Thursday, 25 June 2020

How Much Does It Cost in Detail to Raise a Child in Singapore for Low, Middle and High Income Households

Singapore is one of the most expensive countries in the world to raise a child. Even my foreign expat friends who stay here in Singapore complain about the high living costs. I have several children myself, aside from those I supported in overseas.

Recently I became curious on the cost of raising a child in Singapore, starting from the day of pregnancy until when the child finishes his or her Tertiary education. I conducted my research online and some mentioned SGD285K while others said 650 to 700K. I am not very convinced with the figures which I felt it is either too low or too high for middle income household. So I did my own detail calculations.

In the following, you can find tables showing detail figures of raising a child in Singapore in different stages. I have also provided comparison of costs for both the lower and higher cost range, as well as the expenses for general middle income Singaporean household. Lastly, I have also included actual or expected cost of raising my own child based on experiences.

SUMMARY OF EXPECTED EXPENSES


ASSUMPTIONS

Middle Income
  • This depicts the middle income Singaporeans of typically household income SGD 10 to 15K per month. 
  • Assume pregnancy and delivery in private hospital.
  • Buy reasonable quality products and eat decently with good food once awhile.
  • Employs foreign domestic worker or at least pay grandparent allowance to take care of child.
  • Spends average amount for enrichment and sports or personal developments.
  • Child attends junior college and local university.
  • Adequate health insurance coverage. 
Lower Range
  • Bare minimum expenses.
  • Very smooth pregnancy and delivery with no extra tests or treatments costs.
  • Does not employs foreign domestic worker and does not need to pay grandparents to take care of child.
  • No or minimum enrichment and development classes.
  • Very little entertainment and toys for kids. Minimum pocket money.
  • Includes lower end health insurance policy. 

Higher Range
  • Includes  local polytechnic school fees and overseas university tuition fees and expenses for four years costing approximately SGD 200K.
  • Delivery in private hospital and single ward with post-delivery treatments.
  • Spent significantly more on enrichment and sports or personal developments.
  • Higher food, entertainment and product expenses with more generous child allowance.
  • Good health insurance coverage.

Rolf
  • Heavy expenses spent on foreign domestic worker and grandparent assume amounting to more than SGD 2K per month, excluding food and lodging expenses. However, expenses are shared among several kids, hence the  average cost is lower as tabulated. 
  • Spent significantly more on enrichment and sports developments. Especially in sports development amounting to SGD 120K per child in his/her lifetime, because I believe that that sports not only provide health benefit, but also mental and social benefits. 
  • Spends on quality products, but costs were shared among siblings, lowering average cost per child. For e.g. the same stroller can be used all the siblings.
  • If I only have one child, the total expenses per child then can be at least SGD 700K because the expenses on care-giver foreign domestic helper and grandparent will not be able to spread among different children.

DETAIL COSTS

Also refer to my earlier article:






 

CONCLUSION

So it  generally takes between 300K to a Million SGD to raise a child in Singapore. The average cost to raise a child with a decent growing up environment in Singapore is probably in the range of SGD 500 to 600K.

This means that if you have three or four children, you will have to prepare at least SGD 2 to 3 Million (including inflation) to raise them until they finished tertiary studies. Of course, the university school fees which form the big bulk of the costs can be loaned ninety-percent and be paid by the child themselves. But do bear in mind of the huge monthly repayment and interest burdens on the child straight after graduation.

In a highly competitive society like Singapore, which I personally loathes, enrichment and personal development lessons are almost becoming a norm. Those who cannot afford will inevitably feel the peer pressure of their child is lacking behind his or her peers. This is unless the parents themselves are either very good in parenting their own child or have the extra time and patience to teach. Not many in Singapore are in that situation, considering most parents have to work or perhaps not meant to be good a "teacher" especially with their own child.

If you are not a parent yourself yet, you may be of the opinion that extra classes are not important in order to save more money. That is easier said than done.  It is better that you are a parent yourself before you should pass on the judgement too early.

