Many young couples I know shudder to think of having a kid. One of the guys told me ‘I am still a kid…how can I have a kid‘. And he is 29 and so is his wife.

This is not a class on whether to have a kid, but for those who have a kid! Have you wondered how much does a kid cost you?

Does the cost increase (per month) as the kid’s age increases?

Well have you at least tried enumerating them? School fees, clothes, the doc, the dentist, vitamins, antibiotics, dresses and accessories – the tennis shoes, the swimming class and the badminton racquet, the list just goes on.

Of course I am not talking food, rent, etc. which go to the common pool – and then get divided by say 3 or 4 depending upon how many people are there in the house.

Then there could be coaching class fees, parties, gifts, entertainment, gadgets,….

Sadly there is very little research in India about such things, and one has to just make estimates. Estimates can obviously go wrong by a mile…and we would not even know about it.

The costs of a kid – right from delivery to their wedding can be a stunning Rs. 1 crore – for a kid born in say 2000. Safely add 8% inflation for every year after that. So in case you have decided to have a kid in the year 2013 or 2014, you should estimate a requirement of about Rs. 2 crores. This is of course assuming a normal kid, normal delivery, ordinary school, ordinary education. If you throw in an International school  – that itself will jack up prices by about Rs. 50 lakhs.

Happily most of this money will be needed back ended, so you do have time to earn it! However if you think your son needs a brother or a sister…well add another Rs. 4 crores to the budget 🙂

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  1. We look at the school fee of 50K-100K per annum and compare it how much we spent on our education. But is the comparison justified?

    The schools which have 50k-100K fees p.n have around 20 child in the class compared to school which has fee of Rs 12000 p.m. While the quality of education is debatable the personal attention on kids is there and this leads to a secure, confident child.

    We should also see the fee as % of the parents salary. Isn’t the ratio of school fee/parents salary still same? Those who can afford paying 50k-100K p.a also earn more than 1 lakh p.a

  2. “fee as % of the parents salary” – i don’t think this makes sense. at my dad’s salary 40 yrs back, he was spending almost 40% on rent & 30% of food. if we do the same, we’ll be living in palaces and stuffing our mouth with caviar & antique scotch 🙂

  3. param,

    %age works only to a point. However, either you are earning fabulously or classifying your expenses differently. Eating out is entertainment and eating at home is food.

    Also assuming you have a take home pay of Rs. 24 lakhs (I mean cash, not ctc) and you have 2 kids in IB school…you will be spending 50% of your take home pay. Not unheard of.

    and a friend on a ctc of Rs. 1.36 cr spending Rs.50L on his son’s studies in UK.

    So some of the ratios do still happen, right? A friend with a ctc of Rs. 2.5 cr and spending Rs. 60L as rent (obviously this can happen only in Mumbai, not even Delhi)….

  4. Subra you are right % works only upto a point.
    Param caviar..hummm I an not sure if even higher middle class can afford it.
    All I can say a parent should choose his children school according to tradeoff between the fees they can afford(and side stuff) and their wishes.
    When We decided to send my child to a school in Bangalore we had option of:-International schools ( 4 lakh an annum), Missionary schools( 12K p.a), private schools( 50K-1 lakh p.a). We chose the private school because a) number of children in class were less than 30. b) Distance from our house less than 5 km. c) we could afford that without stretching our budget and felt our child would benefit best.
    To each his own..do you have kids? If yes how did you choose the school!

  5. subra, how i wish to see take home pay of that order, but in reality it is 1/3rd of it 🙁 but my point is, even if you earn 24L, if a 12K school serves your need, why not consider it? people wonder why i take my kid in 2/3 ac when i can afford air, but i still can’t see why spending should increase solely based on income…

    bemoneyaware, i agree that to each his own. but i feel bad when people over-stretch themselves to satisfy their ego & then crib that kids are expensive. i have a son & i put him in a convent school – fees at class 1 came to around 18K for whole year, which was well within our budget. KV would have been ideal, but one nearby was for rly & others were too far off.

  6. oh God really it is scaring , whatever we earn it is for our kids and there are parents who sacrifice their luxuries for kids and my advice is plan according to what you earn and spend according to how much you can afford and there are parents who overlook beyond pinnacle and which would make them wretched further …… be alert and have control on what u spend n b wise enough……..

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