Expectations vs reality: The cost of raising children in 2023 - Education Matters Magazine

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Expectations vs reality: The cost of raising children in 2023

raising children in 2023

With over half of Aussie parents (56%) reporting that starting a family was more expensive than first expected, there is a significant divide in the expected costs versus the reality of raising children in 2023.

According to new research by CHOOSI, the expected costs for childcare (38%), education (36%), food and groceries (35%) are among the most underestimated costs by Aussie parents when starting a family.

Commissioned by CHOOSI, in partnership with consumer research group CoreData, The Choosi Cost of Kids Report 2023 surveyed 1,210 Australians, exploring the key expected costs versus the real costs involved in raising children, and the general sentiment towards starting a family in Australia in 2023.

The Aussie family

Almost half (47%) of couples planning to start a family feel local and world events over the last two years, such as the increased cost of living, have impacted their decisions around when to start having children – namely delaying having kids by up to two years (26%).

The reported ideal age for Aussies to start a family is 27 years old on average, with the average couple planning to have two children. However, most couples (84%) planning to start a family felt the cost of having kids has impacted the number of children they are planning to have, with more than 8 in 10 (84%) who were considering having more children reported feeling the same way.

The study also shows that many couples planning to start a family (63%) will expect to get at least some financial support from their family, while over 2 in 5 parents (42%) reported receiving financial support once they had children. Additionally, couples also expect considerable non-financial family support when they have kids (28%). Interestingly, only a few received considerable (14%) or some (31%) non-financial support, such as babysitting or help with chores.

The estimated annual average spend on children is $12,823 per household.

Financial impact

The current rising cost of living and economic market conditions will likely put additional pressure on Australian families and households, forcing families to put their budget under the microscope.

Overall, the estimated annual average spend on children is $12,823 per household. And having sufficient money saved (79%), secure employment (70%) and owning a home (60%) are among the main prerequisites for couples who are planning to start a family.

The research shows that couples planning to have children feel they should have at least on average $31,462.00 in savings before starting a family – yet only 1 in 2 of those are willing to sacrifice their current lifestyle (53%) or discretionary income spending (53%) to save up this amount.

Amongst all expenses, childcare has come out on top as the most expensive perceived cost when starting to have children by parents (55%), followed by nappies and hygiene (55%), safety car seats (47%) and food and groceries (46%).

Wealth Adviser, Ms Kathryn Creasy, commented: “Most young families are aware that childcare can be expensive, but they don’t always anticipate that it can be more expensive on an annual basis than private school fees. It can make parenting decisions difficult – particularly when the monetary benefit of having a child in day care versus the wage a parent can earn working for that day is low.”

“Australian families are now more likely to have two working parents than was the case 40 years ago. Thus, childcare costs are increasingly part of the family budget. Rather than saving for childcare costs, families tend to ensure that the ongoing income of a second working parent can more than enough to cover the cost of childcare. Other expenses that are not always factored in by a couple planning to have children are the cost of private health insurance, which can feel essential when a child needs urgent care, as well as activities for the child such as extracurriculars.”

Professional financial advice

When it comes to seeking financial advice, most parents (91%) did not consult a professional financial expert before having children. Whereas many parents (78%) who did consult a professional financial expert found it either extremely, or somewhat, worthwhile. This was much more common amongst the younger generation that were more inclined to do so, especially Gen Z (20%) compared with Gen Y (11%) or Gen X (6%).

Getting professional assistance when planning for children can be really useful. A financial planner has often helped many people, in many different situations, and can plan for the same thing a dozen times over. This means they have insight into the future that a couple might not be considering,” Ms Creasy explained.

“A well thought through and professional plan can mean couples are less likely to be negatively impacted by unforeseen events, which can save on stress and anxiety at an already challenging time in their life.”

cost of raising kids in 2023
Children growing out of clothes and footwear, lost income and career momentum, lessons, tutoring, school trips and other extracurricular are the top unexpected costs when raising children.

Hidden expenses

Outside of the expected increase of household costs, education and childcare fees and healthcare costs, parents have also reported additional ‘hidden expenses’. This includes birthdays $320; presents $233; toys and games $423; technology (computers, phones, devices etc.) $765, sporting activities $875 and extracurricular classes and tutoring $779.

Children growing out of clothes and footwear (34%), lost income and career momentum (29%), lessons, tutoring, school trips and other extracurricular (27%) have also surfaced as the top unexpected costs when starting and raising children.  

“There is an ever-increasing pressure for families to keep up with the latest technology, housing, holidays etc. Having a budget to help with these expenses can’t be underestimated. Families should ensure that they can pay for the important things first such as, housing, healthcare, food and clothing. Then they can plan for discretionary spending,” Ms Creasy, stated.

“Some families budget for each child to do one extra-curricular activity per term, and parents should make sure it’s something their kids love, so they can get the most out of their hard-earned income.”

“Families should also consider that not everything needs to be brand new – websites like Facebook Marketplace have made it easy to buy second hand (and often hardly used) children’s items for example.”

Apart from the financial costs, there is also a huge time investment involved when raising children, with parents estimating to spend an average of 35 hours per week on taking care of their child(ren). Similar to the discrepancy between expected versus actual financial costs, the study shows over 4 in 10 (42%) of parents also feel the amount of time spend caring for children is more than expected.

Further findings: 

Hidden expenses:

  • Couples planning to have children also expect to go on a babymoon (34%), with an average expected spend of $3,701.
  • Parents reported going on a babymoon (13%), with an average spend of $1,986.
  • Couples planning to start a family intend to throw a baby shower (56%), with the expected average cost being $1,037.

Travelling with children

  • Families have estimated costs of $2,563 spent per year on holidays and travel with child(ren).
  • Parents have been missing their preferred holidays since having children (59%)
  • Parents feel family holiday types, experiences or destinations they NOW prefer have changed compared to pre 2020 (65%).
  • Families must save money in advance to accommodate additional expense for children when traveling (85%).

Workplace & careers:

  • 2 in 3 parents (66%) have purposefully put their career on the back burner for a period when they had children. Of these, 41% regrets their decision.
  • Working dads took at least some paternity leave (44%). Of those, 90% returned to the same job and position and 9% to the same job with a different position.
  • Working mums report taking maternity leave when they had their children (59%). Of those, 64% returned to the same job and position and 13% to the same job with a different position.
  • Working parents have had to look for different types of jobs because of having children (41%).
  • Working parents had to reduce working hours or seek more flexible working arrangements because of having children (56%). Of these, 82% feel these work decisions have negatively impacted their income.
  • Females are more likely than males to be willing to sacrifice career advancement (50% vs 31%).

Real estate and living:

  • Aussie parents who do not own their home have reported that finding a suitable rental property has been harder with having children (68%).
  • Renting parents report that it is more expensive with children (64%).


  • Parents started saving early to prepare for education costs (39%).
  • Parents reported they did not save enough for education expenses (44%).
  • On average, parents estimate that childcare and education is costing them $11,660 ($2,915 per quarter) per year, going up to tens of thousands for some.
  • Parents have changed preference or decision to send child(ren) to private school at some stage due to affordability (24%).
  • Parents with a child in private school feel pressure to be able to continue affording private school with rising school fees and cost of living (70%).


  • Parents have incurred significant unexpected costs for their children’s hospital visits (54%).
  • Greatest out of pocket healthcare expenses:
    • Dental and orthodontic care (28%)
    • Private health insurance (18%)
    • Other special needs (11%)

Further insights from the research can be found on the CHOOSI website here.

Further Reading:

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