Contents. 2 Suncorp Bank

Transcription

1 Cost of Kids Report

2 Contents Introduction 3 Food 4 Clothing 5 Personal care 6 Health 7 Household furniture 8 Communications 9 Extra-curricular activities 10 Education 11 Transport 12 Childcare 13 Savings the most expensive year of a child s life 15 2 Suncorp Bank

3 Introduction This report analyses the costs of raising children 1 across 11 cost drivers 2 presented over the following four stages of childhood: Infant (0-2) Pre-school (3-4) Primary school (5-12) Secondary school (13-17). This report focuses on the direct costs of children (costs that can be solely attributed to them). Household items including general furniture and equipment have not been included in this report nor have other family expenses such as energy and health insurance. The report does not take into account the impact of government financial assistance or household income. As a result, family benefits such as the Baby Bonus, Family Income Benefits 2 and other welfare benefits have not been taken into account. The report also doesn t take into consideration the financial benefits of a second child and subsequent children, instead focusing on the cost association with a single child from their birth to the legal age of 18. Prices used throughout the report are indicative only and are current as at June This report looks at 11 3 of the major cost drivers for raising a child. Cost driver Food Clothing Personal care Health Bedroom furniture Communications Extra-curricular activities Education Transport Childcare Savings Description All food and drink items consumed by children in a normal day All clothing and footwear, from hats to shoes and everything in between. Also includes accessories (handbags, sunglasses etc) Includes nappies, wipes, shampoo, soap, cosmetics and haircuts All medicines, prescription and otherwise including costs incurred in trips to the GP and dentist The necessary items a child needs to furnish their bedroom including cot, bed and wardrobe Mobile phone hardware and software and mobile credit as well as broadband connectivity Recreational activities including playing sport and cultural activities, including entertainment, family outings and short holidays Includes uniforms, school books, school bag, stationery and pre-school and school fees (broken down into public, private and Catholic) Bus and train fares as well as petrol costs The cost of long-day and regular hour day care A minimum savings amount per child for contingency purposes 1 For the purposes of this report children are aged birth through to 17 with 18 being the legal age of an adult in Australia. 2 Not all categories of expenditure apply to each stage of childhood, e.g. there are no education costs for an infant. 3 Cost drivers sourced from the report The Cost of a Child by the Vincentian Partnership for social justice. Cost of Kids Report

4 Food Graph 1: Weekly cost of food $80 $70 $60 $63 $75 $50 $40 $30 $20 $45 $38 Given newborns and babies up-to-the age of one are either breast fed (free) or bottle fed, costs are relatively small. Once solids are introduced, this increases but they are only eating about a quarter of what an adult eats. According to the ABS 4 50% of babies are breast fed to the age 6 months which leaves 50% being bottle fed or given some sort of formula. For this reason, a significant proportion of an infant s food costs are derived from the cost of formula. An infant at nine months will in general use approximately 1.5 tins (900g) of formula a week, costing on average $30 per tin or $45 per week, as well as a minimal amount of solid food. According to the Australian Government 5 the weekly household grocery bill for a family of four is $250. Based on the reasonable assumption that an adult requires a larger calorie intake than a child, it can be suggested that an adult would eat $75 worth and an infant child up to the age of 12 approximately 75% of what an adult would consume at around $50 per week. On this basis it is to be expected that from ages 3-4 this would roughly equate to half an adult s weekly intake of food ($37.50/week), and by primary age children would be consuming approximately three quarters of an adult s weekly food intake (approximately $56 to $75 week). While it is assumed teenagers would be eating close to a full adult serving, if not more, due to increased calorie intake during teenage years 6. 4 ABS Breastfeeding in Australia, Suncorp Bank

5 Clothing Graph 2: Weekly cost of clothing $14 $12 $8 $12 $6 $4 $6 $6 $2 Clothing is essential. The weekly cost of clothing is high in infancy before declining at pre-school age and then gradually rising again as children get older. Obviously, a huge factor is how long clothes last which depends on the rate of growth of a child. With babies growth is especially rapid within the first year, taking into consideration newborns go through four sizes (0000, 000, 00, 0) all before they turn 1. According to raisingchildren.net.au 7 newborns require around six singlets, six jumpsuits, two items for nightwear, three tops, cardigans or jackets (if it s winter), three cotton bunny rugs (for winter) or muslin (gauze) wraps (for summer), a couple of cotton hats, and a few pairs of socks. Modestly priced at around per item this comes to $160 when multiplied by how fast your baby grows. In its first year this can equal $640. According to mummy blogger crashtestmummy.com.au 8 your pre-adolescent child needs four sets of clothes for every two seasons. So that s eight items of clothing each year plus any miscellaneous seasonal clothes, such as swimmers in summer and jumpers in winter as well as new socks and underwear every six months. These items have been priced higher at $20 per item. For teenagers, the price of clothes spike as labels become a priority and for this reason a premium has been built into the price for a quarter of their clothes Cost of Kids Report

