Kitty Flanagan on the cost of raising kids - The 7pm Project

Kitty Flanagan on the high cost of raising children - The 7pm Project (Australia)

http://7pmProject.com.au

Broadcast date: 16 August 2011 - No copyright infringement intended. Produced by Roving Enterprises.

Uploaded by Rove Online - http://RoveOnline.com (unofficial)


Got a lazy $600,000 lying around? Boy, do we have an investment for you.

Sleepless nights. Dirty nappies. Crying baby. Do young glamour couple Bec Cartwright and Lleyton Hewitt know what they've got themselves into? More to the point, do they have any idea what this parenting business will cost them?

Probably not. Most people don't, according to Dr Paul Henman from the University of Queensland's Social Policy Unit, part of the School of Social Work and Applied Human Sciences.

"Most new parents don't have much idea about the cost of raising a child," he says. "They look at whether they can afford it, but on a day-to-day basis. The overall cost of raising a child to the age of 18 comes as a surprise."

According to a study conducted by the Australian Institute of Family Studies back in 1994, a first child was calculated to cost around $3000-$13,000 in the first year alone. When you take into consideration the upfront costs of every year after that, along with the hidden costs of loss of earnings for the primary carer (estimated to be around $160,000 by the AIFS in 2001), well, the figure starts to look quite scary.

So what's the figure? Well, brace yourselves. "It can be up to $600,000," admits Dr Henman, "but that's the top end of the scale."

Hmm ... makes the Government's baby bonus look a little insignificant, right? In that first year, when you're shelling out hundreds of dollars for the myriad pieces of strange equipment that infants apparently need, you could be forgiven for feeling as though this is the most expensive year of your life. You'd be wrong.

"In general, research shows that costs increase with age," says Dr Henman. "Young children tend to be cheaper, but that depends a lot on whether childcare is required. Generally, however, a teenager will cost more."

Beyond expensive sneakers and iPods, there are good reasons for this. When researchers sit down to work out the cost of raising a child, they take into consideration all kinds of factors that new or would-be parents don't. Things like housing (the one-bedroom unit probably won't cut it any more) and transport (ditto the convertible).

"The research that I've done breaks down costs into 10 groups," says Dr Henman. "Housing and childcare are the two most expensive, then food."

http://finance.ninemsn.com.au/pfmanag...