Adulting 101: The cost of raising children has always put me off having one. Is it really that expensive?

Adulthood is an invigorating stage of life as young people join the workforce, take on more responsibilities and set their sights on the future. But its many facets — from managing finances and buying a home to achieving work-life balance — can be overwhelming.

In this series, TODAY’s journalists help young Singaporeans navigate this stage of their lives and learn something themselves in the process.

SINGAPORE — Since I was thrown into the working world last year, I’ve had plenty of big numbers tossed at me. 

Save at least S$1 million by age 62 if you wish to retire comfortably, people told me. Add to that another S$300,000 for a four-room Build-To-Order (BTO) flat, or at least S$500,000 if you plan to buy one in a mature estate or a resale unit. And don’t forget to set aside renovation costs.

On top of these, if you want to have children, make sure to set aside between S$200,000 and S$1 million a child, these well-meaning advisers say. 

For someone who’s just embarking on this adulting journey on a rookie journalist’s income, these figures seem way out of reach and are anxiety-inducing — so much so that I have questioned whether I would ever be able to afford a child if that is what it costs.  

Previously, when the topic came up, I would dismiss it by asking my girlfriend: “Do you want to retire or do you want to have kids?”

But as I was working on this column, I decided to speak to a financial consultant to get a clearer idea of just how much it would cost me to raise a child. 

After all, I’m aware that how much it would eventually cost depends on the choices my partner and I make.

For example, whether we deliver the baby in a private or public hospital, place the child in a kindergarten where the fees are S$500 a month or S$2,000, plan to sign them up for expensive enrichment classes and feed them only organic produce.

NUMBER CRUNCHING

Mr Shaun Kwan of Great Eastern Financial Advisers said that a simple way to budget your expenditure for a newborn is to split it up into the different stages of your child’s growing-up years. 

For instance, one could look at the key expenses needed in each stage:

• Pregnancy — medical check-ups, childbirth

• Infant (Age zero to two) — diapers, milk, baby equipment, infant care 

• Toddler (Age three to six) — nursery, childcare

• Schooling years (Age seven to 19) — allowance, school fees, tuition 

• University (Age 19 to 25) — allowance, school fees, exchange programme

I did not expect to take almost a full day to fill out an Excel spreadsheet with my estimates for all these items. Looking through diaper options alone gave me a massive headache.

I decided to budget higher costs for what was outside my control. That meant, for example, budgeting for a Caesarean delivery in case there are complications. 

I also budgeted for a polytechnic education, which has higher fees compared to junior colleges or the Institute of Technical Education. For insurance needs, I set aside a recurring S$200 a month. 

I allocated another S$200 a month from the time the baby is born, to be put into a university fund, which at a modest return of 4 per cent interest rate a year would net about S$90,000 by the time the child is 23 — just about enough for a full course at a university here after accounting for inflation.

Adjustments had to be made along the way. After speaking to some parents, for instance, I learnt to budget for two to three tins of milk a month — not because babies drink that much, but that they’ll probably waste up to half that amount.

At the end of the exercise, I learnt that my hypothetical child would cost me S$350,000 to raise to adulthood. 

This still seemed like a daunting amount, especially considering that I chose the cheapest options where I could  — a public hospital delivery, no tuition or enrichment classes and Singapore university fees.

To allay my concerns, Mr Kwan reminded me that these costs do not all have to be paid upfront the moment the baby is born. 

“A lot of people also forget that their income will, more likely than not, rise over the years,” he said.

Based on my estimates, he calculated that my future wife and I would need to set aside about S$300 a month each during the earlier stages of our child’s life and up to about S$800 a month when the child is in the schooling years.

So even if I wanted to have a child right now, it would be financially feasible, provided my partner and I are both working and we continue to draw a regular salary as our child grows.

Mr Kwan, a 29-year-old newlywed, recently went through the same budgeting exercise after he and his wife decided they wanted to be parents.

He added that there are always opportunities to cut costs along the way. Many young parents in the newer public housing estates with BTO flats, for example, have been coordinating bulk orders for baby food through their block’s WhatsApp chat group. 

“So long as you plan properly and live within your means, having a child is very possible,” he said. 

PARENTING IS NOT ALL ABOUT MONEY

Dr Tan Poh Lin, who specialises in research on families and population at the Lee Kuan Yew School of Public Policy, said that my views towards having children are not uncommon in Singapore. 

“Cost considerations are certainly often brought up in surveys, with education (including preschool and enrichment classes) brought up as a key expenditure item.” 

However, she believes that parents have a tendency to overstate the importance of how much money they spend on their child, and to understate the value of being emotionally available and displaying healthy and positive attitudes towards life and work.

Ms June Yong, a freelance writer and owner of Mama Wear Papa Shirt, a blog that discusses parenting and education in Singapore, said that whether or not a person wants to have children should not begin or end with financial considerations.

“If you ask any parent you meet, they most likely will not say that they had this number of kids because they could afford it. What they will say is something like, ‘We love children, we love each other, or we felt like we were ready to take the next step’,” the mother-of-three said.

So now that I’ve worked out the sums and feel more confident that I can afford a child, how will I know when I’m emotionally or psychologically ready for one?

Ms Grace Goh, a counsellor at Mind What Matters clinic, said that an important question couples need to ask themselves is whether they are willing to sacrifice or change some of their lifestyle habits for their child.

One way of knowing when I am ready to be a parent is when my desire to have a child overrides any fear of future challenges — financial or otherwise.

“It’s not wrong if people don’t want to have children,” she stressed. 

However, it should be standard practice for young couples to think deeply about any fears or concerns they may have about becoming parents. 

Even if they do decide that they do not want to have children in the future, reflecting on these fears can be beneficial to their self-discovery. It can also help couples understand each other better by opening up conversations about each other and their values.

Unfortunately, there’s no spreadsheet or checklist of fears and concerns I can work through to calculate whether I’m emotionally ready for kids.

But having gone through the number-crunching exercise with Mr Kwan and seeing in context how much I would have to set aside to raise a child has made the high costs seem far less daunting.

The exercise also helped me realise that even though, in the past, I brushed aside thoughts of having children, there is a part of me that is open to the idea now that I know it’s financially feasible.

Most of all, it has left me feeling more empowered — I know now that even if I end up not having children, it will be because that is a decision I make consciously, and not a path assigned to me simply because I could not afford one.

ABOUT THE WRITER:

Daryl Choo is a journalist at TODAY, where he covers transport, defence, manpower, and crime and court.