6 Personal care Graph 3: Weekly cost of personal care $30 $25 $20 $15 $25 $23 $5 $3 The weekly cost of personal care is high in infancy before declining for children of pre-school age and then rising significantly as children reach adolescence. However, it is in infancy that personal care costs are the most expensive. The higher costs at infancy can be attributed to the inclusion of particular items such as nappies that are only required at this stage of childhood. Prices for nappies are based on one pack of 36 per week and one pack of baby wipes per week ($25 in total). Personal care costs for pre-schoolers and primary school kids drops off significantly where little more than a toothbrush and a haircut every couple of months is needed, while primary-aged kids may require added extras such as deodorant and more regular haircuts. The price increases for teenage years can be attributed to cosmetics, aftershave, razors and other beauty and hygiene products, which have been priced modestly, with the assumption that most items would last approximately 3 months. 6 Suncorp Bank

7 Health Graph 4: Weekly cost of health $12 $8 $11 $6 $4 $2 $3 $5 Health costs are high at infancy, before declining at pre-school age and rising marginally as children get older. For infants, health care costs approximately per week. Once again, similar to personal hygiene, health care is most expensive for an infant. The higher costs of health care in infancy can be attributed to a number of factors, most notably paediatrician visits (approximately $150). Generally, infants require regular check-ups in the first year of birth, with an average of four visits (priced $58 each) included in this report s calculations for infants and two for children of other ages. In addition, health for infants includes items not found in the health section of children of other ages. Included are items such as teething rings ($5), teething gels ( x 2), dummies ($5 x 10) and nappy rash cream ($5), as well as baby paracetamol ( x 3) and baby ibuprofen ( x 3). These additional items, coupled with two additional doctor s visit make health care more expensive in infancy than at any of the three other stages of childhood. Between pre-school and secondary school the cost of health care does not change dramatically. The cost of health ranges from $3 (pre-school) to $5 (infant and primary school) per week. While the cost of health is lowest at pre-school age, it does not significantly change over the course of childhood. Included in the health category for 5-12 and age categories is over the-counter medicines, two doctor s visits per year, prescriptions, one dentist visit per year and also an optician s visit every two years for children at secondary school. Mean annual expenditure on dental care for an 18 year old is $255 and $58 an optician visit Cost of Kids Report

8 Household furniture Graph 5: Weekly cost of household furniture $45 $40 $40 $35 $30 $25 $29 $29 $29 $20 $15 $5 The data reveals that household goods are most expensive at infancy and least expensive for children of pre-school age. However, between pre-school and secondary school the cost of household goods remains steady. Household goods are a notable weekly expense for households with an infant, with the weekly cost being $40 for this age group. This is due to the need for essential furniture specific to them such as prams, changing mats, cots, high-chairs, bottles, teats, bath seats, safety gates for stairs and sterilisers for example. Bubhub.com.au 11 recommends the essential furniture items as a cot ($600) 12, cot mattress ($90) 13, baby bath ($25), change table ($250) 14, pram ($500) 15, baby capsule/carseat ($250) 16. From pre-school age onwards the cost of household goods are solely based on the cost of furnishing a child s bedroom (1 single sized bed, drawers and standalone cupboard) ($1500) 17 and not on costs shared with the rest of the household. This does not significantly change over childhood Suncorp Bank

9 Communications Graph 6: Weekly cost of communications $16 $14 $15 $12 $8 $6 $4 $2 The early stages of a child s life do not necessitate any cost for communications. However, this becomes a very significant factor for children of secondary school age. The inclusion of broadband for educational purposes is deemed a minimum essential. For this report it was also deemed that computers and the internet are fundamental educational tools. Calculations are based on the cost of an average priced personal computer (00) with a five year lifespan and light broadband use ($40 per month) 18 For children of secondary school age, a mobile/smart phone has been costed at $8 per week, (based on an average mobile phone with a 2 year lifespan and $5 phone credit per week) Cost of Kids Report

