Insurance & Costs of having and raising a child

[d.o.g.]

whoa! prenatal checks a month is so much?! Now i wouldnt even dare to dream of starting a family!

Compared to the total cost of parenting, the prenatal expenses are a drop in the bucket.

Remember that you have to pay until the day your child draws his/her first paycheck. That is typically age 20 for children graduating from polytechnics, later if they go to university. So pregnancy is only 9 months out of the 20+ years of financial liability.

I estimated the numbers before on the old Wallstraits forum. Let's try again:

0-3 years:
$200/mth food
$50/mth clothes
$50/mth toys & entertainment
$50/mth miscellaneous
Total: $350/mth * 12 mths * 3 years = $12,600

4-6 years:
$200/mth food
$200/mth nursery/kindergarten
$50/mth clothes
$50/mth toys & entertainment
$50/mth miscellaneous
Total: $550/mth * 12 mths * 3 years = $19,800

7-12 years:
$200/mth food
$200/mth school fees & pocket money
$100/mth transport
$50/mth clothes
$50/mth toys & entertainment
$50/mth miscellaneous
Total: $650/mth * 12 mths * 6 years = $46,800

13-16 years:
$300/mth food
$300/mth school fees & pocket money
$100/mth transport
$50/mth clothes
$50/mth toys & entertainment
$50/mth miscellaneous
Total: $850/mth * 12 mths * 3 years = $30,600

17-19 years:
$300/mth food
$800/mth school fees
$400/mth pocket money
$150/mth transport
$100/mth miscellaneous
Total: $1,750/mth * 12 mths * 3 years = $63,000

I think most people would agree that these estimates are on the low side as it assumes that no money is spent in pregnancy, there is no maid and that the child attends a local polytechnic. There is also no budget for enrichment classes like ballet or music, nor for after-school tuition. And yet it totals about $170k. Over 20 years most people would have no problem earning this money. Saving $170k for such expenses is a different matter.

Those who want to have a maid to help bring up the child during age 0-3 have to budget an extra $800-$1,000 per month as they have to pay for the maid levy, the maid's wages and also the maid's food. That's about $10k per year or $30k total for the first 3 years.

Tuition during the school-going years can easily total $200/mth during primary school and $400/mth during secondary school. That comes to:

$200/mth * 12 mths * 6 years + $400/mth * 12 mths * 4 years = $23,600

Those who wish to send the child to an overseas university will have to budget an extra $200,000 or so. The more expensive universities will cost about $300,000 or more. And that is in today's dollars. In 20 years' time the cost could easily be 50% more.

So those who wish to have a maid to help out during age 0-3, provide tuition during age 7-16 and send the child to a top overseas university should expect to put aside a total of $170k + $30k + $24k + $300k = $524k in today's dollars. By the time the child actually goes to university the fees may have gone up 50% and it may actually be $674k in future dollars.

This is not to say that people shouldn't have children, just that they should be aware of what the children will cost to bring up, and they might want to consider scaling down what they intend to provide for each child.

Have fun saving!