Financial planning How much does raising a child actually cost?

By the age of 18, a child will have cost its parents over 200,000 francs. This can be easy to afford with a bit of careful planning.

The little kid stands beaming in the center, with mom and dad holding her hand on either side. According to “Families in Switzerland,” a new report by the Federal Statistical Office, the overwhelming majority of all men and women under 30 in Switzerland dream of the happiness of having a child.

But not everyone who wants a baby will actually go on to have one. Many love-struck couples ask themselves anxiously: “Can we afford to start a family yet?” The patter of tiny feet also represents a cost factor.

1,000 francs per month

A child increases a couple's consumer spending by an average of 942 francs a month – not counting health insurance premiums. Parents must anticipate additional costs of 11,304 francs each year for household expenses alone. By the time the child is 18, this will have added up to over 200,000 francs!

The parental wallet comes under the greatest strain when the child reaches the age of 11 – and their hobbies and education need to be paid for.

The good news is that with every additional child, the cost per child falls. Families with two children have to spend 1,508 francs per month for both of them together. If they go on to have three children, the cost will increase, but only to 1,821 francs – i.e. just 607 francs per child.

There is a good reason why each extra child is proportionately less expensive: certain purchases such as a car seat or tricycle are only required for the first child, and items can then be reused for other siblings.

Single parents have it tough

According to the Federal Statistical Office, families in Switzerland generally manage to make ends meet, despite these extra costs. Their standard of living is among the highest in Europe – with one exception: single parents have to fork out an extra 1,201 francs per child each month, again excluding health insurance premiums. It is often childcare costs that push up the budget. This may be why almost a third of single-parent households complain about financial difficulties – and are frequently dependent on social welfare.

If parents suddenly have to tighten their belts, it’s not just because of the extra costs. The family income often drops when a baby arrives – for example if one parent – in most cases the mother – gives up their job or cuts down on their working hours. The only compensation received is child allowances of at least 200 francs per month, or 250 francs for children of school age. 

Save on baby equipment

Should young couples be worried about all these expenses? “Of course not,” emphasize René Knoblauch, Head of UBS Financial Planning, Zurich and Central Switzerland, and Thomas Estermann, Financial Planner at UBS Zurich, in unison: “We advise future parents to draw up a budget. Depending on their situation, they can make savings in specific areas.” That’s particularly easy when it comes to first purchases for their little one. Friends and relatives often offer to pass on a cot, a stroller or used clothing – and no baby has ever complained about not having brand new things.

“Once the baby is born, it also makes sense to regularly set aside a certain sum,” explains Knoblauch. If you pay 100 francs into a fund savings plan each month with a – conservatively estimated – one percent rate of return, the fund savings will amount to almost 24,000 francs after 18 years.

A tidy sum that could come in very useful for financing the child’s studies, for example.

Financial tips for parents

  1. Opt for second hand. The younger the children, the fewer demands they have. So you shouldn't feel guilty about giving your baby second-hand clothes or used baby equipment.
  2. Cheap works out costly. Children need a balanced diet in order to develop properly. This can save you money on doctor’s and dentist’s bills, which is why you can't afford to compromise on the quality of the food you buy.
  3. Better safe than sorry. It is advisable for families to check their insurance coverage in the event of death and disability.
  4. Things happen at inconvenient times. Having children might not only mean that you need to move into a bigger apartment, but it will also force you to take your vacation during high season. Choosing destinations that don’t involve long-haul flights results in significant savings – and will keep your children from getting bored on the plane.
  5. Save with a plan. A child's education represents the single largest budget item. That's why it’s worth starting to save up as soon as they’re born – preferably with a fund savings plan.

Budget calculator

Maintain a healthy balance between your income and your spending so you can put some money aside regularly.