10 Sport, entertainment and leisure activities Graph 7: Weekly cost of sport entertainment and leisure activities $25 $20 $22 $15 $5 $12 $2 $3 Whilst some may say that extra-curricular activities are a luxury, this reports argues that physical, psychological and social needs are met for children during extra-curricular activities. The social inclusion and participation budget for children contains books, toys, activities and a minimum amount of pocket money (primary and secondary school level only). The cost for extra-curricular activities (including toys) gradually rises as children grow older. For infants the cost is $2 per week. Although it is not a significant cost, it is considered vital for an infant s baby s development. As children grow older, the cost of extra-curricular activities increases and it is at primary school that there is a notable increase in cost to $12 per week. As children grow and enter formal education, they participate in more activities and this accounts for the significant increase in cost for this category between pre-school age and primary school age. The extra-curricular activities budget for a primary school child also allows for weekly sporting activities, occasional trips to the cinema, spending money and items such as bikes. This accounts for participation in society and enables children to engage in common leisure activities. Between primary school and secondary school there is once again a significant increase in cost. At this stage of childhood, extra-curricular activities are one of the highest expenditure categories, costing $22 per week. It includes items such bikes and activities such as swimming, soccer or football, occasional outings to the cinema and pocket money of approximately per week. While it is recognised that the cost of extra curricular activities is substantial, it is nevertheless regarded as vital to a child s development and their participation in society. 10 Suncorp Bank

11 Education Graph 8: Weekly cost of education $35 $30 $32 $25 $20 $15 $18 $5 In this study it is at the primary school stage of childhood that education costs first come into play. Education costs include the cost of uniforms, voluntary contributions (or fees) and other necessities. The cost of education in Australia varies substantially depending on whether the child attends a public, private or Catholic school. The costs in this report are based on public education only and represent national average data for the 2012 school year, collected by the Australian Scholarships Group Cost of Kids Report

12 Transport Graph 9: Weekly cost of transport $16 $14 $12 $8 $6 $4 $15 $15 $2 It is assumed that most children in Australia reside within 25km distance from their school. For those that reside more than 25km away, transport is heavily subsidised by the government. For this report the average cost is based on 25km of travel 20. The costs for households that drive children to and from sport, leisure and entertainment activities, have also been built in. In terms of driving children to school it was not possible to assume what proportion of petrol was applicable to each child and therefore transport costs are not given as direct costs of a child, as it was decided that these costs would be solely borne by parents and/or carers Suncorp Bank

13 Childcare Graph 10: Weekly cost of childcare $90 $80 $80 $70 $60 $67 $50 $40 $30 $20 Child care costs vary from provider to provider and from state to state and they are not regulated by the government. Most child care providers charge a minimum daily rate or an hourly rate. Some places include everything in the price, such as food and nappies, while others, such as family day care, require parents to provide everything 21. In June 2011, more than 1.9 million children aged up to 12 years usually attended some kind of child care 22. Long day care was the most commonly used type of formal care (14 per cent) and this was followed by before and/or after school care programs (8 per cent). It is worth pointing out that the costs reported here are the costs to parents after the Child Care Benefit and the Child Care Rebate have been taken into account. For the majority of children who usually attended formal care (63 per cent or 544,500), the usual net cost was less than $80 per week. Long day care costs were typically higher than other forms of care, with a median cost at $67 per week Cost of Kids Report

14 Savings Graph 11: Weekly savings $6 $5 $5 $5 $5 $5 $4 $3 $2 $1 Like all cost drivers, the cost of savings is an important element and covers for all unexpected expenses, over and above average costs. It remains consistent across all age groups. 14 Suncorp Bank

15 17 the most expensive year of a child s life The following table illustrates the cost on a weekly basis for each age category based on the data in this report. Graph 12: Average cost per week of raising a child $250 $200 $206 $167 $237 $150 $163 0 $50 Due to the unique costs that are present in the later stages of a child s upbringing this report finds that the teenage years are the most expensive period of a child s life, with 17 the most expensive year. While the fundamental costs for raising children remain remarkably constant throughout childhood it is the new expenses, unique to teenage years, such as mobile communication, broadband, technology used for education and increased entertainment as children become more independent that make the significant difference. There are also a number of other large expenses unique to the later teenage years that cost parents a small fortune such as additional loading on the final years of secondary school (Years 11 and 12) due to additional subjects undertaken and as a result additional tuition expenses incurred, entertainment expenses (secondary school formal, graduation), the cost of insurance (both health and car) and additional petrol money, which can skyrocket during the later teenage years. It is on this basis that it can be expected that 17 is the most expensive year of a child s life. Cost of Kids Report

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