It occurred to me when an acquaintance of mine posted the great news of her third pregnancy that too many people still have too many children and this keeps some of us in a vicious cycle of barely meeting basic needs.
Now, whilst money isn’t everything, being broke is no fun either. Having children and family is very fulfilling but from the moment they’re born we have to reconcile that joy with the fact that they will one day leave, to live their own life. You can’t make a career out of having babies; you need to make it a part of your life without making it all of your life.
Okay, I’m talking in darned parables again, what is it I’m talking about? The cost of having children. Each child costs money and of course, time. In my case I am very keen to give my children as much as possible in this jungle of life by providing the best education I can afford and a small lump sum at 18 or 21 just to help them along.
It would have been great if upon graduating from university my parents had said Heather, here is £20,000, we’ve been saving some money for you since the day you were born. We’d love you to invest in a property. That lump sum would not have taken away my personal ambitions to achieve but it would mean I was ahead of the curve.
I had this one Nigerian friend who’s dad had bought a flat in London ages ago so he was earning a huge salary in investment banking and didn’t even have to use any of it on rent. He was saving all his income to buy his own property – trust me, when you don’t have to pay rent you can save a whole lot faster, especially in London where the rents are super crazy. His father had taught him how to handle money with care and that lesson had been taken to heart.
Anyhow, I digress. There are a two points I want to cover:
It is one of my deepest desires to send my children to private school or to at least have the option of sending them to one. If I choose the state education route I want it to be because it was the best option at the time not the only option.
We actually timed pregnancy such that when our son is ready for school the funds are most likely to be there. If not, he won’t be able to go but this very desire means we had to plan things very well.
Firstly, we can’t have children too close together as getting the funds together will take time and it will be too stressful if we’re trying to fund two children at the same time. Secondly, it means we definitely cannot have more than two children. I used to want 3 but I’ve had to be realistic about how affordable it is and in fact, having one child only so far I’ve also realized you don’t need lots of children to be fulfilled; one is plenty and well, a second because everyone loves to have a brother or a sister, right?
It’s fine if we realize that despite our best efforts private school is not affordable but if that happens we will compensate by keeping much more up to date with our kids’ progress and educating them ourselves where we feel the system is falling short.
Perhaps if a private primary school can’t happen then certainly in the 11 years it takes to get to secondary we’ll have managed it.
I said to a friend that I need a 3 year gap so we don’t have two kids going through university at the same time and he was like, “Gosh, you’re thinking far ahead!” I said, “I have to.”
I feel that if I don’t manage to send my kids to good schools I’ll be underachieving compared to my own parents who sent us to the best schools they could afford in Malawi. When I needed extra help I’d tell my dad and he paid for a private tutor at home. This happened at a time when we were falling behind on the maths curriculum at school.
How many of us think about the affordability of children in terms of funding a private education or subsidizing a state one?We in the West have become so accustomed to the fact that the state pays that we take it as a given.
In Malawi where I was born and in Africa in general we don’t think like that because for the most part a state education doesn’t take you very far. Even here in Britain and in the US key jobs in government and in blue chip corporations are run by privately educated men and women; the majority of these people don’t send their own kids to state schools.
The Establishment has pulled a number on the masses: the state funds a basic education but the children of statesmen (including CEO of corporates) don’t go there. Hmmmm?
SAVING FOR KIDS
A good education is the minimum we should want to afford for our kids. Another thing that is ideal, is to save for your children. Even small savings add up massively over time.
Instead of rattling on, I’ll just show you the numbers. If, starting from birth, you save some money for your child every single month until their 18th birthday how much will they have?
Assume a flat interest rate of just 3% compounded monthly:
What about if you save until the 21st birthday at the same interest rate:
Note that the currency doesn’t matter here, the sums still work out the same. If you’re not a single parent and the other parent also earns then you can share the cost of saving for your kids, it doesn’t have to be a 50-50 split, just whatever works for you.
We started saving for our son from the month after he was born. The money goes into an account that will not allow us to withdraw a penny until he is 18. Literally, what goes in CANNOT come out.
Good on you if you’ve found this insight before making babies! What are your thoughts on giving your children the best chance in life?
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Heather on Wealth
I enjoy helping people think through their personal finances and blog about that here. Join my personal finance community at The Money Spot™.