Your guide to financially planning for a family

When starting a family, most parents plan the nursery, book medical appointments, and organise parental leave. What often gets missed is the financial plan that supports the next 20-plus years of family life.

Family financial planning is the process of managing money so your family’s financial goals are achievable at every stage of life. It looks at income, expenses, savings, investments, insurance, tax, and retirement together. Starting early plays an important role in building long-term financial security, especially when raising children.

A young family often faces reduced income, higher costs, and new irregular expenses. Without a clear plan, financial stress can quickly follow. A structured approach helps families stay focused on their priorities and protect their financial wellbeing.

What family financial planning involves

Financial planning for family life is broader than budgeting for school fees or childcare. It covers your entire financial situation and adapts as your personal circumstances change.

A comprehensive family financial plan may include:

• Budgeting and managing money day to day.
• Short and long-term financial goals.
• Managing debt and loans.
• Building savings and emergency funds.
• Insurance such as life cover and income protection.
• Education planning for younger children.
• Investment objectives and investing strategies.
• Tax rules and available benefits.
• Retirement and superannuation planning.
• Estate planning to protect assets and your family’s future.

This approach helps families make informed decisions across every stage of life.

Cost of raising children in Australia and why it matters

Image: Freepik

Understanding the cost of raising a child in Australia helps families build realistic budgets and long-term plans.

According to SBS News research, families spend around 13% of their disposable income on their first child and an additional 10% on each child thereafter. For a working couple earning $130,000/year (after tax), that’s roughly $17,000 per year for the first child and $13,000 per year for each subsequent child. 

To raise the eldest child, the couple would spend about $300,000 over 18 years (based on the 2025 dollar value). Subsequent children would be about $230,000 each.

These costs vary based on:

• Income and household structure.
• Location and property choices.
• Education decisions and school fees.
• Food, transport, and lifestyle expenses.

For families, this information provides valuable context. Knowing the likely cost helps you build a realistic financial plan, manage risk, and align spending with your family’s future.

The key pillars of a family financial plan

Image: Freepik

Strong family financial outcomes come from addressing each area together, not in isolation.

Budgeting and cash flow management

Budgeting is the foundation of managing finances. It shows how income is used and where adjustments can create more value.

What to do next: 

• Track income and expenses for at least one month.
• Identify essential costs such as food, housing, and utilities.
• Plan for irregular expenses like school fees and medical costs.
• Allocate money toward savings and future goals.

Budgeting frameworks families use: 

• Percentage-based budgeting.
• Priority budgeting for essential spending.
• Zero-based budgeting, where every dollar has a purpose.

Example family budget: 

Category	Example allocation
Housing and property costs	30–35%
Food and essentials	15–20%
Child-related expenses	10–20%
Insurance and protection	5–10%
Savings and investment	10–15%

This is a guide only. Every family’s needs differ.

Debt and loan management

Debt management becomes more important when income changes or when one parent reduces work hours.

What to do next: 

• List all loans and debts.
• Prioritise high-interest debt.
• Review loan structures and repayment flexibility.
• Avoid unnecessary financial pressure.

Emergency funds and cash buffers

An emergency fund supports families during unexpected events such as illness, job loss, or urgent repairs. This is money kept in an accessible account to cover short-term shocks without relying on credit.

What to do next: 

• Aim for three to six months of essential expenses.
• Store funds in savings accounts or term deposits.
• Keep emergency money separate from everyday spending.

This buffer plays a critical role in protecting financial security.

Insurance and family protection

Insurance helps manage risk and protects your family’s lifestyle if something unexpected happens. This may include: 

• Life insurance.
• Income protection.
• Disability cover.
• Health and property insurance.

What to do next: 

• Review insurance needs as children arrive and grow.
• Ensure cover aligns with income, debt, and assets.
• Understand policy benefits and exclusions.

Education and long-term goals

Education costs are one part of broader family planning. Families may choose to save for:

• School fees.
• University or further education.
• Other long-term goals, such as travel or first homes.

What to do next: 

• Decide which goals matter most.
• Balance education savings with retirement.
• Use suitable financial products to support your plan.

Retirement planning for parents

Retirement planning should continue even while raising children. Many families focus so heavily on short-term costs that they delay retirement savings. Over time, this can impact wealth and future choices.

What to do next: 

• Continue superannuation contributions where possible.
• Review investment strategies as goals change.
• Align retirement planning with investment objectives.

Tax considerations and benefits

Tax is a key part of family financial planning. This may include:

• Understanding family tax benefits.
• Managing tax obligations and compliance.
• Structuring savings and investment efficiently.

What to do next: 

• Stay up to date with tax rules.
• Review entitlements when income changes.
• Seek professional advice when needed.

Estate planning for families

Estate planning helps protect your family if something happens to you. It may include:

• A valid will.
• Guardianship arrangements for children.
• Powers of attorney.
• Beneficiary nominations.

What to do next: 

• Review documents after major life events.
• Ensure wishes reflect current personal circumstances.
• Update plans as children age.

Regular reviews and ongoing support

A financial plan is not static. Life changes, income changes, and goals evolve.

What to do next:

• Review your plan annually.
• Update it after major events.
• Discuss changes with a financial adviser.

Take a positive approach to your family’s future

Family financial planning is not about having more money. It is about clarity, confidence, and control over your finances. 

With the right support, families can reduce financial stress and focus on what matters most. Speaking with a good financial adviser can help you decide the next steps. Professional advice tailored to your family, goals, and financial situation can support long-term financial wellbeing and help you achieve what matters most for your family’s future.

Contact the team at Elliot Watson Financial Planning and start creating a plan for your family’s future!

Disclaimer:

The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness regarding your objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.

The views expressed in this publication are solely those of the author; they are not reflective or indicative of the licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the author’s express written consent.

Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

Feature Image: Freepik