Can you put a price on having kids? For many, the answer is yes

Irrespective of which particular style of rom-com appeals to you most, for a long time, the formula for societal cohesion was fairly generic: boy meets girl, they fall in love, face some minor hurdles, but ultimately realise by the end of the film they are destined to live happily ever after with a couple of kids and a home in the ’burbs.

While it may be the stuff of Hollywood dreams, this version of events hasn’t mirrored reality for quite a while now – especially when we reach the happily ever after portion of the story that involves the white picket fence and children.

Birth rates in Australia are declining, which, given the exorbitant cost of having children, should come as no surprise.Credit: Dionne Gain

Last week, data revealed the number of babies being born in Australia is yet again cause for concern, with Melbourne recording a decline in birthrates of 7.3 per cent between 2023 and 2019. In Sydney, the drop was even higher at 8.6 per cent, while Perth recorded a drop of 6 per cent, and Brisbane a drop of 4.3 per cent. Nationally, Canberra was the only city where birth rates held steady.

When applied to the number of children per person, the figures gave Melbourne women the dubious honour of being the least fertile in the country, with a rate of 1.44 babies per person. In Sydney, this increased slightly to 1.57, and in Brisbane, it went up to 1.61 babies per person.

While these figures are stark, the problem of why people are choosing to have fewer children isn’t new, and why this is so isn’t a great mystery, either.

Birthrates and economic downturns have always been linked, but somehow in more recent times, the financial hurdles for people wanting to have children have all managed to neatly align one after the other, starting from the time we finish uni up to the time we reach a fertility cliff.

For decades, researchers have seen this problem of people having fewer children and have been trying to find a way to reverse course.

Say you’re partway through your version of a Nancy Meyers love story, and you decide it’s time to start a family. More often than not, couples want to be on the property ladder before having a baby.

But with the median house price costing over $1 million in Sydney, Melbourne and Canberra, and over $900,000 in Brisbane and Adelaide, saving up a deposit is likely to set your plans back by quite a few years.

It makes sense, then, that we’re seeing the age of parents rise, with the average first-time mother now aged 29.7 and the highest proportion of Australian mothers aged between 30 and 34 years old.

There’s also a high chance that before purchasing a home, you had a higher education debt – the costs of which have also been dramatically increasing recently. So you had to spend a good few years paying that off before you could allocate those funds to other things.

When education and housing debts are put aside and you get down to the business of birth, the numbers quickly add up. If you’re among the 75 per cent of Australians who give birth in the public hospital system, your pregnancy and birth itself is unlikely to cost much (the prenatal vitamins, pregnancy wardrobe, pregnancy-friendly exercise classes, physio sessions, food cravings and Gaviscon will set you back, though).

If you’re in the 25 per cent who go private, expect the out-of-pocket cost to be up to or over $10,000 before you even get home.

But if boy met girl later in life, or girl never met the right boy, or girl has pre-existing health conditions that make natural conception difficult, or girl met girl, there’s then the added cost of IVF.

And while portions of IVF are covered for some via Medicare, the stories of people spending tens of thousands of dollars entirely out of pocket are all too plentiful. If you’re in the boy meets boy cohort, or are among the boy meets girl, but girl is unable to carry cohort, then there’s surrogacy.

Though surrogates cannot financially benefit from their services in Australia, the associated medical and legal costs, according to Surrogacy Australia, range from between $35,000 - $86,000 per child.

Then comes perhaps the greatest mind game of the entire experience: parental leave, daycare, and government rebates. Trying to navigate this process will offer you years of fun – and by fun, I mean the kind of number-crunching hell that’s enough to make even a former financial advisor like myself throw my hands up in the air.

And let’s not forget the long-term cost. According to data from the University of New South Wales, the average Australian household will spend between $100,000 and $300,000 for each child they raise to the age of 17. This roughly translates to the more digestible figure that is handy when doing the monthly household budget of around $700 per month per child.

As I said, these issues are not new. For decades, researchers have seen this problem of people having fewer children for reasons that include financial factors coming, and have been trying to find a way to reverse course.

Interestingly, far from one-off sugar hits like the baby bonus or ill-conceived slogans like “one for mum, one for dad and one for Australia”, would-be parents have previously been offered here, a small Italian city appears to have found the winning solution to be – wait for it – long-term structural support.

In Bolzano, parents receive a payment of 200 euros per child a month until the child turns three and have access to discounts on groceries, healthcare, transport, energy bills, and baby products.

Childcare is subsidised and affordable, rent-controlled housing is widely available, and fathers can easily access paternity care. All of these policies, economists note, help free up women to return to work, which, in turn, helps the economy.

As one expert told the New York Times recently, “The difference is that it has a constant investment over the years, unlike most national policies that are one-offs. Nobody plans to have children based on one-off policies.” In other words, they’ve made having children not something surrounded by financial uncertainty and fear, but something that’s entirely manageable.

As a parent, it feels impossible for me to put a price on the sheer elation that comes from holding your baby in your arms for the first time or seeing them take their first steps.

But many people can, and are finding the price is one they are unwilling to pay. Without long-term change, far from being a timeless rom-com, this scenario has all the hallmarks of becoming a horror show.

Victoria Devine is an award-winning retired financial adviser, best-selling author and host of Australia’s No.1 finance podcast, She’s on the Money. Victoria is also the founder and director of Zella Money.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.

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