In an older post I made public our first year spending for our newborn daughter. Well, it’s been two years since that post so thought I’d give an update on year 2 and 3.
One small addition (literally speaking) is we had a son 6 months ago, so for those keeping track that is spending for one daughter for 3 years, and spending for two kids for 6 months of those 3 years.
Just a recap on year one costs: We were set back to the tune of almost $51,000.
$13,000 of that was trading up to a bigger vehicle so that cost will be spread out over several future years.
$30,600 of that was the cost of my wife not working for that first year.
So those two significant costs excluded, the rest made up about $6,500.
You can read more on the details of that post here.
A lot of people say the first few years of a child’s life don’t have to cost much, and even though we were generously given a lot of things, it still came out at a lot. Largely due the fact that we needed a larger car, and the lost income from my wife not working in the first year. These are large costs, and I think often ignored.
One other impending large cost we will likely have is a new house. Our current house is 80 square metres, and 3 bedrooms. Technically enough for 2 kids and 2 adults, but not ideal. Not for us anyway. We will be upsizing house to cater for our growing family. Again, kids are not cheap!
This whole financial independence was much easier when I first discovered it as a kid free adult. Our financial independence will be delayed many years, and that’s why I am keen to pivot sooner, rather than later, towards coast FIRE.
So how have the last two years gone?
The cost of children – Years two and three
Nappies $787
Wipes/Toiletries $530
Books/toys/Presents $268
Clothing $945
Food $157
Photos $225
Medicines $348
Sport/Leisure/Entertainment $1,161
Furniture $1,230
Hospital $120
Birth certificate $33
Car seat $638
Opportunity cost $0
TOTAL $6,442
Commentary: An average of $3,221 per year for years two and three.
About half of first year costs (not including the car and opportunity cost). Thanks to being able to re use clothes, books etc. We also didn’t experience the horrendous pre birth costs as we did for our daughter.
For the eagle eyes comparing between the first year, you may have noticed I’m not including KiwiSaver/Savings account contributions anymore. That’s because this is a very personal discretionary expense, that I’d rather not divulge. It’s all very individualised how much a parent decides to save for their children, if anything. So, in reality, our personal cost is a bit more than the number above.
As for the food costs, that is really higher, but too hard to determine. The $157 is for infant only food. Food that is only for them. But our oldest also eats plenty of other food that we all eat. Shared food. That’s why it’s hard to put a number on that as it is food we would be getting anyway, without kids. At this stage, it isn’t a huge amount of extra quantities than we would be eating as a childless couple. At a guess, maybe you could add $1,000, over two years, to that number.
Other points of note:
We had our second child in November 2020. A son. So, for 6 months of the third year of having children, we had expenses for two children, and will do so moving forward. We are just about to finish our paid parental leave period, so the opportunity cost of mum not working is currently zero. Once that payment stops, the opportunity cost for the first half of the fourth year of parenthood will be substantial, as mum is not returning to work until the end of the year.
We had to buy a new bed for our 2 year old daughter after she jumped out of her crib!
We had to buy a new car seat for our 2 year old daughter. This should last for several years. Her old seat has gone to our son.
We are spending a bit on sport and leisure for our daughter, and will do the same for our son. We want them to experience a wide variety of activities. At the moment, we are paying for swimming, gymnastics and dance. I imagine this figure will increase as our son gets older.
I expect to see nappy cost going down substantially. Daughter has been using the potty for several months now, and son is finally over the worst of his colic. We were given several nappies as a gift too, so this amount would have been higher.
The amount we spend on wipes will never cease to surprise me. I swear half our bin each week is full of wipes. The amount of spills and leakages are never ending.
Even though children have cost money, there are certain areas where we are now spending much less such as entertainment, eating out, and travel. With young kids, these things are pretty hard to have time for, so there are areas of our budget that have been reduced because of having kids.
Finally, I will never underestimate the support we have received from family. Whether that is free childcare once a week or gifts of clothing, etc. Without these support structures our spending would have been significantly higher, particularly in the second year when my wife went back to work. We had 2-3 days a week she could work whilst one of the grandparents cared for our daughter. If you don’t have the same support we have had, then your expenses will need to factor that in.
Final thoughts
Every child and parent is so different, so your expenses will vary. But I hope this breakdown at least gives you an idea of what to expect.
Again, our lives have changed substantially since having kids. Financially has slowed us down for sure, and has drastically increased our retirement savings needed, however, they have enriched our lives in so many ways. So much in fact, that we are attempting to design our lives so that we can make the most of our 40’s and 50’s together.
Having children has been the biggest motivator to get our financial house in order and for that, I will never complain about how expensive children are.