How do we pay for the cost of babies and children?

Black & white image of Rebecca and her family. Rebecca, Mr. Pritchard and Jeffrey are in white t-shirts. Jeffrey is offering a newborn Della a sultana. Della is wrapped in a linen blanket in Rebecca's arms.

We’ve all seen the studies: children will cost you $150,000 over 18 years, $300,000, $800,000. A million dollars. Numbers flying all over the place, saying the same things, different things. The numbers become so abstract that they simultaneously mean nothing whilst making us feel sick at the impending cost of having and raising a family.

So once we’ve got a baby, how do we pay to keep them? 

The direct cost of goods - food, hygiene, clothing

Forgive the accounting term, I’ve never been able to shake that association when I think of these purchases. For newborn babies, the direct costs are relatively low. Food, hygiene and clothing are all that are required on a regular basis.

If you’re breastfeeding, you get the benefit of having food on tap, but it’s not entirely free (as any breastfeeding woman will attest to the ravenous need to increase her consumption). 

If you’re formula or mixed feeding, you could be using 1 - 10 cans per month, as your baby grows. With formula ranging from $15.00 through to over $40.00 per can, that can be a challenging expense to incorporate into your household budget. If your baby has digestive concerns, such as various intolerances or colic, you may need to explore prescription formulas which are more expensive. 

Modern cloth nappies (MCN if you’ve seen that acronym and wondered what the heck it stood for) will require a higher upfront outlay, and then you will recover the cost over time. Your set-up costs will likely range from $150 to $300 (or less if you’re able to get hand-me-downs or seconds). 

With disposable options, you will pay as you go, and according to your preferences. 

It absolutely pays to plan ahead. You know you will need nappies and wipes, that is a given. Therefore buying in bulk, or when items are on sale (or both) will save you a heap. 

A newborn baby may use between 6 and 10 nappies per day. This may correspond with 1 to 3 wipes per change. 

Therefore your preferences in nappy care will dictate the cost.

Prices range from $0.15 (Little Ones) to over $0.70 (Ecoriginals) per nappy. This varies depending on bulk value purchases, as well as the environmental rating. 

It’s the same story with baby wipes. You’re looking at a set-up of approximately $2.50 to $4.50 per wipe for reusable options.

Disposable wipes range from $2.50 (Little Ones) to $12.82 (Jak Organics) per 100. 

This is not a comprehensive review of the nappy and baby wipe market, but an extract of my own research. My family settled on Jak Aqua wipes and Bambo Nature nappies from hellocharlie.com.au (all bulk purchased).

Babies do need less nappy changes as they get older, but the nappies will also cost more in larger sizes, likely resulting in a gradual increase in household costs over time. 

The last major category in direct costs is clothing - and how long is a piece of string? You really can spend nothing through to dropping an absolute bomb. Setting yourself a budget each time your child goes up a size, can be really helpful so you don’t get carried away. Likewise, if there’s brands you love and they have a sale, buying up in future sizes. You know your child will fit in them eventually (although you may need to do some mental arithmetic to calculate which size they’ll be in in which season). 

I’ve really enjoying buying clothes for my kids. I think it has something to do with the inability to adequately justify buying new clothes for myself, it’s a joyous outlet. But like many parents, I’ve also felt the frustration or guilt when you have clothes that are barely or never worn. 

The other costs

When my son was born, I felt it was outrageous to be going to the Doctor’s for any little concern. Years of adult conditioning with a $60 gap for my own GP meant that I dithered to and fro for a while. But then I discovered that GPs are bulk billed for children under 18. Um, thank you Australia. It was a wonderful revelation to take cost out of the equation and feel comfortable that you weren’t throwing money down the drain to take your baby to the Doctor for a rash three times in the same week. 

Entertainment by way of toys, books, adventures, family outings can create a long list. But like everything else, you can spend nothing through to a fortune in this area. Children’s books and toys are a plenty at any community market or op shop for a steal, and local playgrounds serve just as well as a fancy aquarium when kids are little. 

Like clothes, it pays to be intentional here so you get bang for your buck as a family. Spending less during the week so you can spend more on the weekends may be clever, or perhaps vice versa. 

The lumpy costs

I’ve referred to ‘start up capital’ when it comes to saving for a baby, and now it’s time to talk about infrastructure. Upgrading from a bassinet to a cot. From a cot to a bed.

Growing into the next size of car seat could cost from $300 - $500 without breaking a sweat. 

It may not seem like a lumpy cost at first, but going to the next size (or season) for sleeping bags and suits can be like a punch in the face at Baby Bunting. These can range from $30 to $100 each (yes, you read that right) and if you’re like our family, you could be buying 3 or 4 at a time. 

Oh you want a tricycle? A bicycle? A scooter? 

If your child is entering care, childcare bonds are generally equivalent to the day rate multiplied by the number of days your child will be in care. We recently increased from 2 days to 6 days (across two children) and whack, $528. 

Consider your cashflow

I’m not going to speculate on how much your child will cost, there are simply too many variables. But I do know that if you’re not proactive with your money, it could be death by a thousand cuts. 

If we accept that kids cost money, and this will likely increase (or at least go in waves) over time, we can get organised around that.

Here’s how to get to make positive changes:

  1. Incorporate into your cash flow - having separate funds available for the purpose of caring for your kids will make it simpler for you to pay for things, and make decisions on a day to day basis. This could be a separate bank account, with perhaps a weekly and/or monthly contribution to keep afloat.

  2. Plan for the big expenses - if you do keep separate funds, try to let them build over time so that you can absorb chunky items without a worry. This could be for an item like a new bed, or throwing a gorgeous birthday party.

  3. It’s ok to say no - there are so many opportunities to spend money as a parent (I never fully understood why my parents spoiled us so much at Christmas until I had my own children). Now when I’m at the shops I am constantly thinking ‘oh he would love that’ or ‘that would look so cute’. But one of the best ways to care for our families is to be financially happy and healthy ourselves, and that includes living in a financially sustainable way. 

Getting in flow as a family is hard, every time you think you’ve got the hang of it, something changes. But getting in flow with your money can be easy, if you’re intentional, educated and empowered.