questions like this.
These questions are usually generated from watching ridiculous sitcoms from the US where they fear having one child will bankrupt them…all hyped up for the all devouring well educated, highly paid, single, US hyper-consumer.
Cashflows and raising children is a mutually exclusive non-sensical question posed in a Western 1st world country. Believe me, you can easily afford way more than your partner will ever be able to physically have.
Cheers,
Dazzling
“Go hard or go home”
It’s not the first few years that cost you, it’s when they get to high school, particularly if you send them to a private school.
Budgeting is importanct but as the others have said, having children is not about the cost it is far more about the enjoyment. Your life will never been the same.
Go forth and multiply!! (The practice is fun too!!)
PT
Today is a new day. You will get out of it just what you put into it.
We don’thave children yet, but when we had to be serious about budgeting (We were saving for a holiday round the world, we saved enough in six months!! So it works!), we planned exactly what we were going to eat with a 2 week food roster.
Admittedly it can be rather boring eating the same food, but we also found that the extra money it freed up was enormous! Just because we set ourselves a specific menuand stuck to it, I reckon we saved $80 a week on luxury foods.
Keeping a money diary helps. Write down EVERYTHING you buy and then see if there are some things you can eliminate to help make it easier. Things like buying your lunch everyday or that coffee everyday add up to a surprising amount of money.
My parents can say they did it, as there are 4 children in our family. We all went to private CAtholic schools (Parents choice), and we ate well. The funny thing was my parents still managed to buy a investment property, move my grandmother over from Brisbane and support us on a measly $13 000 a year! That was back in the early ’90s and I know that coz I used to watch dad do his tax returns…
I think I grew up better for it coz we appreciated what we had and didn’t take it forgranted.
Good luck.
Steph.Success is 1% inspiration and 99% perspiration.
Hi TwoBob
Actually believe it or not, you actually do get by, whether they’re planned or unexpected. It’s like when those unforseen bills come in and you wonder how you’re going to pay them as you hadn’t budgeted for them – but somehow you manage to pay them and still put food on the table and clothes on your back. And like the other elist members advised, children are precious, so enjoy every moment!
We actually have 2 with another due in May (all accidents but wouldn’t trade them in for the world – some days it’s tempting but then they give you that big squeezy hug and say I love you – you melt then). I actually started up an online business to hep supplement our income a bit, as going to work and leaving the kids in child care just wasn’t something I wanted to do.
What helps us the most though is the fact that we have a budget. We list all our incoming and outgoing expenses on a fortnightly basis (ie mortgages, electricity, water, incoming rentals from +CF properties, insurances, petrol, groceries, clothes, car regos, stock feed, savings, spending money etc etc etc). The important thing is if you do a budget you stick to it. To make sure we don’t go over our grocery budget each fortnight, we do up a shopping list – any extra money left over can either go towards the next shop or buying a few extra treats (pregnant women get cravings!). Money that we don’t need then and there (ie savings, car regos, clothes) we tend to put onto the mortgage so it has some benefit until we do need it – then we just redraw it when the time comes.
When you think of money and kids, think….kids are like pay rises, the more money you get, the less you see!”
If you use positive gearing you can afford an infinite number of properties. If you take a certain amount of money out of your bank account automatically for investment you will find a way of making do with what is left over.
Guys – thanks for your comments. All very practical and we’ll manage somehow!
And for any others that might be interested in the topic of how much it costs, I recently came across a report published by AMP on the cost of raising a family and I’d encourage you to download and read it.
Some of the key findings on the report (http://www.amp.com.au/display/file/0,2461,FI6171%5FSI3,00.pdf?filename=natsem_issue3.pdf) show:
– the total cost in today’s dollars is $448,000 to raise two children from birth to age 20. That’s around $322 a week, or 24 per cent of average gross household income of $1324 a week.
– in an average two-child family, total expenses hit $100,000 when the oldest child is eight. By the time the oldest child is 16, total expenses have hit a quarter of a million.
– parents on average spend around $50,000 on education and child care, although these costs will rise if the parents choose private schools.So, if you were looking to put some numbers on it – I’d recommend that you download the report and see page 3 (which has a weekly estimate for all age groups).
Cheers …. TwoBob
… just my 2 cents worth!
We did a number of things:
1.Dissapointment therapy (“No you can’t have that today” – always put a time limit on it!);
2.We joined ASG (australian Scholaship Group) for forced savings for our children (nobody ever puts $5 away a week for their child!). We are saving for High School and Tertiary eduction so it gets a bit hairy at times;
3.We formulated the belief that hand-me-downs together with a few Choice new items make a perfectly good wardrobe. When they become teenagers (and we aren’t loaded by then) we will provide the basics and they can chip-in anything extra to buy “Label” items.
4.Teach them straight off the bat the right way to use your money (a la Richest man in Babylon, etc).SO now that our children are only 4 and 3, we’ve put off planning more – we just enjoy them for now. Gotta love little people! And they are NOT devils, they are angels – some just turn into Ark-Angels and want to take on the whole world!
Hehehe – I love my little Girl! Bless her stubborn,…err… persistent nature…..DO it! The more you put into them, the more you get out of them!
Cheers
C@34
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