Families feel the pinch as cost of raising kids soars: Suncorp

With rising house prices, fuel, utilities and the weekly grocery bill, the cost of living lies among the most significant financial fears of Australians.  

That however hasn't slowed down the willingness of Australians to have children, despite Suncorp reporting a 10% increase in the cost of raising a child over the past five years. 

Born into the digital age of being 'always-connected' through the latest gadgets, Suncorp reports technology and communication devices are some of the biggest spending blowout categories since 2016.

Five years ago, technology spending stood at $37 per child per month but today it’s $106 or 186% more per child per month.

This significant increase in spending lies across mobile phones, computers, and gaming consoles to keep kids 'connected'.

Suncorp Everyday Banking Executive General Manager Dr. Nick Fernando said as the cost of living continues to rise, understanding and managing finances is an extremely important skill as a parent. 

"Helping parents balance their finances while supporting their children is part of increasing financial resilience and literacy within our community,” Dr Fernando said.

Suncorp reports the rising cost of food associated with increasing living costs is the biggest overspend area for families. 

The average parent is noted to now spend $402 a month on feeding a child, up 60% from figures reported in 2016. 

Other significant increases in child spending to 2021 include:

• Childcare: up 79% from 2016 to $122 per month.
• Clothing: up 65% from 2016 to $140 per month.
• Healthcare: up 22% from 2016 to $112 per month.
• Education: up 196% from 2016 to $386 per month.
• Extracurricular activities: up 218% from 2016 to $140 per month.

Parents turning to BNPL

Suncorp reports near 40% of Aussie parents are opting to use a buy now, pay later service to accommodate rising costs of raising children.

Of the 2,000 parents Suncorp surveyed, six in ten 'felt good' about the ability to spread payments over multiple pay cycles to avoid substantial upfront costs.  

With regulation seemingly inevitable for the BNPL industry, parents may seek out additional repayment options in the future to navigate the rising costs of living and raising children. 

Savings remains front-of-mind

Kick-starting child savings to meet the rising costs of living has been a prominent goal of many Australian parents, with monthly savings up 716% on 2016 figures, recording savings of $318 per month. 

Such savings have been significantly boosted by lockdowns over the past two years, leaving many families indoors without the prospect of both inter-state and international travel. 

Suncorp highlights in its report, if parents can maintain their COVID-era spending habits alongside regular savings, they could end up saving over $10,000 in raising costs per child.

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Image by Nathan Dumlao via Unsplash.