Most studies of children’s development and parents’ wellbeing have not dealt effectively with the complexity of multiple disadvantage. Traditional approaches have typically used a limited set of outcomes and predictors. Even studies utilizing multiple risk factors have often treated these as confounders, adjusting for their influence, while concentrating on a primary association of interest. Such strategies do not illuminate the real world essence of disadvantage, i.e. that adversities co-occur more than expected by chance and that multiple disadvantage is common. The main aim of the present paper is to address this neglected topic and develop summary measures of adversity using the 2004–2005 data from Wave 1 of the Longitudinal Study of Australian Children. Information was obtained from families of 5,107 babies (0–1 years) and families of 4,983 children (4–5 years). The prevalence of multiple disadvantage among families with young children and the degree to which summary adversity measures are associated with each other and with family and child outcomes is then estimated. Using factor analysis, 12 lower-order constructs and two higher-order components of adversity were developed, labelled (1) material and (2) psychosocial adversity. Findings show that the two component scores were more strongly associated with outcomes than were the more specific construct scores and that psychosocial adversity was somewhat more relevant to family wellbeing and child development than material adversity.