What-expenses-to-cut

(27-06-2016, 09:49 AM)funman168 Wrote: Below are the expenses that one will most probably hv to plan for after having a kid
Kids expenses - $1.5k/mth
maid - $1k/mth
car - $1k/mth
KidEducation saving - $1k/mth

So for anyone without the "extra" disposable income of $4.5K, forget about having a kid?  

Are the maid and car, necessities for kid? Kid expenses of 1.5K/month? I didn't spend that much myself, excluding mortgages/insurances/taxes?   

(Parent of a preschool kid)

I wouldn't classify full loaded cost of the maid and car on the kid since most likely the parents are benefiting from it. 1.5K for kids expenses seems on high side. In that case most likely parents have income that can afford.

If you have 2 kids and want them to do well in school, 1.5k is not far off- 400 each for enrichment (the going rate for 1 to 1 tuition per subject is about 200//month), 300 each for pocket money and weekly food expenses. Personal experience is that I know of parents who are paying 210-240/mth for their sec 1 kid per subject and we all know at that level, they study at least 6 subjects.

As for saving for children education, you can reduce it. Probably why you need to save 1k per month is due to investing it in a lousy product (e.g. Endowment plans), if you are a decent/index investor, the amount can be reduced

Before having children, there must be a couple who
have decided to spend their lives together, as long
as they can.

Babies are the product of love. Hopefully intense,
with wild abandon and the condom was no where to be found.

Love is unplanned.( otherwise known here as black swans?)

Adjustments will have to be made to accommodate the arrival
of babies. Stop smoking, stop alcohol, stop partying
reduce golf, stop gaming.

If there is a conscious effort to prevent having babies
then I believe the relationship may experience an emptiness.
Women beyond the age of 45 will not be biologically fertile
with real dangers of malformation of babies.

(27-06-2016, 10:41 AM)Porkbelly Wrote: Before having children, there must be a couple who
have decided to spend their lives together, as long
as they can.

Babies are the product of love. Hopefully intense,
with wild abandon and the condom was no where to be found.

Love is unplanned.( otherwise known here as black swans?)

Adjustments will have to be made to accommodate the arrival
of babies. Stop smoking, stop alcohol, stop partying
reduce golf, stop gaming.

If there is a conscious effort to prevent having babies
then I believe the relationship may experience an emptiness.
Women beyond the age of 45 will not be biologically fertile
with real dangers of malformation of babies.

only thing i can add is from 36y/o onwards for women the risk of genetic problems like the common Down Syndrome is much increased

[By age 35, a woman's risk of conceiving a child with Down syndrome is about 1 in 350. By age 40, the risk is about 1 in 100, and by age 45, the risk is about 1 in 30. However, most children with Down syndrome are born to women under age 35 because younger women have far more babies.] - Mayo Clinic

As long as a couple is willingly to work till they hand-in IC, finding the additional $4.5k to raise kid shld nt be an issue. Conclusion is once have kids can forget abt retirement.

(27-06-2016, 01:38 PM)funman168 Wrote: As long as a couple is willingly to work till they hand-in IC, finding the additional $4.5k to raise kid shld nt be an issue. Conclusion is once have kids can forget abt retirement.

I think is very dependent on income. If both earn says 7K ... total 14k. Easy to support 4.5k. Can have condo and car some more.
If wife not working ... that's 7k only. That's quite bare minimum even without car and condo.

Why do people need a condo in the first place?
A car, I can understand, a condo is something I dont quite get.
For one you get more privacy, which I think is great but affordable condos are often located in far flung places away from amenities.
Given a choice I would very much like to stay in a HDB in Tiong Bahru rather than say Punggol if I work near town. (of course there are condos in Tiong Bahru, but they usually cost 2M up)

Also earning 7K per person is not as easy as it sounds. It maybe quite achievable if one has got a university education and maybe work experience but for a lot of other people who dont, it is difficult. I dont get 7K a month constantly even after working a good 20+ years and I have seen many others that work extremely hard but don't earn half as much.

(ok, to be fair, I cant be really considered employed. but that does not change anything as money is really hard to come by nowadays)

PS apologize for the typo of 'you people', was trying to make a general statement not directed at anyone. Amended.

Understand. The context of the message is about spending 4.5K on a kid. The condo and the income is to build up on affordability.
Is not whether we should have a condo or 7K is a norm. Obviously is not considering median income is 4K and more than 80% of us in HDB.

(27-06-2016, 06:26 PM)Big Toe Wrote: Why do you people need a condo in the first place?
A car, I can understand, a condo is something I dont quite get.
For one you get more privacy, which I think is great but affordable condos are often located in far flung places away from amenities.
Given a choice I would very much like to stay in a HDB in Tiong Bahru rather than say Punggol if I work near town. (of course there are condos in Tiong Bahru, but they usually cost 2M up)

Also earning 7K per person is not as easy as it sounds. It maybe quite achievable if one has got a university education and maybe work experience but for a lot of other people who dont, it is difficult. I dont get 7K a month constantly even after working a good 20+ years and I have seen many others that work extremely hard but don't earn half as much.

(ok, to be fair, I cant be really considered employed. but that does not change anything as money is really hard to come by nowadays)

I believe the underlying idea is to treat it as a forced savings account that automatically invests in a property. Most condo dwelling couples I spoke to basically adopt the idea of putting aside a few thousand dollars each month as savings to pay down their mortgage and intend to either rent out or sell off the condominium upon retirement to supplement their retirement.

Personally, I don't think it's that bad of a deal. While property isn't as risk free as most of them believe, the financial illiterate could do worse pursing other dubious forms of investment (and that includes "playing" the stock market). 

The 3 pieces of advice I usually give such couples:

1) In your 40 years of working, there is a very high chance that one, if not both of you, will be unemployed for some time. Build that into your calculations.

2) The good old days of properties appreciating on a compounded rate of 7% - 9% p.a. in the past is unlikely to be repeated. Be conservative and do your calculations on more realistic assumptions of 3% - 5%.

3) Unless your finances improve dramatically, do not take on more debt half way through to upgrade your dwelling.