Being a parent is the most important and rewarding role you’ll ever play in your life. While the hours are long and the pay is poor, the satisfaction is enormous.
But, whether it’s learning the piano, early morning swimming lessons or ballet classes the reality is, as your kids grow, the costs could rise with them!
Will your finances keep up with your kids?
The cost of raising children has grown by 50% in five years, while household incomes have only risen by 25%, according to a recent AMP.NATSEM report1.
Private education accounts for much of the cost for high income families. But as tablets replace textbooks, expectations in the classroom are changing across the board.
Many parents are now planning ahead to give their children the best possible start in life.
$812,000 – Cost of raising two children for a typical middle-income family (weekly gross income of $2,274).1
$1.1 million – Cost of raising two children for a high-income family (weekly gross income of $4,984.)1
50% – Increase in the cost of raising children in five years. Whilst household income only increased by 25% during the same period1.
up to 7.5% – Ongoing annual increase for most private school fees.2
We can help with solutions to manage the costs
As interesting as it is to know the costs, it’s more important to get some help with possible solutions. There are several strategies that could help:
- maximising the equity in your home to invest in your kids future
- creating a structured long term savings plan for your kids
- reducing the interest you pay on your home loan to free up cash, and
- finding better ways to keep track of your money and manage your spending.
Like some help?
There are financial paths that can help you keep up with the costs and set your children up for the best.
1 Source: AMP.NATSEM Income and Wealth Report: The cost of raising children in Australia, Issue 33, May 2013 visit amp.com.au/raisingkids ; Australian Scholarships Group; Australian Bureau of Statistics.
2Sydney Morning Herald, 25 Jan 2012, http://www.smh.com.au/money/planning/funding-a-private-education-20120124-1qef0.html
What you need to know
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