Singaporean woman asks, “Do I need to set aside S$1 million per kid?” to raise them in Singapore

SINGAPORE: Raising a child is a life-changing experience, and it’s also undeniably costly, especially in developed nations like Singapore, as one Singaporean woman found herself contemplating just how much it would cost to bring up a child in this city-state.

Turning to online forums where Singaporean parents openly discuss their financial responsibilities, she discovered that the average cost of raising a child is approximately $3,000 monthly.

This estimate, while providing a useful benchmark, can vary year by year based on numerous factors such as inflation, changes in lifestyle, and unexpected expenses.

Intrigued by these figures and looking for a more comprehensive understanding, the woman took her inquiry to the r/sgHENRY community and wrote: “Would it be fair to estimate around $35k a year?

Which using 3.5% SWR (safe withdrawal rate) to be conservative means I need to set aside $1 million invested per kid? I personally find it quite interesting and helpful to see that (because of the rounded number).

Or is this too simplified and I’ve grossly miscalculated? I would love to hear your thoughts.”

“One additional cost driver that is harder to estimate is medical fees.”

In the comments section, a few Singaporean Redditors agreed with the woman’s calculations, saying she would need that much money to raise a little one in today’s economy. One Redditor said, “Yes we budgeted $1m (for premium everything) that’s why only 1 kid lol.”

Another commented, “Your estimate seems correct. It’s not too expensive for a preschool, not too much for tuition, and covers non-music related recreational lessons. You might want to adjust for inflation depending on when you have the kid.”

A few others reminded the woman that if she decides to have a child in the future, she should also consider unexpected costs, like critical illness and hospitalization.

Yet another Redditor shared, “One additional cost driver that is harder to estimate is medical fees. My baby got sick a lot. Lots of trips to paediatrician and GP and hospitals. Have to potentially buffer for that too, but hopefully don’t have to use it!”

However, not everyone was on the same page. Some Redditors argued that having such a large amount of money upfront isn’t necessary.

They suggested that while financial planning is crucial, managing child-rearing costs with more flexible and gradual savings strategies rather than a massive initial investment is possible.

One Redditor expressed, “I think 3k is a bit excessive but that’s me la. I don’t think you need to have invested 1m upfront to have a kid la. That’s crazy. So long as you are financially OK and have 3-5k discretionary income I think it’s fine.

Just go along and take out of your salary every month. The big ticket items are really preschool (once they start going) and of course university.”

Another stated, “Why make things so complicated. Kids only need basic things like nutritious food, simple clothing and love from their parents. Save and plan for their tertiary education… but no need to be soooo detailed for their upbringing costs.”

Read also: “First step, no kids” — Singaporeans say it’s impossible to achieve financial freedom and retire early if one has children

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