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How kids are becoming an unaffordable luxury

Analaura Luna

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We all know that the end of World War II brought about a baby boom … but is the rising cost of living in Australia causing a baby bust? Many families have already had to cut back their spending and trim their budgets to keep pace with spiralling costs, but now the increased pressure of making ends meet may be stunting Australia's population growth, as parents put off having children because of rising costs.

Everyone who argues against a ‘big’ Australia might think this is a good thing, but a steady birth rate is important to the strength of the country. The reality is that the median age of the Australian population is rising - it's currently 37.2 years, up from 29.3 in 1980, and the ‘babies per woman’ rate is almost half what it was in 1960.

And besides, when it comes right down to it, no one should have to give up their dreams of having a family just because the cost is too high.

In recent polling, almost half of the respondents stated they didn't feel they could afford to have another child, with three out of four revealing the need to reassess 'lifestyle' spending choices, cutting back on travel, entertainment and eating out to make the budget come closer to balancing. And it’s likely that this extra financial pressure families are feeling is only going to get worse as a result of the price hikes on necessities that came into play on 1 July.

And as much as we love them, it’s no secret that kids cost a lot. McCrindle research from 2008 estimated that the cost of raising an ‘average’ number of children to the age of 24 had already passed the $1 million mark. So it comes as no surprise that almost 62 per cent of parents cite financial necessity as the main reason for returning to work after having a child, but 24 per cent do so for ‘nothing’, as the cost of childcare either equals or exceeds the additional income gained by returning to work. In a climate where just paying the weekly bills is increasingly difficult, the cost of having children is becoming prohibitively expensive for some families.

According to a Roy Morgan survey, basic necessities such as electricity, housing and groceries are causing the most budget pressure, with one in three respondents stating that they or their partner were working more hours to boost the household income in an attempt to meet costs. So if you’d like your family to grow a little, or you just want to get back a bit of breathing space, going back to basics to get the most out of your money is a great place to start.

Solve the money mystery
Australians lose an average of $59 a week – $3,068 a year – to ‘mystery spending’. Keep track of every cent you spend for a week to find out where you’re ‘losing’ money so you can stop it falling through the gaps.

Slash your bills
Utilities, telephones, internet, insurance … household costs can be huge, but they’re also the easiest to reduce. Contact your providers to make sure you’re getting the best plans possible and then find out how to use them to your advantage. To save big bucks think about ditching that second car – it can save you thousands of dollars a year. And if you’re really brave, you could even think about getting rid of your first car.

Be brutal
Divide expenses into ‘essential’ and ‘non-essential’. Decrease essential expenses where you can and eliminate as many non-essential expenses as possible to create a gap between your income and spending – making tough decisions now will pay off in the future, as you create more breathing room in your budget.

Making ends meet can be tough, and for some families, rising costs have become a serious barrier to their dream of having children. By using some simple steps to make sure you’re getting more from your money you can break down these barriers and take back control – so it’s your costs that shrink, not your family dreams.

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Tags: money management, cost of living in Australia, rising costs, kids cost

Author's Biography

Analaura Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.