Home' Trinidad and Tobago Guardian : August 16th 2015 Contents Tradition holds that children
are of divine provenance and
anything needed for their
care would come from that
source. However, as it is also
traditionally said God is
more likely to help those
who help themselves, it may make some sense
to do some financial planning before your little
Because almost no statistics exist on the
cost of raising a child today in T&T, the Sunday
BG did some estimations. It is not cheap.
From infancy to the age of 18, children need
food, clothes, healthcare, schooling and asso-
ciated supplies. These do not take into account
the extras: presents, extra-circular activities,
vacations and emergencies.
Financial advisers Winston Williams and
Keith Charles, both of whom the Sunday BG
regularly consult, estimated that basic costs
could run between $400,000 and $600,000.
Some of the readers we reached out to on
Facebook put the cost at over $2.5 million per
child. Figures from the US (they vary widely
there, too) suggest that raising a child could
cost anywhere between US$250,000 to
US$1,200,000. That s between $1.5 million
and $7.6 million.
Beyond the cost, consistently registering
across the comments was the strain raising a
child put on a family s financing, even when
the parents are prepared for it. This, of course,
based on the assumption it is a two-parent
household. Single parents and the parents of
children with special needs have additional
Then, the financial cost of parenting may
not necessarily stop at the age of 18.
Another US trend that seems to be catching
on in T&T is the "failure to launch" syndrome.
Initially used to described adults who missed
key psychological milestones, it has also come
to characterise that mass of Gen Ys (American
slang for individuals born between 1981 to
2000) who are finding themselves back at
home after leaving university. Unlike the US,
where the problem stems from student debt,
the high cost of housing and lack of suitable
employment seem to be the culprits in T&T.
"If the average three-bedroom home costs
$1.2 million, for 30-year mortgage, the payment
is going to be somewhere in the vicinity of
$11,000," said Williams. Keeping their debt
service ratio in mind, Williams continued:
"Can a young graduate and really afford a
house if they just started working? The answer
to that is no. A young university grad coming
out makes between $8,000 and $12,000. With
the two of them, that s a maximum combined
income of $24,000. You can t get a house for
$1.2 million with that. So what we do? We
live by Mummy and Daddy."
In addition to bearing miscellaneous costs
of having adult children at home, parents may
also be paying for adult children away at school
or completing graduate programmes locally
or contributing to the care of their own parents.
Timing is everything
As a parent, you may feel the need to provide
your children with all the benefits you may
have never had. But at what cost to yourself?
While children can find many ways to fund
a tertiary education, parents only have a few
chances to get retirement right.
"If you are spending money on your chil-
dren s education, you cannot make that accel-
erated contribution toward your retirement
plan," said Williams.
"At 58, smack in the middle of the time
when you want to be pumping as much as
you can into your retirement fund, you are
now paying for your child to enter university
for a period that will extend beyond the 60,
when you are looking to enjoy your savings
and your hard work."
This is assuming, of course, that you started
having children in your 40s.
Some of our social media contributors said
it may be better to have children later when
you are reaching the peak of your income
earning, but Charles thinks differently, advo-
cating that parents get all the big expense,
including their children out of the way when
they are young.
"The early start allows for addressing finan-
cial exigencies that may occur in the child s
dependency age," he said, "These can better
be addressed by a parent during their income-
earning years rather than during retirement
where income may be more or less fixed and
the ability to fund and or access financing due
to age restrictions at financial institutions
might be limited. Child bearing at an early
age together with big-ticket financial decisions
such as home ownership and purchasing a
vehicle might be an ideal mix."
However, if you re a woman, having your
children earlier may not always be in the best
interest of your career. Williams said over their
lifetime, women tended to earn less than men
as well as retire earlier to take care of ailing
parents and in-laws, resulting in less retirement
income accumulated. Meanwhile, they live
longer in retirement than men and have to
factor in the smaller span of time over which
they can have children.
"I think for women, because of the ticking
clock and those other factors, I think they
need to have a greater sense of responsibility
in terms of how this impacts their life and not
take the approach, whenever it happens, it
"I think for the professional women, it
should be between 25 and 30. To give you a
chance to retire comfortably. I might even
push it a little upward for the professional
woman, until she is about 32. By the time the
child is 18, she is 50 and she still has time to
accumulate. But anytime you push it beyond
that, the time of you educating your children
and the time of your retirement are going to
cross and something is going to have to give,"
He said while men are likely to suffer some
financial impact when they have children, par-
ticularly if they are the only breadwinner in
the home, it is not the same as with women.
Ultimately, the Pan American agency head
said, women needed to strike a balance
between her desires and the potential costs.
Williams said if a parent realises that their
child s education and their retirement are all
happening at the same time, a certain "crowd-
ing" effect can take place and another choice
may have to be made here as well.
"If you find that crowding effect happening
there, you need to either postpone your retire-
ment maybe. If you have your child later, then
you understand that the age 60 requirement
is not practical. You may need to push your
retirement to 65 or even 67," he said.
BG4 COVER STORY
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt AUGUST 16 • 2015
When is the right
time to have children?
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