The Cost of Raising a Child

Jason · 00:00Welcome to episode 214 of The Numbers Game. I'm Jase, and I'm back with Nick and Marty. How are we, fellas?

Marty · 00:07Going well. Very excited, Jase, to have, uh, Nick back. And, uh, Nick has a sort of a new title since, uh, he's last been on the show. And that title is Dad. Congratulations, mate, how exciting. And I seem to look more tired than you, but 53, that doesn't make sense, man.

Marty · 00:26How are you going, mate?

Nick · 00:27Oh man, look, I've just found a really cool filter that I can use. So I wouldn't be too worried about that until you see me in the flesh, probably next week, but going, going well, mate, just, um, yeah, taking it all in, um, on a steep learning curve, but it's, um, It's good. I'm enjoying it so far.

Nick · 00:45I'm enjoying it.

Marty · 00:45What's the one thing that's occurred that you didn't expect or are you under such control? You've anticipated everything. Oh, no, no, no, no, no, no, no,

Nick · 00:53no, no, no. Um, probably I would have to say

Nick · 01:00the, uh, just, you just, you actually have no idea. So, but that's the one thing I didn't expect. Like, and you know, we, we were lucky enough to be in the private system.

Nick · 01:13So we had a few nights at hospital, which was great. Um, which meant we had midwives, you know, helping us and if we needed anything, we would call them and they would show us how to do things. But I didn't expect, um, just to not know anything. Just to have absolutely no idea and to be, I guess, thrown into a situation where, you know, someone's life is in your hands and you actually don't know what to do.

Nick · 01:38So, I guess I didn't, I don't know what I thought, but I'd, yeah, that was probably the biggest surprise, um, and, Yeah, it just makes you understand how important those, um, professionals are around you. Um, and I guess if you go back, you know, 50 years or a hundred years, people had family around

Nick · 02:00them, but life's a bit different now.

Nick · 02:01You need support outside of the family. So that was probably the one thing I didn't understand how much I didn't know or had little idea I had, um, and how much I would be learning, um, would be learning every day, every day. Um, yeah, and then also just not to get stressed about it all too, you know, like it's, you are on a learning journey and you've just got to let it run its course and yeah, every day gets a bit easier and you learn something new and that means you can deal with, you know, a certain situation next time better.

Nick · 02:35So yeah,

Marty · 02:36it certainly is. Uh, I still remember coming home with Charlie and Cole and I looking at each other going, what now? It's so surreal for all, for all the reading you do and everything about it. I love it. You pretty much work out, just love it, feed it, change it, put it to sleep. Yeah, well that is the

Nick · 02:55one, the one good thing.

Nick · 02:56They are, they are predictable. They're pretty simple compared to us, you know. I

Nick · 03:00think I was just saying to Tommy, our producer, they've got four things on their mind. It's either, I need to eat, or I need to do a poo or a wee. Or I've got wind. There's only three things really. If you can cover off those three bases and you know that, uh, to check those three things out, um, or they're cold.

Nick · 03:16That's probably the other thing that I've noticed too. Sometimes they're cold, but, um, they're pretty simple compared to us.

Jason · 03:23I don't know. I was going to say that you pretty much ticked off most of the problems that Casey reckons I have. Like if I'm getting a bit carried away, she's like, do you need to eat?

Jason · 03:32Well, yeah, usually it's that, um, have you had enough sleep? Probably not. Do you have wind? Most likely. It doesn't need a drink. Yeah. Yeah. That's the one thing I do. I stay hydrated. I've always got water next to me. That's the only thing if, if Casey's. Having a bit of a time. I'm like, when was the last time you had some water?

Jason · 03:51And she'll be like, Oh yeah. Like, you know, she's, she's probably like, I describe her as a Sultana. She's like just permanently in a state of dehydration. So

Marty · 03:59yeah,

Marty · 04:00I think I would get like that. Congratulations, Nick. I got to meet her. She's beautiful. And, uh, It was nice to see, uh, you and Alicia with, uh, a beautiful baby girl.

Marty · 04:10It was, uh, quite a treat to, uh, be in the room. mate. Thank you. Well done.

Nick · 04:14Thank you. And, uh, I've forgotten the name of the book that you brought us. But, um, as you'd expect with Marty V, Educational. The book, what was it called again? Um, I can't even remember. The series of books. Oh, no.

