Seventy-five percent of Aussie parents say that having children is more expensive than they thought it would be, according to a new survey carried out by the Credit Union Association (CUA).
CUA now estimates the cost of a child to be as high as $8,000 just for the first year of their life.
Thirty-seven percent of respondents said that they had no idea what the cost of raising children would be, with a further third revealing that while they had made a guess at pricing, it had been exceeded.
Most underestimated how much generic baby items such as formula, nappies, childcare and car seats would cost, but many had saved in anticipation of
Home ownership was seen by around half of parents as an essential part of bringing a new child into the world. A full third said that owning a home was an important financial goal for them before they decided to start their family.
Home ownership also presented significant stresses for new parents, with 20% struggling to make home repayments as their income fell due to parental leave and other costs. Almost 60% said that they had not factored this into their home loan plans.
“We have a special program called Hatch for new parents,” said Megan Keleher, chief customer officer at CUA. “Under this plan, if new families would like to take their foot of the accelerator for a while, they can either a) have a three month pause with no repayments, or b) have a 50% reduction for six months, or c) move to a 12 month interest-only plan.”
“We’ve thought long and hard about that connection between starting a family and owning a home and we would like to think we have something for all or customers,” said Keleher.
“Customer-owned banks are usually more customer centric and we would like to think that when it comes to understanding the people behind the product, we are at the forefront of those willing to help. It’s useful for our customer too that our products are simple and easy to understand.”