How Much Does It Cost to Raise a Child?

Birth Costs

Expectant mothers require care in three main stages: 

1. Prenatal (antenatal) – check-ups, medical procedures, tests and supplements. 

2. Natal – the actual birthing process.

3. Postnatal –  birthing aftercare for mother and the baby.

The exact charges will depend on factors such as boarding classes, complications and whether you decide to go for private or governmental medical care, with the latter option naturally costing much less.

Take a look at the estimated costs for birthing and hospitalization:

The estimate costs above cover uncomplicated births with basic services. They do not include charges for additional treatments and procedures such as an epidural administration (pain-reducing medication for childbirth) . This can cost upwards of RM1,000 for private hospitals and might be unavailable at times in some government hospitals. 

With private care, you may incur additional charges for medical add-ons such as assisted delivery (vacuum or forceps), Pitocin (birth induction) and Entonox (gas to reduce labour pain) as well as laboratory and newborn nursery fees. 

Civil servants and pensioners benefit from utilising government medical care (this privilege extends to their spouses as well) as they are exempt from certain fees such as ward charges and some prenatal procedures. 

How will I pay for it?

You might have noticed that private care rates are very much on the pricey side for the average Malaysian, and the government services may not be appropriate for all even though it’s more affordable. What are your options to cover these expenses?

1. Self-payment

   If you haven’t planned for your medical expenses (or your pregnancy) and do not have insurance, you’ll most likely end up financing the birthing and hospitalization (average duration for normal birth is 1-3 days and for Caesarean birth is 3-5 days) on your own.

   Self-payment unfortunately, will quickly drain savings as medical costs are exorbitant especially for private care. Moreover, you may be required to pay a deposit which ranges from RM1,000 in most government hospitals and from RM3,500 in private hospitals.

2. Employer coverage

   While it’s good news if your company foots your medical bills, it’ll not always be there unless you plan to work for the same company for the rest of your life, or continuously seek employment with similar benefits.

   Keep in mind that the provided medical coverage may not include everything (or anything at all) in regards to pregnancy and birth-related matters such as specialist fees and newborn care. It may also be required that you pay first and make your claims later. Therefore, be sure to confirm in advance minor details like these to minimise such surprises.

3. Insurance  

   This is the best option to settle those hospital bills without going broke. For total coverage, you’ll need to buy a policy that covers all matters related to a pregnancy. However, such policies are usually purchased for the mother-to-be (or under a family coverage plan) prior to pregnancy, and not upon finding out that the woman is already with child.

   This is because most policies will not allow you to make claims (or only partially) until the end of a waiting period, typically from 8 to 12 months. These periods are actually a predetermined amount of time which insurers impose before they begin the policy's coverage, so as to minimise any abuse of their plans.

   With that said, insurance coverage does come at a pretty price as well. On average, the premiums could amount to as little as RM400 to as much as RM1,500 per annum.

What are the other costs involved?

As your child grows, so do the expenses. While it’s a joy to watch your baby take the first step and utter the first word, your finances could soon be taking another hit. Here are what family overheads for one child aged 0-6 years will look like:

1) Food and Supplies

In the initial stages, you’ll probably benefit from feeding and clothing your baby with gifts received especially if you have a strong support system around you.  But shortly after that, you’ll need to start preparing to financially care for another human being, and expenses run the gamut from clothing to playthings. Consider this list of supplies that your child will need and how much it’ll cost on average:

2) ​Child-minders / Nursery

In a time when both parents are expected to work, you’ll have to figure out who will take care of your children. In Malaysia, child-minding costs are still lower compared to countries like New Zealand, UK and the USA with couples spending a mind-blowing amount of their average wage on child-minding alone. In the UK, a third of their income is spent for the cost, whereas in New Zealand and the US, it is a quarter of their income.

In Malaysia, the average monthly fees for licensed babysitters run from RM750 to RM2,000 (depending on location), with the latter usually inclusive of teaching and educational activities. Remember to note that babysitters from outskirts and rural areas will charge less than those based in major towns and cities.

3) Comprehensive Insurance / Savings Plans

The benefits of having insurance coverage and strong savings are obvious – better education possibilities, proper medical care and a sense of financial security. You can also think of it as a method to reduce potential debt accumulation as well as interest costs. With a comprehensive insurance policy attached with riders for education, savings and medical coverage, you can limit the loans and credit needed to fund such expenses.

Conclusion

As you can see, your initial expenses from pre-natal check-ups to birth alone can consume a substantial amount of money, making some form of medical insurance for the mother and the baby a must. In addition, you’ll also need to financially brace yourself for all things uninsurable, namely child-minding and essential supplies. Getting financially prepared will put you in the perfect position to enjoy raising a family without having to worry about money constantly.