Marty · 04:27The Little Miss, the Little Miss Men books.

Marty · 04:29Yes. Yes. Yeah. So a

Nick · 04:33very practical gift as you'd expect from the great man.

Jason · 04:37Well, it's great to have you back, Nick, and we are going to fire into a bit of a baby or child related episodes. So for those that have tuned in to catch up and hear how Nick's going, uh, we're going to let the child related times keep on rolling and actually, um, came across your mate, uh, on X, Nick Elon Musk that shared an interesting post just, you know, sometimes you're doing your doom scrolling.

Jason · 05:00Um, and. And it actually caught my attention. I mean, I think I was, you know, thinking about coming to visit you and meet little Rosie. And so babies were hot on the, the mind and it reeled off a statistic and we love our numbers here. So I'll just tell you what it is straight off the bat. It's about the declining birth rates over the last 75 years.

Jason · 05:19So in the 1950s, uh, when times, you know, Marty, you might be able to tell us about that. Um, but the, the, the global fertility rate was around five children per woman. Um, and Australia was closely aligned with this average, so they got the global number and then the Australian number, um, at around the post war baby boom.

Jason · 05:40So most, most women that were having families were giving birth to around five children. Fast forward to today, and they've got the numbers as late as 2023. There has been a steep decline over the decades. Um, do you want to have a guess, Marty, as to what the fertility rate is compared to, or today, compared to

Jason · 06:001950?

Marty · 06:01Uh, I'm going to take a stab at saying one to 1. 5,

Jason · 06:07not bad worldwide numbers, uh, a touch over two children per woman. Uh, but in Australia, we're down to 1. 66 children per woman. So you're very close on the 1. 5. Um, any comments or thoughts on that, or, you know, off, off the top before I reel into, you know, some of the reasons for declining fertility rates.

Nick · 06:29I'm not surprised, like just, just looking around at, you know, the, your inner circle and your friends, um, it's pretty rare to see people with more than two, um, just if I'm just quickly thinking about my circle of friends, yeah, most people have got two, some have got three, but you just, you just don't see that very much, so that, that makes sense to me.

Marty · 06:49I think, I think two could be a number of different things, but even changing values. I mean, people were married a lot earlier going back even 30 years ago. getting married at 22,

Marty · 07:0023. Um, now, obviously people getting married later for whatever reason. And, um, that would play some part. I think also there's definitely a financial, uh, financial burden as costs have increased over time, you know, house prices have gone up considerably.

Marty · 07:16So there'd have to be, you just can't have. Uh, you're very fortunate to have, um, you can't have a parent at home anymore, virtually. Uh, if you want to, if you want to get into a home. So I guess those factors come into play. It's crazy though, when you think about it, we're here to, we're here to produce kids really when you think about it.

Marty · 07:36Thankfully we have migration to make up the numbers, Jase, just to keep inflation burdening. So but um, yeah, but it is, it is, um, yeah, it is a, I don't know how I feel about that. I feel like in some ways it's a, it's, it's an interesting time built around family values, but there's just, everything evolves.

Marty · 07:56And obviously that's a, that's a, that's a damning stat really. I think in

Marty · 08:00many ways.

Jason · 08:00Yeah, it did, it did jump out at me. And again, you know, um, Case and I have had that conversation of, you know, and it's still an ongoing conversation of whether we start a family or not at all, and that's a personal choice for us, um, around, you know, whole different bunch of reasons.

Jason · 08:14Um, but again, you know, the, the more that. the norms or, you know, societal kind of cultural things change around what is normal now and what is, you know, not normal. So some of the things you, I mean, I'm in a room or two virtual room with two smart guys. So you've actually ticked off quite a lot of the points that come up as to the reasons for the decline in fertility rates today.

Jason · 08:32And, you know, the big one that we talk about a lot is economic pressures. Um, so, you know, your housing costs. Um, beyond housing costs and cost of living is also childcare costs. Um, you know, probably something Marty, you know, you might be more aware of than Nick at the timeline of where, uh, Rosie's at the moment, but the costs, you know, it's more than a hundred dollars a day to put a child into childcare so that, you know, mom and dad can go off to work.

