Parenting costs once ended when a child turned 18. Not any more

Before you become one yourself, anyone who is already a parent loves to say how much it changes you. The blink-and-you’ll-miss-it moments, the conversations with curious minds, the milestones of first steps and first words.

But there’s another way parenthood is changing Australians, and we need to talk about it.

The cost of raising kids is no longer shrinking as children become adults, but is dragging on for up to an extra decade.Credit: Dionne Gain

It used to be that once you’d gotten past the childcare phase, the primary and high school phase, the social activities and sports, driving lessons, school camps, orthodontist visits and clothing and feeding constantly growing bodies, the expensive part of parenting was almost done.

University of New South Wales data, in fact, shows this phase – raising a child from infancy to 17 – is likely to set you back between $100,000 and $300,000.

Recently, however, parenting has become increasingly expensive due to a medley of contributing factors which include but are not limited to: higher house prices, higher school fees, stagnant wage growth, declining full-time employment rates, the cost-of-living crisis and the lingering economic effects of the COVID-19 pandemic.

In fact, the cost is no longer shrinking when children turn 18. Instead, the parenting bill is dragging on and on and on, for upwards of an additional decade.

When families can support their children and want to, that’s wonderful. But it shouldn’t have to come at the expense of parents.

The first and most obvious cost arises from kids staying at home for longer. According to the annual 2024 Household, Income and Labour Dynamics in Australia survey, 54 per cent of males and 47 per cent of females aged between 18 and 29 still live at home with their parents.

For comparison, the HILDA survey of 2001 found the number of males aged 18 to 29 living at home was 47 per cent, while for women it was 36 per cent. This marks what HILDA’s co-director Professor Roger Wilkins calls a “seismic shift” in the way we’re living.

Overlooking the hell of rental demand, Domain’s 2025 First Home Buyer Report indicates the cost of an entry-level house in Melbourne is now $670,000, while in Sydney it costs just shy of $1 million, or $990,000. Nothing quite says “you’ll find me in my childhood bedroom” like such eye-watering figures.

Increasingly, this coincides with a rise in higher education rates. Compared with 2001, when about 16 per cent of Australians held a university degree, in 2023, federal education data shows 53 per cent of all year 12 students make their way to university – years that will set undergraduates back an average of $30,000 to $50,000.

Then there’s the decline in full-time employment opportunities for young people due to such things as an increasingly casualised workforce and underemployment. Young people comprised 14 per cent of the Australian workforce but accounted for 55 per cent of layoffs in 2021.

And what of wage stagnation? Per Capita research found that due to stagnation the average annual salary was $12,000 less than it should be between 2012 and 2022.

While the impacts of these factors on young people are disproportionately negative, we can’t ignore the added financial pressure placed on their parents. Staying at home makes financial sense for the young, but parents then face up to an extra decade – or more – of higher utility costs, grocery bills and other incidental expenses.

Yes, the so-called “bank of mum and dad” with its home deposit offering is the way we most often see parental help play out, but smaller aid can involve not asking kids to pay board or contribute to household costs while they remain at home.

Rising house prices are prompting more young adults to stay living at home.Credit: Peter Rae

Maybe they use their parents’ car instead of buying one for themselves; perhaps they stay on the family health insurance policy – while fees have never been higher, more children are remaining on their parents’ policies for longer.

In 2022, the government raised the age of dependency to 31 years in a bid to help young people continue to have better healthcare access, and in the grand scheme of things, this might not seem like much money to a parent. But with policies for a family of four costing up to $10,000 a year, the additional 13 years of payment (between 18 and 31) add up over time.

Research in 2022 from the universities of Melbourne and Newcastle found 20.8 per cent of Australians aged 18 to 33 received financial support from their family by way of direct financial support, repayable loans or a combination of the two.

It is amazing that one in five parents can offer this kind of support, that one in five children know they can turn to their parents for such support, but it’s not a viable long-term solution to such problems.

As is the way with parenting, our children’s problems are ours, and the pressure to help in big and small ways has never been greater. Yet for so many families, this is not an option.

Often people have to move away from home for work or study. Then there are the families who have complicated relationships, where living together and being financially entwined is not safe. There’s also a huge number of people who would no doubt love to help their children but can’t afford to.

In instances where families can support their children and want to, wonderful! But it shouldn’t come at the expense of older Australians being substantially burdened themselves and dragging out the extreme cost of parenting in ways many never planned for in the first place.

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

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

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