Parents told: Work out how much kids will really cost
What could you do with $15,000?
A new car? A nice holiday?
Bad news if you are a parent on an average income: It's probably what you spend every year on one of your children.
Parents are being warned it is not the big things that will sting them in the pocket when it comes to raising their small people. Instead, it is the everyday costs that add up and put the biggest burden on their bank balances.
New research from RaboDirect shows almost half of New Zealand parents rate the cost of school, and the additional expenses that go along with it, as the biggest financial pressure on their household.
Those earning more than $100,000 were more likely to count school as their biggest child-related expense. Wellingtonians were also more likely to feel education was a financial burden, with 56 per cent naming it their number one pressure. That was well ahead of Auckland's 49 per cent and Canterbury's 44 per cent.
The research also found young families with children aged up to 12 felt the most pressure of paying for their children's education, with 66 per cent citing it as their main expense, compared to families with teenagers at 25 per cent.
READ MORE: Kids dip out as cost of school trips rises
Education outstripped other costs such as sport and hobbies, which 17 per cent said was their main bill, and visits to the dentist and orthodontist, at 14 per cent. The results were the same whether parents sent their children to public or private schools.
The RaboDirect survey did not include the cost of food.
Inland Revenue estimates families on an average income would spend about $300 a week on raising a teenager, or $15,000 a year.
Younger children were slightly cheaper, as were the second and subsequent children in a household.
This is the same figure used by some banks to determine the level of expenditure associated with having children when people apply for a home loan.
Westpac Massey Fin-Ed Centre director Pushpa Wood said many new parents did not how much the added costs would put pressure on their budgets once another person was added to their families.
She is involved with work done by Plunket and BNZ to gauge the level of spending on babies and toddlers.
In 2014, the average Kiwi parent spent about $2000 a year on food for a toddler, $800 for clothing and about $11,500 in childcare.
Other things such as bedding cost more than $1500 and car seats, strollers and other accessories added hundreds to the bill.
Overall, the research estimated the average parent spent $13,644 on a baby in the first year of life and $18,765 a year on toddlers, including childcare.
Wood said parents would be surprised by some of the incidental expenses. "School is meant to be free but then you have the donations every year and other costs. At each stage there are a different set of costs."
She urged parents to start a savings plan early. "People need to seriously look at what is their income level and what are the costs involved. It needs to be planned for. Most people don't think about how much these things add up."
Financial adviser Liz Koh said some parents were guilty of going overboard.
"Spending is sometimes seen as an act of love – they feel the more they spend the more their children will feel they are loved by their parents. There is also peer pressure and perceived status around spending on children. I guess you add also the perceived link between the cost and quality of education, for example a belief that private schools offer a higher standard of education than public school," she said.
Koh said she had seen some parents' spending get out of hand and put their own financial situations in jeopardy.
"I have seen this with parents of children who are high achievers at sport, having to pay for club membership, equipment and travel and parents who sacrifice their retirement savings to send children to private schools. There is balance needed. You can't help your children in the long term if you run your financial resources too low."
RaboDirect general manager Mel Templeton said it was surprising that although so many parents were worried about the cost of schooling, fewer than 10 per cent were doing anything about saving to pay for it.
"Every little bit parents can set aside goes a long way to contributing towards their children's future education and unlocks the potential of the next generation of New Zealanders.
"Fortunately it doesn't take much to start a savings habit and parents can start now, even though the school year is winding down and families are heading into the Christmas period," she said.
She said many grandparents wanted to do something for a new baby and a good way to get involved could be to start a savings account specifically for a child's education. "It allows the parents to carry on with all the other things they have to worry about?"
She said a small amount put aside regularly could become significant over five or 10 years when a child started to enter more expensive parts of their education.
Whangarei mum-of-four Rachel Parangi said school and the associated costs were one of the biggest expenses involved in raising her children.
But she said it became more of a problem as children got older, rather than less, as the RaboDirect survey suggested.
"My daughter wants to play basketball and there's a fee for that, then there's netball and there is a fee for that. Then she wanted to do an elective so there's an extra fee for that. It's not one set fee you have to pay, it depends what they decide to do."
She estimated that including stationery, fees, uniform and other extracurricular expenses, it cost about $600 a year to send each of her two older children to public secondary schools. The younger children, still at primary, cost a couple of hundred each a year, she estimated.
"Good food is also expensive. We're trying to eat better and it costs more. I'm trying to cut down the sugar in the kids' diet and looking for the alternatives but if I'm not up and at the markets early on a Saturday, it's expensive," she said.