Jason · 08:55So if you're already looking at, that's probably more than that now, but at least 500 a week, if you

Jason · 09:00wanted to have a child in childcare, and that's probably. quite reasonably priced it's more than that now, I assume.

Nick · 09:06Yeah, I did some research on this. Jason, because I knew you'd bring this up. So I just had a look at.

Nick · 09:12Um, busy B's and I assume that's a popular one because when I went to the, um, so I'm talking childcare now, when I went to the dropdown box, there was, um, I don't know, maybe a hundred suburbs there. Um, so yeah. 0 to 2 years per child is 175 a day. So, um, now obviously there's, there's subsidies from the government.

Nick · 09:38Um, I had a quick look at that, uh, from what I could work out, um, up to around 80, 000 in income, you get most of, or 90 percent of that back, which is the max you can get back, and then it was a sliding scale that went down, um, one percentage point for every 5, 000 that the household. But hypothetically, you know, if you're looking at 175 a

Nick · 10:00day, uh, you're the accountant.

Nick · 10:01What's that times? Five, eight 50 to eight 50 a week. Uh, two kids. So you're looking at 1700 a week.

Jason · 10:0775 times two. Yeah. 1750 a week. Yep. Now most people

Nick · 10:14I would think. Most people I would think, um, this is definitely our plan, but I think if you're having kids, you probably have them pretty close together. So they're, you know, you go through all the chaos at once, uh, and they grow up together.

Nick · 10:26So it's not crazy. And I've got mates of mine in this situation that they've got kids, uh, two kids at childcare. Um, and yeah, there you go. Maybe. Maybe two grand a week, just under. And if you're a good income earner, you might not get, you might not get much back from the government. Now, the argument would be that well, if you're a good income earner, you shouldn't deserve it back from the government and you're out there earning, but I don't know, like what's a good income these days, you know, it's so expensive to live.

Nick · 10:54So it's significant consideration.

Jason · 10:58Yeah. And if you're out there bringing in two and a

Jason · 11:00half a week, which isn't, you know, that far out of the realm, and you're going to lose one and a half of it. to put two kids in childcare. Like then comes the, the, I guess the conversation of, is it worth going back to work?

Jason · 11:11And then that comes to, you know, one of the other points around, um, the cultural shift of increased opportunities for women, like women wanting to be, you know, in the workplace, advancing in career, not that they didn't want to. Back in the day, but let's say it wasn't as readily available or as normal for people to be focused on their career.

Jason · 11:28Um, so that's another one of the big shifts. So economic pressures, housing, childcare costs, and just the general cost of raising a child per year. Um, which you do some research on that as well. I mean, I think this would be,

Nick · 11:40yeah. So this is a, this was a survey done by. Um, July this year, and I assume this means, um, I'm assuming this number is, uh, without education because it's a, it's an average across all costs, but, um, on average, parents are spending

Nick · 12:001, 073 per month on child related costs, which equates to just under 13K per year.

Nick · 12:07So that's 13 grand a year. Um, I think that's not too bad. Um, and then I did some research on the education costs, um, as well. So let's talk about Melbourne because that's where we're based. Um, but the lifetime cost to educate a child through government, um, is 103, 000. And this doesn't include, um, you know, uniforms and stuff like that.

Nick · 12:31This is just school fees. Uh, Catholic was 184, 000 and independent or, um, obviously that being private was 307, 000 to educate a child. So, um, How many years are kids at school, Marty? 12? 13, we've prepped. Yeah. Yeah. So you're looking at 300, 000 to educate a child. So about 23, 000 a year. That's what we see through the planning business.

Nick · 12:59It's a bit cheaper

Nick · 13:00during, um, Uh, primary and then secondary school fees go up. We see a lot of parents do Primary, um, school through the government system, and then aim to have at least the option to send kids to private school, um, come year or come secondary. But it's a big decision, you know, 30 grand a year, you probably got to earn 50 to net 30, most people.

Nick · 13:24Um, and this is where the argument comes in, you know, is private school really worth. Uh, the extra money, yes or no, there's a lot of differing opinions on that, but um, one thing that we do find is that if, if our clients, uh, do have the means to get ready to send kids to private school, that's exactly what they want to do, it's not even a question.

