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You can buy two swanky BMWs, a luxury penthouse or take annual vacations to exotic locales for the rest of your life. Or, you could bring up a child. ET Wealth works out the cost incurred by middle-class parents in raising a kid from cradle to college, that is, till he is 21.

How much it costs to raise a child

LIFE
3% `1.64 lakh
MISCELLANEOUS

INSURANCE NEEDS DURING YOUR

The Economic Times Wealth, April 18, 2011

Learn & Keep

HOW EXPENSES CHANGE WITH AGE

As your child grows, so do his demands. With every passing year, some of his needs increase, while others wane. For instance, healthcare costs are the highest till the child is 4 years old, whereas education costs form a huge chunk of expenses between 17 and 21 years.

100%

`4.86 lakh

`7.93 lakh

`9.42 lakh

`11.46 lakh

`21.08 lakh

50 3

70%

of the total expense on healthcare is incurred in the rst three years of the childs life.

HOW MUCH AND ON WHAT WILL YOU SPEND IN RAISING A CHILD

12%

ENTERTAINMENT

`6.57 lakh

19% `10.4 lakh

HOUSING

50% Miscellaneous Transportation Healthcare Entertainment Education Clothing Housing 30%

5% `2.74 lakh
TRANSPORTATION

Food

5% `2.74 lakh
FOOD
The calculations are based on ET Wealths estimates of bringing up a child in a middleclass household in urban India.

the total healthcare cost is what parents spend on a childs entertainment. This is mostly due to the high cost of gadgets, such as mobile phones, that children consider essential.

times

0-4 yrs

5-8 yrs

9-12 yrs

13-16 yrs

17-21 yrs

Amount (`)

6% `3.29 lakh
TOTAL:
CLOTHING

169

25 lakh

{`

54.75

has been the rise in ination in primary and secondary education from 2005 to 2011, according to a survey by Assocham.

20 lakh

SOME EXPENSES RISE FASTER THAN OTHERS

Education costs shoot up if a child joins a professional course.

Education expenses have risen faster in metro cities compared with that in tier 2 and 3 towns. Basic expenses include housing, clothing, food and miscellaneous costs. Entertainment is a major expense, higher than healthcare and transportation combined.

lakh

}
46% `25.19 lakh
EDUCATION

4% `2.19 lakh
HEALTHCARE

10 lakh

Entertainment expenses rise faster after the child enters his teens.

Medical costs are high in the initial years, but they remain low if there is no major illness. Transportation is not a big expense, but grows at a steady pace till the child becomes independent.

0 0 5 Age in years 12 21
TEXT: BABAR ZAIDI PHOTOS: AMRENDRA JHA, SHOME BASU

THE ASSUMPTIONS WE MADE IN CALCULATING THE COST OF RAISING A CHILD HOUSING

A couple can live in a one-bedroom at, but will need a bigger house when the child arrives. We have assumed that after a child is 4 years old , a family will rent at least a two-bedroom house, which will add `2,000 to the monthly expense.

FOOD
This includes everything a child eats. In the initial years, the expense is relatively high because of the specialised diet requirements of an infant, but it gradually tapers down. Food does not comprise a major expense in the total costs.

CLOTHING
Childrens clothes are expensive, sometimes costlier than their parents clothes. And you need to buy them frequently in the early years as children outgrow their wardrobes fast. Our estimates include all clothes, including school uniforms and shoes.

TRANSPORTATION
We have included the cost of travelling to school, college and on family holidays. This may go down when the child becomes older and starts using public transport. However, he will not be eligible for discounted rail and bus fares that apply to kids below 12 years.

HEALTHCARE
Healthcare costs are higher in the initial years when a child gets vaccinations. Pre-natal and maternity expenses have also been included. We have assumed that the child will not suffer any major illness and have included a health insurance cover of `1 lakh.

EDUCATION
We have included everything relating to school and college education. We assume the child studies in a public school. The costs include tuition fee, books, stationery, coaching, school trips and functions. Uniform and transportation are calculated separately.

ENTERTAINMENT
Entertaining your child takes up as much money as you spend combinedly on feeding and clothing him. It includes the amount spent on toys, story books, Internet connection, cable TV, going to the movies, CDs, DVDs, cell phone bills, holiday trips, etc.

MISCELLANEOUS
An additional member means extra living expenses. More electricity consumption, fatter telephone bills, more soap, toothpaste, etc. This also includes the higher wages payable to servants for child care in the initial years.