Recently, someone posted that they plan to increase their savings rate despite expecting a baby. I took that as an opportunity to calculate (or at least roughly estimate) how much my child cost during the first 3 years.
But let’s start with what we received:
12 × 1,800 euros in parental allowance = 21,600 euros
36 × 254 euros (average) in child benefits = 9,144 euros
Approx. 20,000 euros in tax refunds due to loss of income
9,000 euros from selling a small car
=> 59,744 euros in total.
And now let’s take a look at what it roughly cost us:
300 euros for clothes (we got a lot from relatives)
500 euros for toys
Various classes (music, children’s gymnastics, etc.) = 1,000 euros
36 × 30 euros for food (average) = 1,080 euros
36 × 40 euros for diapers and hygiene products = 1,440 euros
36 × 70 euros for the child’s savings account = 2,520 euros
3,000 euros in healthcare costs
4,000 euros for basic furnishings (beds, wardrobe, stroller, car seat, etc.)
12 × 450 euros in daycare fees = 5,400 euros
24 × 900 euros increase in rent (including utilities) (moving to a larger apartment after 1 year) = 21,600 euros
24,000 euros net loss of earnings for Parent 1
30,000 euros for a station wagon
100,000 euros net loss of earnings for Parent 2
=> 194,840 euros
Not included, for example, are lost pension points. Money saved by cutting out long-distance travel, eating out less often, etc. This was likely offset quite well by admission fees (zoo) and more expensive family vacations in the local area.
That means our child cost us about 135,000 euros, or 45k per year, in the first 3 years. If I’d just plowed that money into a global ETF over the last 3 years, I’d have a few thousand in paper gains on top of that 🥲.
Of course, when it comes to rent, we don’t live in rural Mecklenburg-Western Pomerania. And of course, you first have to earn that much and be privileged enough to be able to afford all of this. We’re grateful for that. It’s certainly possible to get by with lower costs. In the vast majority of cases, you have to. But there are surely plenty of cases where raising a child is even more expensive.
To be honest, I’m pretty shocked by the numbers. Please let me know if I’ve made any mistakes—I actually don’t want to believe this 😅.
Finally, let’s take a look into the future. How will the costs develop over the next 3 years? I’m estimating
36 × 10 euros for hygiene products = 360 euros
1,000 euros for clothing
1,000 euros for toys
1,000 euros for classes and clubs
2,520 euros for the child’s savings account
3,000 euros for healthcare costs
36 × 100 euros for food = 3,600 euros
36 × 300 euros for daycare = 10,800 euros
36 × 900 euros more in rent (including utilities) = 32,400 euros
54,000 euros net loss of income for Parent 1
=> 109,680 euros
I expect to receive at least another 10,000 euros in tax refunds. Child benefits are also increasing, so we could end up with exactly 90k in costs for one child over the next three years. So, at least it’s “only” 30k per year.
But the thing is, there isn’t just one child. There are two 💸💸💸
And how much do your hobbies cost?
