When news broke a couple of years back in HK that a famous sportswoman Lee San San said that to raise a kid in HK would cost in the vicinity of HK$3mn, all hell broke lose. I tend to agree with her. Most parents know that its not cheap to raise a kid in the city, but no one actually sat down to tabulate the the actual cost. Now a new study in the US came out with equally similar conclusions, that it will cost US$291,570 for a middle income family to raise a kid. That's close to HK$2.3mn, so Lee San San was not that far off. Get this, it DOES NOT INCLUDE the cost of childbirth or college.
If you were to revert that to Singapore dollars, that would be S$417,994 ... which I am pretty sure is more than 90% of all CPF account holders have in their CPF at 55. You can still get by if higher education is largely subsidised, I guess. Imagine if your kid is neither brilliant enough to get a scholarship or a partial scholarship and you are not poor enough to qualify for special loans - that's Die Hard Part 4 ... Die Standing.
The amounts are a bit off the center when you talk about Malaysia as we have a different purchasing power model. I think you can even convert dollar for dollar, USD into ringgit, it would be closer to the mark, i.e. US$291,000 = RM291,000 (I am refering to a middle class family raising a kid in the city in Malaysia).
I have a married couple who are close friends and they have 4 kids, all smart buggers and will be college bound, but their joint household income is comfy but not excessively high at RM15,000 a month. They bought a new house two years back for RM650,000 and spent RM150,000 on renovation, and end up owing the bank RM400,000 still. I said to them, you know you are paying down the house to fund your children's education, and you better hope none of them turn out to be bastards as you probably need them to feed you in your later years. Its a stressful situation, can you afford to take the whole family overseas for holidays... probably not, gawd forbid if one of them should lose their job!!! Is that a dream or a nightmare in the making?
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WASHINGTON - A MIDDLE-INCOME family can expect to spend US$291,570 (S$417,994) including inflation to raise a child born in 2008 to adulthood, the government estimated on Tuesday, up slightly from the estimate made a year ago.
The estimate covers food, shelter and other necessities for a child to age 18, said the annual report by the Agriculture Department.
The figure does not include the cost of childbirth or college.
Housing accounts for one-third of expenditures on children. Food accounts for 16 per cent, the same as child care and education, said the Expenditures on Children by Families report. Last year, the USDA estimated it would cost US$269,040 to raise a child born in 2007 to age 18, including inflation. The USDA has made the estimates since 1960, when the estimated cost was US$25,300.
The department said it planned to have an updated 'Cost of Raising a Child Calculator' on the Internet soon. Annual spending for child-rearing ranges from US$11,610 to US$13,480 for a middle-income, two-parent family, the USDA said. Families with lower incomes will spend less and families with higher incomes spend more.
Expenses are highest in cities in the US north-east, followed by urban areas of the West and Mid-west. They are lowest in rural America and cities in the South. -- REUTERSp/s photos: Son Dam Bi
6 comments:
What happens if all 4 kids wanna study medicine overseas? Better start robbing banks
Dali, that's called love - giving sacrificially regardless of the outcome and hoping for the best.
http://daddyparentingtips.blogspot.com/2009/07/tip-173-giving-as-father-would.html
I think saving early helps - it seems extreme but buying a property if you have comfortable savings everytime you have 1 child.
http://daddyparentingtips.blogspot.com/2008/04/tip-30-buying-housesproperties.html
think how many percents of this US$291,570 goes into each category
it no easy to raise kid but also not terrible as you think, everythings comes and goes as it should just make sure you do what you think is right, control the balance point. It matter how you manage and not it control you, for example if your income let say 1000 per months one year would be 1000 X 12 then 12,000.00 but you put 20% as investment, 10% for insurance, 10% for child educated, the balance is for dialy expenses. if you have one kid are 1,200 per year X 18 years then 216,000 are for you only child, but if you have 5 child (216,000 / 5 child) so each child still can go to U.
good post.. 2 kids.. so gotta set aside 2million for the kids.. better start a personal hedge fund now!!
anyways.. die standing should be die hard 5.. (willis's last one was die hard 4.. live free or die hard.. just fyi)
My love for my 2 boys are unconditional. I will give them the best in education and living standards to the my best of ability - whether or not they grow up to be unfilial useless bastards in the future is not even a consideration.
I am earning around 15K per month too but I can't afford to buy a 400K house, let alone a 650K house plus 150K for renovation. Take into consideration that I am debt free cos I am staying with my parents, I drive a 7 y.o car which has been fully paid up years ago and most of the holidays I have taken these past 10 years or so, are local no-frills ones.
15K after subtracting income tax, EPF, insurance, household bills, utilities and 2.5K per month for private school, leaves me nothing much. I wonder why there are so many luxury cars like BMWs and Mercs on the road. Are there so many people getting paid so much? I am running my own small business and I have no idea what is the salary scale on the market now. Any benchmark?
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