Having a baby isn’t just something that’s wise to do without proper financial planning. The estimates for raising a child up till sending him/her to college can be anywhere from HK$4,000,000 and above.
As a couple, of course you don’t need to have all that money on hand the moment your baby pops out, but there are certain key expenses that will occur the moment your little one is born, and things that you will need to prepare for in the months and years just after birth.
Here are four major expenses you should discuss with your spouse when doing your sums to determine how much you should be saving now and setting aside so that you don’t end up stretching your finances later on:
1. Hospital and other medical fees
Unless you plan to get your mother-in-law to stand in as a midwife, your baby is going to be delivered in a hospital. Discuss with your spouse which hospital you wish to use, as well as the type of room needed.
Costs under the public healthcare system are quite affordable for locals with a Hong Kong Permanent Identity Card or a Hong Kong Identity Card, with antenatal checkups covered. You will, however, be expected to pay for your ultrasound and hospital stay but that shouldn’t add up to more than HK$500 a visit including the hospital stay.
If you should choose to deliver in a private hospital, that’s a very different story altogether. Basic delivery prices are around HK$17,000, but a C-section can cost you as much as HK$79,100 depending on where you stay at. That’s a huge jump in costs so consider this carefully.
2. Budget for baby products
If you think looking after a baby isn’t going to be that expensive because babies don’t eat as much as adults, think again. Baby products have the highest turnover rate compared to adults. You might be able to endure wearing your office shirt a couple of days in a row, but there’s no way you’re going to be reusing diapers, or wet wipes, or a whole host of other things that you’re going to be buying heaps of.
When it comes to other peripheral costs, set a pre-birth budget so you don’t go overboard when doing things like preparing baby’s new room and buying the first set of necessities. Then work out a monthly budget for toys, clothes and educational materials. You may not want to scrimp on your own kid, but making prudent financial decisions is part of being a good parent, too.
There are things that you can reuse and in this case, there is absolutely nothing wrong getting hand-me-downs or looking on the second hand market for things like strollers and toys that can be reused.
3. Approach to the kid’s education and extra-curricular activity
You want to know just how ambitious of a parent your spouse intends to be so you can gauge your financial readiness to have a child. When it comes to real bulk of costs of raising a child in Hong Kong, educational costs are definitely one of the largest.
Some parents want to start enrolling their kids in pre-school preparation classes when they turn two, on top of signing them up for anything from ballet and piano to competitive chess and coding. You’ll need to factor in the costs of these classes into your budget. It might also be a good time to point out that you might want to factor in your child’s sanity as well even if you can afford all these classes.
Tuition classes are something else to plan for and decide on further down the road. Will your kid be placed in tuition when he’s in kindergarten, or will it only be used as a recovery measure should your child struggle in school?
4. Care arrangements for the child and how it will impact your careers
Unfortunately, maternity leave isn’t forever, and if both you and your spouse intend to keep working you will have to find somebody to look after your child when you go back to work after childbirth. If you are lucky enough to have your parents in close enough proximity to help look after your kid, that can help alleviate the cost of hiring a domestic helper.
If that is not an option and you need to hire a helper then, chances are, something will have to change—you might have to cut back your own spending in some areas at least in the child’s formative years to accommodate some of these additional costs. Ultimately, it’s important to have a serious conversation with your spouse as to how your lifestyle might have to change before your child is born and not when you are forced to make changes that you didn’t foresee.
What are the most important financial factors to consider when having a child? Tell us in the comments!