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Predictably, discretionary spending on things like eating out, alcohol and recreation reduces once a baby is in the picture - but that is more than offset by increased spending for the extra family member. Think nappies, food, new shoes (again and again) and child care.
Predictably, discretionary spending on things like eating out, alcohol and recreation reduces once a baby is in the picture - but that is more than offset by increased spending for the extra family member. Think nappies, food, new shoes (again and again) and child care. Thinkstock

The true cost of living: How much will you really need?

How much does it really cost your family to live? And what does the money actually get spent on?

If you're trying to balance a budget, or work out how much insurance your family would need without you, these figures may help you in your calculations.

Australian household burn up about $642 billion a year in general living expenses, including food, drink, shelter, transport, medical, recreation and fashion.

According to figures from the Australian Securities and Investments Commission, spending in those categories vary between the states - eg Queenslanders spend more on dental care than the rest of Australia, NSW folk love their movies, Canberra is mad on chocolate, and Tasmanians spend a relatively tiny amount on perfume.

The average household weekly spending is $1241 in Queensland and $1265 in NSW, compared with $1500 in the Northern Territory and a whopping $1536 in the ACT.

Kids are indeed expensive things to have around the home.

But those figures blur the reality that living costs vary at different stages of life.

The Australian Bureau of Statistics (using slightly older figures) breaks it down further, and proves that kids are indeed expensive things to have around the home.

From the birth of the first, the number of hours worked by one or both parents usually reduces, cutting income - while the weekly spending increases to a touch under $1500 a week.

Predictably, discretionary spending on things like eating out, alcohol and recreation reduces once a baby is in the picture - but that is more than offset by increased spending for the extra family member. Think nappies, food, new shoes (again and again) and child care.

With the eldest child between 5 and 14, the average weekly spend passes $1600 - not surprisingly, spending on food and recreation is now higher.

ASIC figures say the amount then continues to grow with the children, so a couple with an eldest child between 14 and 24 is spending $1900 a week.

When the children are no longer dependent, the couple's average spend drops back to about $1500 a week - with more spent on alcohol, recreation and transport, according to the ABS.

With couples 65 and over, the spending falls dramatically (and necessarily, as income stops or drops) to about $800 a week. Medical and health expenses naturally increase for this age group.

Living costs for individual families will vary of course, depending on circumstances, lifestyles and expectations. And the picture for single-parent families is different again, with the lower average weekly net income of $847 dramatically reducing spending power.

Online tools and apps can help draw a more accurate picture of your family's spending needs. Try these: