Insurance Groups Predict Costs of R3.5 million to Raise a Child

February 22 - Middle and higher income parents need to brace themselves for some staggering costs, according to research commissioned by four of South Africa's insurance groups.

Figures released by Sanlam, Old Mutual, Discovery Health and Metropolitan Life show that it will cost South African parents around R3.5 million to feed, educate, house and mind a child from birth to 18 years of age.

Those who earn lower incomes may not have to spend as much, but they are certainly not far behind.

The research showed that a family that earned a combined salary of R100K needs to spend R1,400 a month in investments if they want to cover their child's education from kindergarten to university.

Those who earn R500,000 a year will spend around R2.5 million to raise their children.

And, according to Tony Twine, an economist, those who earn R2 million a year can expect to pay a lot more.

"The higher the income, the higher the expenses," he said.

A director of financial advisory consultancy, Asogan Naicker said: "It's the biggest tragedy when we see parents earning a combined income of more than R100,000 a month struggling to set aside R5,000 for school fees."

"They have created a lifestyle that has now become unaffordable, and have not taken into account the long term costs of raising children."

Other interesting facts found in the report:

• Parents will pay R87,000 at government schools and R390,000 at private schools.
• Saving R1,500 a month will fund a child's entire school education in a government school, while R7,100 a month will pay for private education.
• Children will cost their parents around R300,000 in medical bills.