Exposed: Our 2021 Living Expenses as a Family of 4 in Sydney!

2021 annual household spending of a family of four on the way to FIRE in Sydney, Australia.

It’s that time of the year again: Here is our 2021 spending report. A quick warning – our living expenses now that we are a family of four have gone through the roof. You might be a little shocked by how much our lifestyle here in Sydney is costing us each month. But I can assure you – we have not blown our budget and are not worried about our current cost of living. Read on to find out why.

2021 was a big year for our family – and that includes our cost of living. We completed our first full year of Early Semi-Retirement just as Baby Flamingo #2 turned 1. It was also our first full year as a family of four and it wasn’t a cheap year.

While we don’t usually share our numbers (as explained here) we make an exception when it comes to our family spending. I hope that our annual expense breakdowns are helpful to other families with young kids or readers who are planning to become parents soon. I have also written a very detailed post about the cost of having a baby in Australia recently. As you’ll see from our spending below, a lot of the cost of children is hidden – like in the higher rent for a bigger apartment and higher food spending.

Notes and Context

For some context (in case you are not a regular reader of the blog): We are a semi-retired couple and live in Sydney with our kids (two under three!). You can read all about our strategy here. Our kids go to childcare three days per week (Baby Flamingo #2 started in July). We are not super frugal but also don’t like to waste money on things that don’t add value to our lives. We spend a lot of money on things that bring us joy. Quality is important to us and we shop local where possible. We have a (flexible) family budget and track our expenses monthly.

A few notes:

  • Rent: We rent an apartment in one of the most expensive (and nicest!) suburbs of Sydney. The cost might seem a little outrageous (for a FIRE blog anyway), but we get a lot of value out of our location, so we are happy to pay for it at the moment.
  • Groceries / Supermarket: This category includes all of our supermarket spending: groceries, household products, some personal care items, baby stuff (nappies, formula, wipes, etc). We order online (Woolworths) a lot and do our top-up shops at Coles. Lately we have been very disappointed with Aldi’s quality lately, so we hardly ever go there anymore. We eat meat and fish about three times per week and buy organic beef and eggs and free-range chicken. On the other four days we have vegetarian/vegan meals.
  • Eating out: We often buy breakfast when we are out with the kids and also get takeout a couple of times per week. We could probably reduce our spending in this category quite a bit but with no real holidays this year we have enjoyed treating ourselves a little.
  • Transport, mobile phones, private health insurance: These are subsidised by our employers which is great, so the cost is probably lower than you’d expect.
  • Taxes, donations, etc.: Investment-related costs, charitable donations, taxes, etc. are not included in this breakdown.

Our 2021 Cost of Living Breakdown

Category 2021 spending Comments
Rent $45,624.96
Groceries / Supermarket $13,826.59see note above
Household goods $4,635.20 We bought some new furniture and appliances.
Personal care $519.69
Utilities (electricity) $1,731.25
Insurance $2,021.20 Renters insurance, salary continuance, liability, etc. 
Mobile phone $1,505.93
Home internet $240.44 We were using mobile broadband until recently and only got an NBN plan a couple of months ago.
Medical expenses $3,511.80
Transport $1,963.30
Entertaining visitors $595.82Extra costs when we have family or friends visiting (eating out, excursions, etc.) 
Kids – equipment, medical expenses, clothes, toys, etc. $2,835.99
Childcare $15,866.54
Eating out $6,525.74
Alcohol $719.30
Netflix, Spotify, etc. $359.96
Electronics / Software $406.72
Sports gear / Outdoor equipment etc. $334.32
Misc. discretionary spending and clothes $3,914.27Mr. and Mrs. F.’s “no questions asked” discretionary spending including clothes
Holidays $1,185.97 One short break at a nearby family resort.
Misc. expenses $1,557.97Tax return costs, repairs, gifts, etc.
Total $109,882.96
Total excl. rent $64,258.00
Total excl. rent and childcare $48,391.46

Comparison – Our Family’s 2021 vs Our 2020 Spending

Compared to 2020, our spending has increased significantly – from $83,506.56 to $109,882.96. The main reason is that we lived in our bigger, more expensive apartment for all of 2021. We moved here halfway through 2020 as our 1-bedroom had become way too small for a family of four.

Childcare is another big budget item for us these days. Two kids in childcare simply cost more than just one. This cost will go up again next year as Baby Flamingo #2 only started childcare in July (and only went one day per week for the first few months). I’m not even sure if I should include childcare in these annual breakdowns. Paying for childcare is simply the cost of both parents being able to work once you have kids and no family around.

