How much do kids cost?

HOW MUCH? They may be cute but children are also expensive.
HOW MUCH? They may be cute but children are also expensive.

What is the cost of raising a child?

Take lots, add plenty, multiple it by heaps, and you have your answer.

Or, you could take a slightly more robust, scientific approach.

IRD came up with a round figure in 2009 for raising a child until the age of 18 of $250,000, or about $14,000 per year.

And more recently a group of researchers produced some interesting statistics about the price of procreation which were presented to an official statistics forum last year, ostensibly to help the Government to review the formula being used by Inland Revenue to calculate child support payments.

The paper Costs of Raising Children found that the average costs of children vary widely depending on the age of the child, households' income and the number of children per home.

But despite the different factors which altered the costs up or down, the study turned up a final figure of an average spend of $403 a week, for two children, in a modest income home. That equates to about $10,478 per child annually.

The study used a formula which compared the expenditure of households with no children against those with children.

It found that a low income household paid under $150 on average per week for a child aged up to 12 years while a high income household would pay well over that amount for the same kid at about $430 a week.

The more you earn, the more likely you were to spend more on your little darling - so next time you curse your empty wallet or despair at the price of ballet or karate lessons think of the low income earners who manage to get by spending much less.

Kapiti mother-of-two Amanda Hanan had some blunt advice for parents trying to curb their expenses.

"If you want to have money, don't let your kids do after school activities," she said laughing.

Swimming, running - it all costs, Hanan said. And the additional expenses on top of the basic needs such as shoes, clothes and food, make it very costly overall.

Hanan said the costs were manageable - until her two children went to school.

Then it was a case of "every week there's something", whether it was a mufti day, theatre performance or - the most expensive of them all - the famous class trip.

Hanan reckoned a trip away for a week cost about $500. Multiply that by two children, and that's $1000.

And while more children in a house meant more money was spent on average, economies of scale were found by the Costs of raising children study, with each new child costing less than its predecessor.

The study estimated a low income household would spend about $480 per week on four children ($120 a week per child), about $390 on three children ($130 a week per child), and about $280 on two children ($140 a week per child).

By contrast, high income earners would push the boat out and spend about $1100 per week on their four kids ($275 a week per child), just over $900 on three kids per week ($300 a week per child) and over $700 on two kids ($350 a week per child).

Cheaper by the dozen after all?

Not when you no longer have two incomes.

"That has been the biggest surprise," Hanan said.

"You actually need your income to grow with your children, not reduce because you want to stay at home with them."

For her household this has meant her partner needed to get a better job and Hanan also looked for opportunities to supplement the family's income by taking part-time work, but that's been easier said than done of late.

It will come as no surprise to parents out there that teenagers, bless them, were found by the study to be more expensive than younger children.

Teenagers aged between 13 and 18 years cost a low income household on average just under $200 per week, while a middle income family paid just under $300 per week and high income earners' a rather large jump to about $470 per week per teenager.

Hanan recommended a Weetbix buffet to stop teenagers eating you out of house and home - meaning, it was the only food in her house that was unlimited in quantity.

"They don't really like it that much so this way they are only eating it if they are really hungry."

But how can you manage the costs of your kids?

Rather boringly, it's another case for a budget. Sorted.co.nz has a budget calculator, and some sage advice for parents-to-be.

The site said you don't need to be a multi-millionaire to raise a child well, but you do need a plan that covers all the bases. Like Hanan, you need to take into account how your finances will change - ahem, dwindle.

Make sure you are getting all the benefits you can such as paid parental leave and tax credits.

Have a really good think about your outgoings. This could include, but as Hanan certainly found, are not limited to clothes and food. You could also be staying on at work and need to pay for childcare, or plan to send your child to a private school and then there were those blasted extra activities.

All of these expenses need to be planned, and potentially, saved for.

Consider which items you will need to buy new, and those you can grab second hand.

School uniforms were an obvious choice for Hanan, but she said they can be hard to come by so keep a bargain eye out for second hand sales.

"I would like to buy everything second hand, but it's just not possible."

For the new buys, it paid to shop around, she said.

Hanan frequents an outlet shop down the road where she picked up quality running shoes for her 13-year-old.

"But they are still $150 because he is in men's sizes," she said.

And I guess her choice about which shoes to buy summed up the trade-offs any parent would need to make when spending on their child.

Where you could be cheap, by all means - be cheap - but perhaps not at the cost of your child sitting in a classroom by themselves while everyone else goes to the pools for the sake of saving $2.

And as for a return on your investment? Well, that would be priceless, of course.

BusinessDay.co.nz