18 September 2023

It is a special feeling to welcome a new child or grandchild into the world and watch them grow. Sharing their joy as they reach new milestones is priceless.

Of course, there is a real cost – raising a child is getting even more expensive with the cost of living spiraling higher over the past few years. Estimates vary widely from the few studies completed but it is fair to say that over a child’s lifetime families can spend hundreds of thousands of dollars on living, medical and schooling expenses for their children.

Having a financial strategy in place to cover the costs and taking advantage of government support where available can make a big difference.

Taking care of the basics

The first step is to update your Will to nominate guardians for your children in case the worst happens. You may also consider life insurance and income protection to ensure your family is protected.

Next, a savings and investment plan will help you navigate the years ahead with more certainty. Adding small amounts of money regularly to an account for education and other expenses can help to ease financial stress. The Sorted savings calculator shows what can be achieved. You could consider fee-free high interest savings accounts or your mortgage offset account as a way to save cash for short-term needs.

Meanwhile, some longer-term investments such as shares, exchange traded funds or listed investment companies may provide financial support for later expenses. They can offer the possibility of capital growth and diversification for a relatively low cost.


Opening up a KiwiSaver account on behalf of your children is a great way to kick start savings of their own. The account could then be used as a tool to educate on money and the power of savings.

Keep in mind that any contributions to your kids accounts will not bring about the annual government contribution until they become a contributing member over the age of 18.

Government support

Take the time to discover the government payments and support available for families. For example, the Paid Parental Leave Scheme provides support for mothers or the primary carer for up to six months, starting from when parental leave is taken.

Then there is the Working for Families tax credits; a weekly, fortnightly or annual payment which is calculated based on total family income. Be aware that the calculation isn’t limited to taxable income and can include items such as attributable trustee income from being a settlor of a trust.

However, it is worth knowing that the Best Start credit is not income tested for the first year of each eligible child’s life. So it is worth a look even if the family income levels are above the thresholds for the other family tax credit types.

Grandparent gifting

Grandparents who are keen to help out their families financially can gift money to their children or grandchildren. There is no longer any gift duty in New Zealand, so there are no tax implications related to gifting from individual to individual. It may be more tax efficient to show any gift through a trust.

Speak with your Nexia advisor for more information or if you are interested in becoming a client, please get in touch.

Nexia New Zealand has a dedicated team of tax consultants in all three offices; Albany, Newmarket and Christchurch and look forward to sharing this expertise with you to improve your financial wellbeing.

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