Our supermarket spending has gone up a little bit compared to 2020. Again, that was expected when we added another baby to the mix. Our spending on electricity has gone up as well, partly because we were home so much last year and partly because prices have gone up. The same applies to our insurance policies. They are the same policies as in 2020 but the cost increased by about $500. I feel that inflation in some key areas has been driving the cost of living for families up a lot lately.

Our Top 3 Household Expenses vs The Rest

One thing that surprised me a little is that our top 3 expense items – rent, childcare and groceries – account for a whopping 68% of our total spending:

Our top 3 household expenses as a family of four in Sydney, Australia - rent, childcare and food.

This top 3 will change once we buy a house (and have lower monthly mortgage rates than our current rent) and when our kids start school.

Why I’m Not Concerned About Our High Family Spending

While I know our spending looks high I find our latest breakdown reassuring. The number I care about is our expenses excluding rent – $64,258. We want to buy a PPOR in the next few years and pay it off before we fully retire, so we won’t be paying over $45,000 per year in rent long-term. This expensive apartment we currently live in really is a bit of a luxury expense.

So excluding rent we spent $64,258.00 in 2021. If you deduct the childcare costs (which is just a temporary expense, obviously) from this number our actual spending was just $48,391.46 – way lower even than the ASFA Standard amount required for a comfortable retirement ($63,799 for a couple at the time of writing).

So even though we spent well over $100,000 last year, we are tracking along nicely and can continue enjoying our fabulous semi-retirement lifestyle while we look forward to hitting FIRE and the possibility of retiring in the next 10 or so years.

I’d love to hear your thoughts. Was our 2021 spending higher or lower than you expected? How has your family’s spending changed during the pandemic?

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17 thoughts on “Exposed: Our 2021 Living Expenses as a Family of 4 in Sydney!”

  1. We also have 2 young kids, 3 and almost 5. Our spending is a bit higher than yours, we rentvest in Maroubra. Can’t wait for our oldest to start school!

    • I love Maroubra, such a nice beach. Yes, not having to pay for childcare will definitely be a big relief I’d imagine – although that’s probably around the time the kids (and their activities etc.) start costing a little more. They are definitely not a cheap investment, but the one that brings us the most joy by far! 🙂

  2. Awesome to see real life expenses for a family in a similar situation.

    I feel your pain – childcare and rent in Sydney are daytime robbery! Once you knock these two categories out of the way your expenses will be pretty low.


  3. Thanks for sharing your numbers. Many families including ours (family of 3 with a 5-year-old), can relate to those numbers. Do you also track your savings rate?
    Care to share your house buying plan with your readers (especially tips and tricks)? We’re also saving to buy a house sometime in 2023 (probably not in Sydney due to cost, but in some regional areas such as South Australia or Regional Victoria).
    We just reach the flamigo FI few weeks ago so now we are saving for a deposit for our family home.

    • I haven’t tracked our savings reate since we semi-retired, it’s probably only around 5% or so, we are not saving to invest anymore and are more focused on working less etc.
      I don’t have any tips or tricks when it comes to buying a PPOR I’m afraid – we’ve only bought an IP so far.
      Congrats on reaching Flamingo FI! 🙂

  4. Thanks for sharing. Looking at your numbers your transport cost is very low. Just to confirm do you own a car? Also is this amount lower due to Covid and traveling less?

  5. Thank you for sharing, we are a family of 4 with older aged kids (9 and 10). Our expenses are very similar in comparison. Rentvesting beachside in Melbourne, so ~5k less, but our grocery bill costs more with older boys.

  6. So nice to see how another family just like ours spend and that being frugal is not the only way to fire. I would be curious to see how do you manage to spend only &13.8k on groceries per year? Our spending the equivalent is double at $28k per annum. Would be curious to see a typical weekly shop please . Perhaps we can learn how to manage this category better.
    Thanks for awesome content!

    • Being super frugal is definitely not the only way to FIRE. And what’s the point if your frugality makes you miserable anyway?
      I actually thought that our grocery spend was on the high side as it includes a lot of baby stuff like formula.
      We only buy meat/fish three times a week, so I guess that saves a bit of money. Do you eat a lot of meat? Also, does the 28k include eating out? How many mouths do you have to feed?
      I might post our weekly Woolies order sometime.


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