SG Budget Babe
Asked on 03 Dec 2019
Many Singaporeans seems to 'stop at 2', perhaps due to Finance. What is the most cost-effective way to have 3 kids? What is recommended - wife to stay home, or both parents working. What should be the expected Income to support - and also assuming you can pass down clothes from one child to the other.
I was once working with a team where my lunch kakis all have kids, ranging from 1, to 2, to 3.
While there COULD be some economies of scale when it comes to things like prams, cots etc in the early stages, that's where it stops.
Ultimately, you are still paying for 3 children - ie:
3 mouths to feed.
3 kids' school fees
3 kids' tuition fees
3 kids extra-curricular activities
3 kids weekend activities
3 kids' clothes and shoes (if it's a boy and girl, then you can't have them share those)
One thing that I didn't realize with 3 kids is that with transportation - you are looking at 5 people going out for meals. Factor in one helper and parents, then you could be looking at 7 people dining at every meal. These costs add up.
In terms of cost effectiveness - unless one spouse is a high income earner, it is usually the case that both parents work, and grandparents/domestic helper take care of kids. For my peers, it seems that it is not enough to support 3 kids, especially if you want to give them the above average lifestyle.
Communication with spouse is also absolutely key. Managing childrens' expectations is also very key. A friend used to bring kids to cafes with air-con most of the time, but when they had to cut down on costs, it was difficult for the kids to adjust to eating at hawker centres.
And as much as parents would like to not spend on tuition etc - I find that even the very cool parents who say they don't care about kids' grades still feel pressured to send their kids to some form of tuition because of the competition.
Food for thought!
04 Dec 2019
No idea. It depends on how much you want to provide for each child. Seedly did an interesting insight on this. Here is the link:
I say both parents working. Double the income, less xiong on one party, lesser resentment from the one being the sole breadwinner. If anything happens to the working partner, you'll be in big trouble.
I don't think raising kids has to be really expensive, it also depends on what sort of lifestyle you're giving them. Check out the Radford family, they have I think 23 kids and counting, and they managed.
Closer to home, there are families with 5,6 kids, earning probbably much less yet they managed well too. It's not about how much you earn, it's about how you spend .
That's a tough question. I think it depends on household income before deciding whether mum stays home, both parents working etc.
TL:DR (summary extract from https://singlife.com/blog/what-it-costs-to-raise-a-child-in-2019/ )
Pregnancy: At least $8,000
Age 0 to 2: At least $60,000
Age 3 to 6: At least $40,000
Age 7 to 12: At least $70,000
Age 13 to 16: At least $70,000
Age 17 to 19: At least $16,000 (JC) or $35,000 (poly)
Age 19 to 22: At least $40,940 (private) or $118,000 (local university) or $232,000 (overseas university)
Total add up is around $670k for one child. So assuming if one can save a bit from hands-me-down stuff including clothes books etc, for simplistic calculation I'll just use 0.8 (apply 20% on total costs), total costs add up to 1.6M?
Of course the above calculations would not be accurate, because of relevant subsidies etc, so I'm more conservative with the figure above. :)
Firstly and most importantly, it is all about open communication with your partner. It is only when your partner and you share a common goal and vision, then we can discuss further on how to move forward together.
Next, comprehensive financial planning will play a key role in any family planning. This is beacuse of the expected and unexpected stress associated with money. As a result, the last thing that we want to see happening is to have disharmony after money.
That will be the most important step to take at the start. Once we have a breakdown on all the finances, set expectation and understand the limitations on each scenario. Embrace the situation and learn how to compromise.
I have worked with families who are happy and blissful earning a household income of $2k to 3k monthly with 3 kids. Therefore, it is all about managing expectation.
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