That’s corret. However, if you consider the alternative costs from that angle, then you have to take into account that having children usually pays off in long-term (not speaking about additional motivation), you can count on their support when you’ll get older and/or have unexpected medical expenses.
Speaking of the maintaining labour marketability, I think it makes more sense to work part-time and pay of childcare instead of staying at home full time, to maintain the career flow and at least to not need to start from scratch after 6 years of rising children. Although on the other hand, 6 years is a half way to FI in Switzerland - if you and your spouse can get into FI in 12 years, then you’re both eventually land in a point where you don’t need to work anymore (and thus don’t need to maintain your labour marketability).
You don’t have to pay anything extra for the spouse if your yearly AVS total contribution - employee and employer together - is at least 956 CHF/year (2x the minimum AVS contribution).
2000-2500 for childcare/private school if both parents work full-time, without relatives to support. And what not a lot of people seem not to realize, is that this is the cost until the kid is relatively independent, meaning can commute alone between home and school, and stay at home until the parent(s) come back Public school is almost as expensive as private school when both parents work full-time, because you need to cover lunch, daycare (school stops around 11:30 and around 15:00…), and school holidays in camps (16 weeks, minus 5 weeks with the parents).
But I also consider that this is what a kid costs even if the spouse stops working, or work part-time : you lose pension fund contributions and work experience during some years. Not to mention financial independence and the security of having double-income.
and +1000 minimum for the rest (bigger flat, insurance, food, holidays etc)
It all depends on the number of kids and lifestyle, and many other factors which are fortunately not financial related…
First few years of the child’s life could be a really fun time to travel around the world or have extended stays in lower cost countries, I’ve heard of some families doing a sailboat lifestyle for a few years. Especially when they are young and still like you and need you constantly.
Here is an update. 21 is the average age of a child to leave the parental home. Until then CHF 370’000 have accrued through direct (CHF 187k) and indirect costs (less salary through reduction of work time CHF 182k), according to Bank Cler. My son is 21 and I will pay 850 CHF per month until the end of his studies. My total number is closer to CHF 0.5m with above average expenses and studies until age 25. Would I do it again? Absolutely! It made me see things from a totally different angle and allowed me to shift my priorities away from work, work, work.
That’s highly variable, depending on your salary, when Mum goes back to work & when she does how many days you feel comfortable with giving your child “away” for daycare.
Our child is 2.5y and we’ve probably already “lost” 250k in missed income so far (but all free will).
It was an estimation based on the fact that the mother and I spent more than average on our son and that he did not start earning money in an apprenticeship at age 16, instead might study until age 25.
Your question triggered a trip down the rabbit hole: 3 days per week private day care and private Kindergarten from age 0.5 to 6, private nanny age 6 - 12
Estimation
Age 0-9: 2000 per month = 216’000
Age 10-18 lump sum agreed in divorce: 350’000
Age 19-25 2500 per month = 210’000
My ex-wife and my combined numbers are more like 776’000 for 1 child. That’s a 3/4 million and a lot of early retirement. Jeez! @ma0 sometimes it’s better not to ask questions
Sorry for the question but… You were paying 3500k/12/8years= 3645 CHF per month to your ex-wife after divorce for a kid? Being myself divorced with a kid I find this sum really huge!
You where having your kid only few days in the month/year?
I paid half of that, while my ex contributed the other half. At least the madness was equitable. And the experience was such that I became very frugal and ended up with you guys from the FIRE community
Yes, I got to spend every other weekend and 2 weeks of vacation every year (at my own expenses, gosh, I didn’t even calculate those sums)
I hope that is with a bit of irony, or you forgot to add “…if you’re lucky”.
I think it’s best not to expect or count on this “old age help” and be positively surprised if it indeed turns out that way. If you do expect it, prepare to be bitterly disappointed, unfortunately.
I think the weight of a few major “costs” are so massive compared to typical variable expenses such as food and clothes (that one likes to think of first), that it’s possible to do the calculation from memory on a post-it. Lost earnings, external day care, renting one more room in a flat, Krankenkasse.
Sorry, yes I think we mean the same. I just felt you were a bit too optimistic with such a sure “caring son/daughter” outcome.
This is probably the biggest investment and also highest risk investment with very uncertain return that we make, so to speak.
But yeah, so we do it out of other reason too.
Weird calculation . 250.- a month until 18 equal to 54k income from the state. And how much in tax deduction? In my case at least 4k less taxes per children, meaning another 72k in money saved.
Does the research include this?
Children have a price and I’m not saying they make you money, but if you want, there are lots of way to reduce cost
Biggest drag is going to be lost earnings.
Can you not cover the expenses out of your monthly savings rate, considering these lost earnings?
That’s potentially the only (hopefully little) gap I’d consider covering.
Don’t forget, tax will be lower too, of course.
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