Financial Shocks of Child Raising Revealed: Experts Suggest Budget Strategies

We know they will need care. We know they will be another mouth to feed. But the reality about how much they will need and how much more they will continually require as we put them on the path of holistic development are things no one will ever discover until one actually has children.

Motherhood talks to three sets of parents who tell us, rather hilariously, that the road to child raising is not as straightforward as one thinks. There are many crouching expenditures and even more hidden costs, which is why Motherhood is also talking to two financial experts at the end of the article who suggest contingency plans to navigate this expensive parenting journey.

Jo is the mother three boys ─ Lucas (six), Isaac (three) and Dylan (one)


Jo with her family of boys
Jo with her family of boys (Image Credit: Jo Lee)
I have three kids. Each one has contributed a different kind of financial drama but looking back, I think I spent the most on my firstborn.

At the time, being a first time mother, the only thing on my mind was to give the best to my unborn child. We got almost everything new ─ the carrier, stroller, car seats, clothes and, coconut husk baby mattresses, breathable bed sheets/blankets and so on. We went for timely checkups, took prenatal supplements and nutrient dense food, visited baby fairs and signed up for every single mother/baby forum there was.

Financial Dramas Galore

We had to fork out RM7K to RM8K for each of their arrivals, and then another RM200 to RM250 each for their insurances which I am glad I bought for them.

Then there were their almost-monthly vaccinations which not only added to the expenses but also subtracted from my Annual Leave. Each time they were sick or not feeling well, their clinic visits averaged RM120 to RM190 per trip.

So Hand-Foot-Mouth-Disease, Influenza, prolonged cough or fevers are things worse than nightmares. When my first-born Lucas was still small and defenseless, paranoia would overtake me and I would be overthinking that my baby was headed for a major catastrophe when actually he was only having a low grade fever. Over the years, I have learned to calm down, wait and observe. Only when it was a real emergency did we go to the doctor, otherwise we would use home remedies and plenty of rest.

Organic Or Bust

When it came to their diets I have this bullheaded mentality that they will eat nothing but organic. We do know it is not harmful to feed normal food but we can’t shake off the fact that their small organs are growing and we cannot burden their systems. Once, we brought back 18 cans of formula milk from Australia. As for enrichment programmes and activities, I enrolled Lucas in sensory class and gyms to assist with his motorskill developments. Here’s one lesson we learned. Some of the “activities” could have been done at home! These enrichment programmes are not as straight forward as they seem. There are enrollment fees and deposits, so before class starts, we would have already forked out a sum.

Nowadays, instead of wasting money on these gyms and sensory development classes, we bring the kids to the beach every two months, we go on trips, petting zoos and so on. I think every single cent spent on these alternatives is way better and we get to spend time together as a unit instead of waiting behind glass windows for their class to finish.

(Left) Dylan, the youngest, is only a year old. He is surrounded by his brothers Lucas and Isaac. (Right) The boys with their father on their day out.
(Left Pix) Dylan, the youngest, is only a year old. He is surrounded by his brothers Lucas and Isaac. (Right Pix) Boys just love monster trucks. Lucas and Isaac with their father on their day out. (Image Credit: Jo Lee)

Buy, Buy, Buy!

Also, being parents to young kids, our judgments tend to get screwed. Anything good for the kids ─ we buy. Anything marketed as germ killers or child must-haves ─ we buy. The recent hype I felt trapped in was essential oils. I used to get a few bottles for the kids but I have friends who buy the entire range, almost the whole catalogue like they are miracle oils! And these items are not cheap.

Lastly, pre-schools and toys are expensive. Long gone are those stuffed toys my generation used to have. Nowadays, we are talking about electronic talking dogs, legos, building magnets, magic sands, robo poli towns and so on.

My pocket is still bleeding because of the kids. My husband and I don’t mind at all because they deserve the best. We learned along the way that some financial mistakes are unavoidable but I think our expenses in raising children are pretty balanced out. We stretch our Ringgit by buying in bulk (diapers, milk, cereals) and buying online (clothes, toys, etc). However, there are things we cannot save on such as vaccinations, education and insurance.

Jack is the father of a 16-month old daughter

Family photo (From left) Jack, Housene and Saskia (Image Credit: Jack Johnson)
Family photo (From left) Jack, Housene and Saskia (Image Credit: Jack Johnson)
Iam Jack. I am a 36-year-old British living in KL. My wife Housene, is a Malaysian and our daughter Saskia is 16 months old.

I am a fashion stylist and my wife is a make-up artist.

We have been trying for a child for three years and during that time, we visited a private hospital every month for specialist consultation to help my wife get pregnant. Once she did, we continued to visit the specialist for regular checkups and scans which were costly but we didn’t see it as a big expense as we wanted the best service and due to my wife suffering from Diabeties during pregnancy, we wanted to get the best care possible.

Specialist Care

After my daughter was born, the biggest unexpected costs were for medical bills as each time she showed the slightest symptoms of sickness, we would panic and rush for medical advice. Many times the medication and diagnoses from clinics was not correct so we would often visit two to three clinics until we were confident in the medical advice and treatment.

My medical insurance coverage covers all three of us but what we found was that most of the panel clinics do not specialise in child care or medical conditions. Most of the cases were just fevers and bronchitis and we found ourselves going straight to the children’s unit in hospitals as the care and diagnosis was much better.

These costs were unexpected and they did not have a huge impact on our finances although they could easily wipe savings. Another thing I found is that clinics and some hospitals often try to prescribe more medicine than you require. I visited a medical centre once at 2am as my daughter was vomiting very badly. The consultation charge was RM90 but they tried to prescribe me close to RM300 in medication, most of which was not required.

Older and Wiser Now

Now that my daughter is older and her immune system is stronger, we are able to identify sickness easier and don’t spend as much money and time visiting multiple medical clinics as we have learnt where to go for the best treatment.

