The True Cost of Raising Kids in NZ

How much does it cost to raise children in New Zealand?

As anyone with kids will tell you, raising children can be expensive. But how expensive, exactly, and what does the research say about the impact on long-term wealth?

Why People Choose to Have Children

Nobody has kids to turn a profit. We start families for a whole range of reasons, including:

• Wanting to create a family with your significant other
• Carrying on family values and traditions
• Finding meaning and purpose in life
• Social pressure and expectations, which often come from family members
• It's human nature

New Zealand Children Aren't Cheap

There are many reasons to start a family, but we might not always consider the monetary costs. Based on various New Zealand household spending studies, raising a child in New Zealand typically costs somewhere between $250,000 and $350,000 from birth to age 18, or roughly $300 to $400 per week depending on the child's age and whether childcare is required.

The costs vary considerably by stage. In the first year, the biggest variable is childcare: parents returning to work can expect to pay $250 to $400 or more per week, with Auckland and Wellington sitting at the top of the range. Once children reach three, the government's 20 Hours ECE subsidy kicks in, reducing the weekly bill. By primary school age, the direct cost of a child may fall to somewhere between $8,000 and $16,000 per year, though private school fees or competitive sports can push it far higher.

Many of us will support our kids well beyond 18 as they venture into university, buy a car, or rely on help from 'The Bank of Mum and Dad' to get into their first home.

There are also costs we might not consider straight away. Owning or renting a bigger home is one. Another is the 'stay at home penalty': missing out on earning an income as a stay-at-home parent and also missing out on career progression, including employer KiwiSaver contributions.

One approach might be to earn more, progress in your career as soon as possible, or have kids later in life. However, the more money you have or earn, the more you typically spend on your kids. For example, as you earn more you might spend more on:

• Private schools (fees at top NZ schools can exceed $20,000 per year)
• Braces and orthodontic treatment
• Gifts and technology
• Costlier hobbies such as music lessons, skiing, or swimming squads
• Private health insurance
• Overseas holidays

But life isn't only about money, so does having kids make us happier?

Do Children Make Us Happy?

Most parents will tell you having kids makes them happier. However, research published in the American Journal of Sociology paints a more complicated picture. In a study of 22 developed countries, the researchers found parents in countries with strong family-friendly policies, such as paid parental leave, affordable childcare, and flexible work arrangements, were as happy as, or happier than, people without children. In countries with weaker support, including New Zealand and the United States, the opposite was true.

New Zealand sat in the middle of the countries where parents reported lower wellbeing than non-parents. The US had the largest gap. Countries such as Portugal, Sweden, Norway, and Finland showed a positive gap, meaning parents were happier than those without kids.

The differences appear to come down to whether a nation has social policies helping parents balance paid work with the demands of child-rearing. Countries where parents are happier tend to have generous paid parental leave, subsidised childcare, government-protected paid leave, and greater work schedule flexibility.

New Zealand has its own policies helping offset the costs, and they have improved in recent years:

• Paid parental leave: 26 weeks at up to $788.66 per week (as at 1 July 2025), paid by Inland Revenue
• Working for Families tax credits, including the Best Start payment of up to $69 per week in a child's first year
• FamilyBoost: a 25% rebate on early childhood education fees, worth up to $975 per year per child, for households earning under $180,000
• 20 Hours ECE subsidy for children aged three to five
• Free GP visits and prescriptions for all children under 14
• A childcare subsidy from Work and Income for eligible lower-income families

Although these policies provide meaningful relief, they may not fully offset the pressures today's young parents face: high rent, elevated grocery costs, and the financial weight of trying to save a deposit for a first home.

Learn more:

• Why Is Everything Getting More Expensive?
• How to Help Your Children Buy a Home
• Making It Work When Adult Children Move Back Home

The Effect of Kids on Long-Term Wealth

If the total bill lands somewhere between $250,000 and $350,000 per child, a couple with two children could be looking at $500,000 to $700,000. So, should prospective parents be worried about the long-term impact on their finances?

Not necessarily. Research from Curtin University in Australia, published in the Economic Record, found children have a surprisingly small impact on wealth accumulation relative to the costs implied by expenditure-based estimates. Using household panel data from the HILDA survey, the researchers estimated each dependent child reduced a couple's wealth by roughly AU$2,000 per year. Compared to the annual cost of a child, this is relatively inconsequential.

The finding has been replicated in several studies. While it is difficult to pin down exactly why the gap between cost and wealth impact is so large, the researchers noted children often have positive effects on the income side of the equation, particularly through welfare payments and tax concessions. One could also argue parents are more motivated to increase their income to cover the added expense, partly offsetting the effect on net wealth.

What Should Parents Do?

The numbers can look daunting on paper, but the research suggests having children does not derail long-term wealth as severely as the raw cost figures imply. What matters more is how you plan around it.

A few practical steps for current and expecting parents:

• Check your eligibility for Working for Families, Best Start, FamilyBoost, and the childcare subsidy. Many families leave money on the table.
• Review your insurance. Income protection and life insurance become far more important once someone depends on your earnings.
• Where cash flow allows, keep contributing to your KiwiSaver investment, even at a reduced rate during parental leave. Employer contributions stop during leave, so voluntary top-ups help maintain momentum.
• Build or revisit your financial plan, including modelling different childcare, income, and KiwiSaver scenarios as your family grows. The costs of raising children shift through distinct stages (ECE, primary school, secondary school, tertiary, first home), and a plan built around those stages will always outperform one built around a single number.

The Bottom Line: The Cost of Children In New Zealand

Kids are expensive, there is no avoiding it. But the evidence suggests they have a smaller impact on long-term wealth than the headline figures imply, and New Zealand's growing suite of family support policies can take real pressure off the budget. The key is planning early, knowing what you are entitled to, and making sure your broader finances are set up to absorb the extra load.

If you would like to talk through how starting or growing a family fits into your wider financial picture, get in touch with our team.