In general, for middle income household with reasonable expectation of raising your child, you will probably spend a lot of money during the child’s pre-school and primary school period. School fees in pre-school are more expensive and you are likely to spend a lot more on childcare, or foreign domestic helper or paying your grandparent to take care of the child. There will also always be ad-hoc expenses in schools.

During your child’s secondary school days onwards, you will also start to experience your child asking you for more than their pocket money on frequent basis. This is because the costs in restaurants, cafes, movies or other forms of entertainment with friends will only be increasing over time. Besides, you will also need to have your own family weekend outings or dinners where you will spend on your child expenses, equivalent to an adult cost from his or her secondary school days onwards. 

Furthermore, I know that most Singaporeans love going on tour every year. Imagine you have two children, and you go on an annual tour at least once, or at times twice annually, your expenses will simply balloon more than what I calculated earlier. FYI, last year I brought all my family including my helper to Australia together with my siblings’ families in order to fulfil my mum wish that all of us can be together. The total expenses for me is SGD 20K for a ten day trip, which is approximately SGD 3K per child. A check with two or three of my friends who toured in Australia or Japan, spend approximately the same amount of SGD 3K per child for a seven to ten days trip. 

Over time, university tuition fees will also increase with inflation. I expect every ten years, university fees to rise close to 50%. That is, it doubles every 20 years. Imagine you are a young parent now, do not be surprised that by the time your child attends university, the local subsidised tuition fees will be already close to SGD 100K for a four year course.

In a nutshell, it is not cheap to raise a child in Singapore, let alone two or more. In general,  if you are single or do not have kids, it is so much easier talking about a large investment portfolio or how much you are going to save per month, or how early you are going to be FIRE i.e. Financial Independent, Retire Early.

It is always a trade-off nonetheless. This is because for all the money you save for yourself or your wife for not having a child, you are definitely going to miss out on the love and the joy of seeing your child grow up day by day.













6 comments:

  1. love your concluding statement, bro.

    expenses are startling though. haha.

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    Replies
    1. Thanks bro. Yes, with inflation it is even more expensive. That is the cost of advancement in almost every city in the world. With advancement come higher cost of living and greater disparity between the "haves" and the "have not"

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  2. Hi Rolf,

    I only have 1 child. It is quite worrying. We didn't aggressively try for another, but we are not against the idea too.

    Having done the caregiving part for both my parents, I am glad I have 2 siblings to share the load of caregiving. Caregiving in the final journey required more than a maid or a respite nurse. Respite nurse are very expensive, and u need them nonetheless. I remember as we take our shifts, we will each spend a night without sleep, the maid and respite nurse than take the rest of the sleepless nights.

    It is difficult for both the sick and caregiver and imagine if u are alone in all these. Even if financially sound, it is quite scary, I remember worrying about money and my brother is telling me not to worry. It is rather gloomy and depressing going home to a dementia father and trying to reduce his discomfort as he body fails and watch home.suffer helplessly

    I think I am a rather stingy father. My wife after hearing suggestions from relatives have often ask me should we get this tuition or let him go to enrichment, I always said no, unless u insist. Personally, I think he is coping rather fine. Definitely not topping the class or cohort, but I am.dine with being average.

    The 2 enrichments that I agree is swimming and badminton to keep him healthy as he is getting too fat. With Covid, he can't go for those lessons anymore. Sigh...

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    Replies
    1. Good for all kids to learn swimming as young as possible. It is for survival too. Once we fall into deep water and if we can't float ourselves; certainly cant survive before help reach us.

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    2. Hi SI,
      Thanks for dropping by. When you have parents and child to take care, it is not easy. Expenses will be high indefinitely, but this type of money commitment is a form of expressing our love.

      About the enrichment, I am the same for as you. My wife wanted to sign up this and that, I cancel everything and only left with Chinese and Table tennis. Swimming is almost like a must, but once they are able to swim by themselves, I cancel the lesson. My children I think are average or below average in their studies. Definitely not elitist!

      As for Sports, I always tell her and make her remember the benefits:
      1) Health 2) Focus, Discipline & Perseverance 3) Friends and Fun


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    3. Hi CW,
      Yeah all my kids learn swimming when young. Haha, the older type of "swimming" in the society I am teaching them also. :-)

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