You’ve got to be kidding. The price tag for raising two kids in a typical middle-income Australian family as of December 2012 is a staggering $812,000! That’s up 50% compared to 2007 and almost double the cost since 2002.
But Australia is not alone when it comes to soaring child-rearing costs. It’s happening all across the world, including in Dubai in the United Arab Emirates, a favourite destination for overseas workers from Australia and elsewhere.
According to the Yahoo blog, 971 Report, the cost of raising one child in the UAE is now put at $336,425. That’s just raising a child until the age of 18. Doubling up to two children turns the figure into a mind-numbing $672,850. Ouch! Not quite as expensive as in Australia, admittedly, but not too far off either. At the very least, it’s enough to make any self-respecting Dubai parent consider taking out several bank loans to cover the cost.
Looking at the figures in more detail, the biggest chunk goes on education, at $112,273 per child. Childcare and babysitting for each child adds up to $84,144; toys, hobbies and leisure $42,057; food $28,034; clothes $16,822; birthdays and festivities $16,822; holidays $14,022; and pocket money $5,608. A personal loan just ain’t going to cut it unless personal banking in the UAE is of a different order compared to Australia.
The Australian child-rearing figures come courtesy of the 33rd AMP.NATSEM “Cost of Kids” report. Since 2001, financial services firm AMP and the National Centre for Social and Economic Modelling (NATSEM) in Canberra have produced a series of reports that open windows on Australian society, the way Australians live and work and their financial and personal aspirations.
Craig Meller, AMP Financial Services MD, says in the report’s foreword there are lots of things parents want for their children. Parents have dreams for them from the moment they are born. They hope their children will have happy lives, fulfilling jobs and plenty of opportunities – eventually, perhaps families of their own.
Mr Meller says, “But what’s the cost to achieve this? While it’s true that money doesn’t buy happiness, as parents it doesn’t always feel that way. Parents want the best for their children, and often what we regard as ‘the best’ can mean a jolting hit to the hip pocket.”
The latest report findings show parents are now paying more than ever before, with the cost of bringing up two children for a typical middle-income family rising to $812,000, up from $537,000 in 2007 when AMP.NATSEM last looked at the topic.
Mr Meller continues, “So the cost of kids for a typical middle income family has risen by around 50% since 2007 but household incomes over the same period have only grown 25%, which means the growth in the cost of raising children is double that of income growth.
“If the proportion of income devoted to raising children is steadily increasing, as has proven to be the case so far, what will the picture look like in the future? Will we get to a point when the cost of raising children is actually more than we’re earning? And what does a scenario like this mean for other areas of our life, such as our retirement?”
The report, adds Mr Meller, highlights the importance of having a sensible budget and savings plan in place, thus ensuring the best for both your kids and yourself.