Nick · 13:45Um, so yeah, but all these things, mate, you know, um, You've got to ask yourself, it's a big commitment to take on, isn't it, you know, um, 12 grand a year minimum, so over 20 years, that's, you know,

Nick · 14:002, 250 plus school fees. So it's, you know, it's probably somewhere between 700 grand to a mil, um, to have a child realistically, depending on your lifestyle and your expenses.

Jason · 14:12Yeah. Well, I mean, that, that, that's some confronting numbers there, isn't it?

Nick · 14:16Um, big numbers, big numbers. I'll be keen to just have a quick chat too, about the, um, the benefits of private school and, you know, particularly get Marty's thoughts on this given, you know, he's got, uh, a young, a young child who's pretty close to secondary.

Nick · 14:32Um, so is there a benefit, you know, it's 30 odd grand a year. Um, what are the benefits of private and is it worth the money too?

Marty · 14:40Yeah, I think. It's an interesting topic of conversation with in our household consistently. But for me it was like initially, yes. Um, but I think what people miss is what type of education is best for your child and what is

Marty · 15:00best for your child as well.

Marty · 15:01Like a lot of the times we think it, we think of it from our own perspective. Like I remember going to St. Andrew's in Noosa going, this is the school I would have loved to have gone to. Right. And I have a chance here to let Charlie go to that school and it was a good school, but it was religious. And, um, and for some people that's great.

Marty · 15:20Charlie hated religion. And we come, you know, Coles from an Anglican background, grew up Catholic. Not that I'm a religious person by any means, but it's like, he literally just It was fascinating to see his response to it. So again, it's, it's, it's fascinating to see. You got to find the right fit for the kid.

Marty · 15:41Like I know now what I've learned over the journey, um, is Montessori seems to be where he did best at, which was very practical, tactile, still incorporate a lot of the education that the mainstream schools had, but it was like he had his most upswing in learning.

Marty · 16:00through that type of schooling, strangely enough.

Marty · 16:03So, and we've been doing a lot of reflection on this as to what we want for the kid as opposed to whether the kid best thrives as well. And sometimes you just go, well, you should just go to school and go to public, go here because that's what the parents say and that's what you should do. But then I'm just very reflective on some of the stuff that's going on with kids and some of the mental health issues and a lot of the bullying that goes on.

Marty · 16:29as well. And that's a whole different topic again. But you just have to find the right fit of safety, um, inspiring learning and for the kid to be excited about learning. And you've got to find that fit. But sometimes it's suburb related. Sometimes it's, this is what it is locality wise and people don't always consider those options because it opens up too much of a can of worms.

Marty · 16:52But I've noticed since Charlie's been doing the, his homeschooling, Um, it's a big burden on Colin, she's doing a fantastic

Marty · 17:00job and he sort of escalated his learning because of it. However, the more I look at that previous Montessori experience, the more I can align what he loves to do compared to that type of education.

Marty · 17:13So I think, and again, it's, it's people are in different situations, like have they got the means to even pay for it? You know, I think definitely there can be some great connections coming out of it. But then I go, at the end of the day, it's like, if they're good learners and they're curious learners, you know, they're gonna, I've seen many people in, in public schools do exceptionally well as well in life.

Marty · 17:39So, I'm sort of balanced in my view as to what provides the best outcomes. But I definitely think there's an element, As a social network that, um, is of benefit in the private schooling system. That's probably, regardless of everything else, that is, that is the, the big plus.

Nick · 17:57It's one thing that I listed, if I was to

Nick · 18:00name a benefit, um, and I guess I've, I'm saying that because, you know, coming to Melbourne, not being from Melbourne.

Nick · 18:08Um, and going into business, the one thing I did notice was that people that I knew who came through private schools, um, had a lot of opportunities opened up purely because, um, you know, whether their, their parents were in business, um, other peoples that they went to school with parents were in business.

Nick · 18:29So I do definitely think there is an advantage from a network point of view if you go to private school. Um, but you know, whether or not. Uh, you're in a position to take advantage of that, is another question, right? And I guess that's what you're saying, like, it still comes back to the education and the growth of the child, otherwise what's the point of having the business network, um, if they're not in a position to utilize it, you know?

