{"id":20782,"date":"2015-12-22T10:11:43","date_gmt":"2015-12-22T02:11:43","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=20782"},"modified":"2016-05-27T12:32:47","modified_gmt":"2016-05-27T04:32:47","slug":"having-kids-in-your-20s-or-30s-which-makes-more-money-sense","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/having-kids-in-your-20s-or-30s-which-makes-more-money-sense","title":{"rendered":"Having Kids In Your 20s Or 30s: Which Makes More Money Sense?"},"content":{"rendered":"

More and more couples are postponing having kids as they try to balance their careers and other life goals with their desire to have kids. Having children isn\u2019t just an emotional decision, it is also a financial one.<\/p>\n

We all know that having a child does not come cheap. Here\u2019s a rough estimate on how much a household would spend on their child at different age range of the child. The estimation is for one child, and will double up if you choose to have two kids and triple up if you want to have three kids. We\u2019ve also used a degree programme from a local university offering Australian based degrees.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\n\t
Child Age Range<\/th>Primary Expenses<\/th><\/th>Total<\/th>\n<\/tr>\n<\/thead>\n
0 to 6<\/td>Paediatrician<\/td>RM7,000<\/td>RM184,600<\/td>\n<\/tr>\n
<\/td>Baby Food<\/td>RM14,400<\/td><\/td>\n<\/tr>\n
<\/td>Formula Milk<\/td>RM14,400<\/td><\/td>\n<\/tr>\n
<\/td>Disposable diapers<\/td>RM4,800<\/td><\/td>\n<\/tr>\n
<\/td>Day care Centre<\/td>RM108,000<\/td><\/td>\n<\/tr>\n
<\/td>Insurance<\/td>RM14,400<\/td><\/td>\n<\/tr>\n
<\/td>Living cost<\/td>RM21,600<\/td><\/td>\n<\/tr>\n
7 to 12<\/td>School<\/td>RM10,000<\/td>RM139,600<\/td>\n<\/tr>\n
<\/td>Extra curriculum activities<\/td>RM36,000<\/td><\/td>\n<\/tr>\n
<\/td>Day care Centre<\/td>RM57,600<\/td><\/td>\n<\/tr>\n
<\/td>Insurance<\/td>RM14,400<\/td><\/td>\n<\/tr>\n
<\/td>Living cost<\/td>RM21,600<\/td><\/td>\n<\/tr>\n
13 to 17<\/td>School<\/td>RM12,000<\/td>RM84,300<\/td>\n<\/tr>\n
<\/td>Extra curriculum activities<\/td>RM50,400<\/td><\/td>\n<\/tr>\n
<\/td>Insurance<\/td>RM14,400<\/td><\/td>\n<\/tr>\n
<\/td>Living cost<\/td>RM4,000<\/td><\/td>\n<\/tr>\n
18 to 21<\/td>Living cost during varsity<\/td>RM32,000<\/td>RM43,600<\/td>\n<\/tr>\n
<\/td>Insurance<\/td>RM9.600<\/td><\/td>\n<\/tr>\n<\/tbody>\n
Grand total<\/th><\/th><\/th>RM452,100<\/th>\n<\/tr>\n<\/tfoot>\n<\/table>\n\n

A staggering half a million! It really takes precise planning before you decide to have a child. Ask yourself and your partner these questions: How old should you have your first child for it to be financially easier? Will you and your spouse\u2019s age make a difference?<\/p>\n

iMoney interviewed two couples who had their first child at different stages of their lives to find out how their age (and the corresponding financial state) impact these major expense areas \u2013 child care and medical, tertiary education costs and retirement.<\/p>\n

\"\"<\/a><\/p>\n

Couple A<\/strong> \u2013 Akmar and Shila started their parenthood early, while still saddled with student and car loans. To save on day care expenses, they currently live with Akmar\u2019s parents, but are saving to buy a house by next year.<\/p>\n

Although they spend nearly all of their salary and have very little left to save every month, they wouldn\u2019t change a thing of being young parents because they are confident they can make their budget work with a child.<\/p>\n

Couple B<\/strong> \u2013 Dominic Ng and Jacklyn Soo waited to have their first child after fulfilling three aims they set for themselves \u2013 a bank balance of RM50,000, a house of their own and Soo wanted to complete her Master\u2019s degree in England. Now, they have paid off their car loans and are currently paying off their house loan.<\/p>\n

