“I calculated my kids’ total costs for 12 years of schooling. The amount shocked me.”

It will come as no surprise when I tell you that kids are expensive. With the arrival of every cute little bundle comes years of paying for daycare/kinder/school fees, extracurricular activities, connecting hotel rooms and a gazillion items that go walkabout (I’m looking at you water bottles, lunchboxes, shoes, clothes and sporting equipment).

I’ve always been pretty bad with money – I’m good at spending it, not so good at saving it. So my 2018 resolution was to improve how I manage my hard earned. Yes, I have finally started listening to my accountant husband and I’m becoming more money savvy to prepare for my kids’ future.

The main thing I’ve learned – planning ahead saves a lot of stress down the track. Here are three important learnings:

1. Prepare for the unexpected.

While some surprises (like my second pregnancy) are welcome and exciting, others aren’t. Your child may need an expensive medical procedure or childcare costs might spike along with your utility bills. Be prepared for the unexpected by putting a percentage of your pay into an emergency fund. Ideally you should have enough in your emergency account to cover three to six months of expenses and the balance shouldn’t be touched for any recreational costs like Paw Patrol Live tickets (whoops).

It’s also a good idea to take out income protection insurance so that you can keep afloat if you suddenly find yourself without a salary. While we’re on the topic, you also need to update your home and contents insurance because you never know when your delightful offspring will break something expensive. Yes, I’m writing from experience. While throwing an epic tantrum, my three-year-old bent back the setting on my engagement ring and the diamond fell out. As I was about to speed dial our insurer, we found the diamond in the adjacent car’s tyre tread. If my eyesight was bad and we didn’t have insurance, it would’ve been hello cubic zirconia.

2. Plan ahead for the cost of education.

The cost of education has skyrocketed over the last decade. I used education fund provider ASG’s online tool to calculate the cost of primary and secondary education for my two kids and it totalled more than $670,000! That’s going to a government primary school and a private high school. If your child was born this year and you want to send them to a faith-based secondary school, be prepared to pay over $14,000 per year with private secondary schools costing over $25,000.

Along with the fees, you’ll have to cough up for uniforms, school camps, computers, tutors, extracurricular activities and sports/music equipment. Before you start Ebaying your pet and booking your husband in for a vasectomy, there is a way to numb the financial pain. It’s all about being proactive and planning early. If organising your own savings plan seems daunting, look at an education fund like the one offered by ASG.

The Pathway Education Fund works in a similar way to a superannuation fund, but instead of saving for retirement, you’re saving for your kid’s education. Your regular contributions are invested but you can access the funds at any time to cover your child’s education costs and take advantage of potential tax savings. So many of my friends swear by education funds, saying they’ve taken the stress out of planning for their kid’s future. That’s why my husband and I are signing up with ASG now, before the kids start prep.

3. Find your inner frugal.

Over the years I’ve bought a LOT of things my family doesn’t need. Designer kids’ clothes? They got covered in bolognese sauce. The $2000 pram? It became a receptacle for spills and spew. Kids really only need a few essentials along with lots of love.

Scrap the excess and focus on investing your money in the things that matter, like wonderful experiences. Of course I’m not saying you should never spoil your kids because where’s the fun in that? I’m just saying reserve the spoils for special occasions.

It’s also important to teach your kids the value of money from an early age. My five-year-old still thinks there is a money tree growing in our backyard when I can’t even get the lime tree to fruit. He recently came to me with his hand out and said, “Mum, I need dollars.” When I asked why, he informed me that he is planning a trip to Bali with his kinder friends so they can fly on an aeroplane and go to a waterpark. I told him if he cleaned up his toys, he could earn $2 towards his trip. His trip has since been postponed until 2035 but at least he’s learning that the only way he’ll get cash from me is if he earns it.

When you look at what your kids will cost you, it’s easy to feel overwhelmed and totally out of your financial planning depth. Don’t stress. Stop tapping your card willy nilly and start planning early and you’ll save yourself a lot of sleepless nights down the track.

What's your best advice you've got for managing the costs of kids?