Marty · 18:53Well, I've always, I've always found, Jason, I don't know how you felt about it, but I, I went to public school and the one thing that

Marty · 19:00I always notice with people in the private school sector, how self assured they felt. Like they were, they were always felt to be more considered and it might be a total.

Marty · 19:11read in the wrong direction from me, but I always had that feeling that they sounded self assured. There was a level of confidence that they had that I just didn't see in the public sector as much. So that, but that's just from my own read on it. Jason, I don't know what you found.

Jason · 19:26Yep, same read. Yeah, exactly the same.

Jason · 19:28I'm just trying to, you know, sometimes conversations like this, you then start to think back and I'm trying to think about what primary school or high school people am I still connected with to this day? And if I am, why? Um, and then I think about my clients or friends in my friendship group who were from a private school background and how I'm Their friendship circle to this day, probably still initiated from the private school schooling that they had rather than people they met after university or moving into the, the, uh, the

Jason · 20:00job market or the job world.

Jason · 20:01So yeah, interesting thought process though. I mean, do you guys still see or speak to many people from high school or was it more people that you met?

Nick · 20:07I don't. None.

Marty · 20:10Yeah. Well, see, I'm different. I've got probably four of my closest friends, uh, from high school still. And they've all sort of gotten out of the valley, so to speak, even though we keep going back in there because we, we love it, but it's, uh, but they've all gone out and done their own things and been business owners or professionals and, and we still, we still catch up, but that's, I think that's a bit of an anomaly.

Marty · 20:34I don't think that always happens that way. No, no, no. They're very fortunate to still have those friends.

Jason · 20:38I love it. Well, look, it's been a quick one to unpack today on this topic. We would actually love to hear your thoughts. If you've got some hacks for how Nick can raise his baby and, you know, cut some of these costs that are ramping up.

Jason · 20:51Feel free for parents out there to send through their hacks and tips. I would love some more. And then

Nick · 20:55Nick, you. I'll, I'll just say one thing too. Like at the end of the day, It

Nick · 21:00is a lot of money to have a child and you know, we, we always revert back to what we do in our day to day lives. And I'm thinking about financial planning now.

Nick · 21:10Look, we have these conversations with people. Um, if it is something that you're thinking about that. Geez, I don't know if I can afford to have a child. Well, part of what we do is we actually sit down and work the numbers out, you know. How long, um, can one of the, um, one of the, um, parents have off work?

Nick · 21:29What kind of buffer do you need? Can you afford to go private education or not? How do you set yourself up to do that? Sometimes it can just be, um, a relief to sit down and talk about that stuff. Because the last thing you want to be thinking about when you're trying to have a child is the money side.

Nick · 21:45You need to be all in on that. You know, trying to get pregnant and have a child. So, you know, if people think about this stuff and, and they are worried about it, this is what financial planning is. It's not just about investing money. It's about, you know, making sure that, you know, you can provide for your

Nick · 22:00family and have a family.

Nick · 22:00So, you know, reach out to a planner and obviously we're more than happy to help and innovate. Um, if this is something that you think is holding you back from having children.

Marty · 22:09And the other thing I'd say, having a lot of friends now that have had kids through private school and then come out the other side of it.

Marty · 22:16Don't anticipate your kid's going to go into the job you think they're going to go into. I've seen so many kids pivot into agriculture and fashion and, you know, just, just going off tangent with something totally different. And the parents just go, well, I guess we did our best, but that's a good thing too, right?

Marty · 22:37That the kids want to express themselves in new ways. So it's, uh, it's funny what comes out of the wash, but yeah, fascinating topic of conversation. Yeah.

Jason · 22:45And that is a great reminder and a great call out, Nick. I think, um, you know, people who kind of go, Nah, it's out of reach for me. I can't do it. At least have the conversation first, because you never know there might be some tweaks and changes to your financial situation that, you know, a financial planner

Jason · 23:00will be able to help you understand and make the best of your situation.

Jason · 23:03So thank you for that, Nick. And again, congratulations. It's great to have you back on the show. It hasn't been the same without you. Um, Thank you for everyone listening. Like, subscribe, rate, all the usual stuff but until next time.

Marty · 23:16Nick and Alecia have a baby. Game over. So cool.

Jason · 23:22This podcast is for educational and informational purposes only.

Jason · 23:26The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional. Individuals on the podcast may hold positions in the companies discussed. ---