Both couples invest a significant portion of their salaries towards saving for their child\u2019s tertiary education and their retirement.<\/p>\n

Here\u2019s the timeline process for both these couples based on their different timing of having a child.<\/p>\n

\"\"<\/a><\/p>\n

Which family would fare better financially? Does it make sense to have a baby in your 20s, so you can tackle child-related costs earlier on? Or when you\u2019re in your 30s and more financially stable?<\/p>\n

Here are a few important considerations to bear in mind when you are planning to start a family:<\/p>\n

<\/span>1. Cost of supporting your child till 18<\/strong><\/span><\/h2>\n

Delivering a baby does not come cheap especially if you opt for C-section in a private hospital. For Akmar and Shila, they had a natural birth and spent around RM5,000 for delivery and hospitalisation. They enjoy free child care as Akmar\u2019s parents tend to their daughter while both of them are away at work.<\/p>\n

Due to age complications, Couple B had to opt for Caesarean and it cost them approximately RM15,000. Though, it\u2019s not a guarantee that a younger couple will always have a natural birth but the likelihood of a Caesarean is lower. As the couple lives on their own, Ng and Soo have to leave their son at a day care centre, which costs around RM1,500 a month.<\/p>\n

Though Ng and Soo expend more for their child, at this stage in their life, they are financially ahead of Akmar and Shila, making it easier to fit the higher cost into their budget.<\/p>\n

<\/span>Who has the advantage?<\/strong><\/span><\/h3>\n

Child care cost can take up a huge portion of your budget. Couple A have it easier with the help of his parents, but Ng and his spouse are better off financially (RM38,502 more annually than Akmar and Shila) to cover child care cost too.<\/p>\n

Having a higher salary at the time of child birth could very well mean that Ng and Soo have extra to provide better for their child, without hurting too much of their priority expenses. Because childcare expenses for the child\u2019s first six years proves to be the highest, and as the child grows, the expenses drop, and increase again when the child goes to university.<\/p>\n

Here are how both couples fare financially over the course of their child\u2019s life based on their income and expenses:<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\n\t
Akmar & Shila<\/th><\/th><\/th><\/th><\/th>\n<\/tr>\n<\/thead>\n
Child\u2019s Age<\/td>Parents\u2019 Age<\/td>Income<\/td>Expenses<\/td>Balance<\/td>\n<\/tr>\n
0 to 6<\/td>26 to 32<\/td>RM656,572<\/td>RM530,008<\/td>RM126,563<\/td>\n<\/tr>\n
7 to 12<\/td>33 to 38<\/td>RM771,803<\/td>RM539,703<\/td>RM232,100<\/td>\n<\/tr>\n
13 to 17<\/td>39 to 43<\/td>RM840,221<\/td>RM484,366<\/td>RM355,855<\/td>\n<\/tr>\n
18 to 21<\/td>44 to 47<\/td>RM823,913<\/td>RM412,548<\/td>RM411,365<\/td>\n<\/tr>\n<\/tbody>\n
Total<\/th><\/th>RM3,092,509<\/th>RM1,966,625<\/th>RM1,125,883<\/th>\n<\/tr>\n<\/tfoot>\n<\/table>\n\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\n\t
Ng & Soo<\/th><\/th><\/th><\/th><\/th>\n<\/tr>\n<\/thead>\n
Child\u2019s Age<\/td>Parents\u2019 Age<\/td>Income<\/td>Expenses<\/td>Balance<\/td>\n<\/tr>\n
0 to 6<\/td>34 to 40<\/td>RM970,055<\/td>RM700,107<\/td>RM269,948<\/td>\n<\/tr>\n
7 to 12<\/td>41 to 46<\/td>RM1,136,230<\/td>RM658,977<\/td>RM477,253<\/td>\n<\/tr>\n
13 to 17<\/td>47 to 51<\/td>RM1,143,021<\/td>RM603,761<\/td>RM539,260<\/td>\n<\/tr>\n
18 to 21<\/td>52 to 55<\/td>RM978,464<\/td>RM531,409<\/td>RM447,055<\/td>\n<\/tr>\n<\/tbody>\n
Total <\/th><\/th>RM4,227,770<\/th>RM2,494,254<\/th>RM1,733,516<\/th>\n<\/tr>\n<\/tfoot>\n<\/table>\n\n

To simplify these numbers we made a few assumptions:<\/em><\/p>\n