In terms of monthly expenses, when my daughter started eating solid foods I started buying organic baby foods as it has no sugar and this has increased our food budget by at least 40%.

(Far Right) Jack and the team of fashion label LOKA (Image Credit: Jack Johnson)
(Far Right) Jack and the team of fashion label LOKA (Image Credit: Jack Johnson)

As she is growing up, we are not buying baby foods anymore but we spend a lot on fresh organic foods from higher end grocery stores to get the best quality for her. On average I spend about RM500 per month on my daughter’s food.

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For milk and nappies, initially we would buy in single packs each week but now my wife buys in bulk for the whole month. This helps with our budgeting for the month and ensures we don’t run out. Buying nappies online is much more cost effective.

Childcare costs is not something that we have as my wife has taken time off from her career to take care of our daughter. We get her vaccinations from government clinics so this is no expense for us.

Runaway Medical Expenses

If I could go back one year and make any changes, I would have done more research on the best clinics in my area which would have saved us over paying in medical costs.

I highly recommend anyone having a child to get medical insurance. On average, the medical costs for my daughter for the past year have been around RM1,600 but 70% of that has been covered by the medical insurance policy.

In total, I would estimate that each month I spend a total of RM1,000 on my daughter’s food and essentials.

Ai Ching is the mother of a nine-year-old daughter

Ai Ching and her daughter (Image Credit: Chan Ai Ching)
Ai Ching and her daughter (Image Credit: Chan Ai Ching)
There have been many financial shocks during the early days but at age nine today, the spending would be on shopping! Or in her words ─ building her collection, or picking up souvenirs.

My daughter would complain endlessly about how much I like to look-see around shopping centres during our family time together.  For me, walking around shopping centres is rather therapeutic and occasionally I pick up a couple of good buys.  But the strange thing is, every time we go out and walk around, she would complain about it at first, but she would be the one who would end up insisting to buy something and buys it.


At one point in time, it was almost like a must for her to buy something each time we went out to a mall. And believe me, children really know how to get what they want from their parents.  Initially, it was all cute pleases and pleading then progressively, it turned ugly and they would make you feel like you are a bad parent by giving you “the look” if you say no.   So more often than not, we would take turns caving in to her “shopping needs” and we would justify to ourselves afterwards that the items she wanted was useful in some way.  They are not expensive items as they are mainly toys, gadgets and games, but all these are “unexpected” costs that do add up.

And I am guessing that as she grows older this tendency would just keep increasing, depending on her interests, hobbies and friends.

Repeating Costs

Presently, the biggest recurring costs would be school fees.  Initially we wanted to enrol her into a Chinese Primary School but later decided on an International-based syllabus school which she now enjoys attending.  We selected this school based on their philosophy and method of learning which we felt was suited to her needs and also that their fees were competitive.

We pay RM5,800 per term for three terms a year. She also goes for lots of enrichment classes such as art, Chinese class and Piano and her activities include rock climbing, ice skating and other kid activities that cost quite a lot per session.

It is not easy to manage income and expenses. But life is so dynamic.  We can only plan and budget so much.

Cash Flow & Planning Strategies from Financial Experts

It is understandable to want to provide the best for one’s children, says Joan Tang, a licensed financial planner from Malaysia’s largest financial planning firm, VKA Wealth Planners. “Sometimes, a parent’s experience will affect or determine the choices for their children, even for decisions made on food. Perhaps what is more important is to provide a balanced-diet to the toddler, be it organic or not. While this is more of a choice and a want, it is also important to ensure that it does not make a dent in the household cashflow and finances.”

Another hidden cost that is often overlooked, says Joan, is when the mother or sometimes the father, sacrifices his or her career to stay home and care for the children. What would these financial “losses” be, she asks. “Sometimes, the opportunity cost and income foregone could be way higher than hiring help to look after the child.”

While Joan acknowledges parents’ concern over the reliability of a service provider or babysitter, she also says there is no shortage of stories where babysitters have provided wonderful care and helped parents resolve their childcare issues.

“Having a child is not about losing what we want for ourselves but finding the balance between providing for them and taking care of our own needs and priorities.”

As for footing medical bills, Joan says it is important that parents build a medical fund that can be used to pay for the child’s medical needs. Some types of medical cards require additional documentation for paediatric specialist care. Failure to provide the extra paperwork could result in non-coverage of these bills. Moreover, complications or congenital problems may occur during pregnancy itself. “Therefore,” she adds, “it is advisable to have pre-born insurance so that in the event of such an occurrence, a financial safety net is available to protect the family and ensure that the new-born is not denied of his or her rights to receive quality medical attention.”

Kevin Neoh, also a licensed financial planner from VKA Wealth Planners says the education fee is one of the main recurring big ticket items that parents would have to foot should they decide to send their children to an international or private school from Primary One. “This is like a fee you cannot make a U-turn from once started. The transition from private to the public system of education halfway through and especially during the higher education stage would require the child to make sudden huge adjustments which could disrupt her performance. Hence, it is important for both parents to discuss and review the household cashflow prior to making such a commitment.”

Always leave room and flexibility for the family cashflow so that in the event of unforeseen circumstances, it will not disrupt the continuity of these large education fees, he adds.

At the same time, look a bit further down the road and start saving for tertiary education, reminds Kevin. “It will become a reality before we know it as children grow up in no time!”

Writing a will is another area a parent can do to safeguard the welfare and well-being of their children. “Via a will, they can appoint a guardian to legally provide for the child in areas of living support, healthcare and education should either or both parents be unable to return home to their children.  A more complete solution, however, will require an insurance trust to be set up and funded with sufficient assets to fulfill all instructions made in the best interest of the beneficiary.”

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