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28 March 2024

Million-dirham baby: cost of raising a child in UAE

Dh1million to see your child get from the cradle to university. (SUPPLIED)

Published
By Joseph George

The cost of bringing up a child in the UAE is possibly at an all-time high. According to Emirates24|7 calculations, parents in the UAE will need to spend between Dh1.26million and Dh2.52million on an average to raise a child up to the age of 18. About 40 to 50 per cent of that amount is comprised of school education alone.

Imagine having to spend a whopping million dirhams to see your child get from the cradle through to university!

And that is by the least average standards and going by the current average schooling, housing and maintenance expenses.

If one takes into account an annual inflation rate of between 8 to 10 per cent for the next 10 years (2008 inflation rate in the UAE was 15.8 per cent, according to Central Intelligence Agency), that figure could easily double for a just-born child today until s/he attains maturity.

Blame it on recession or inflation, or other obscure external factors, but the increased cost of living now stands to threaten your very dream for your children, unless, of course, you are ready to burn a big hole in your pocket.

If education fees are humongous, house rents follow suit and you still need to fund the support system.

On an average, an expatriate family spends about Dh50,000 per annum only on accommodation, annual home-country visits and household-help expenses.

The cost of education in the UAE ranges between Dh11,340 and Dh39,640 per year in a private school offering CBSC syllabus and can go upto Dh65,270 per annum in American schools. This is minus the cost of private tuitions, extra-curricular activities, transportation, uniform, etc.

These statistics covers a child's expenses upto 18 years or alternatively up to Grade 12.

In fact, many parents support their children well into their 20s for higher studies.

Now as your child grows up and would want a space of his own, you stand to shell out even more. A decent home in a good suburb anywhere in the Emirates will come with a price tag.

Nitu Singh from India says: “After having my first child in 2009 we moved from a one-bedroom apartment to a two-bedroom flat in Bur Dubai, paying an additional rent of Dh20,000 per annum. Hiring a maid in the UAE is another major expense. Her visa, salary, everyday spend and annual ticket would easily total to about Dh2,000 to Dh2,200 per month that is a cool Dh24,000 to Dh26,400 per annum.”

And pray that you do not fall sick! Medical insurances come with varied conditions. You would be lucky to own one that covers all  streams. If your card does not cover maternity and gynaecological costs, be prepared to add few more zeroes to your child's budget. It could be anywhere between Dh15,000 and Dh25,000 during the first year and an additional Dh2,500 annually for the remaining years if your family is not covered under medical insurance here," said Edward C who works in an educational institute in Dubai.

“Majority of my friends hold insurance cards that do not cover maternity. Two of them had to travel to India for delivery to avoid the high cost here,” he added.

Nisha Varghese says: “I used to earn only about Dh4,500 per month. I had to quit my job to travel to India for delivery. Now my baby is a year old and I am in a position to go back to work, leaving the baby with a babysitter.”

However, she says it was a good decision to deliver during the downturn.

“There has been hardly any promotions, salary hikes or bonuses in the last 12 to 18 months. I am glad I took a break; I could take care of my baby, rather than slog uselessly for my employer.”

"During the first 12 months since I became a mother I have seen the monthly expense double. I spend almost Dh200 every month on diapers alone,” says Varghese. “Starting from baby food to vaccinations, everything is an added expense. It is difficult to manage here unless the total monthly income is a minimum Dh18,000, provided you do not have other loans,” she reasons.

According to the survey conducted by insurance and investment group LV parents have cut down on holidays and family days out because of the economic downturn, many have slashed the amount spent on clothes, with
some buying clothes second hand.

Seven out of 10 families said they have started buying food from cheaper, 'value' ranges or switched to a lower-cost supermarket.

UAE residents can take heart in the fact that the trend is somewaht similar across the world. According to a recent report, the cost of raising a child in Canada is between $170,000 (Dh624,325)to more than $250,000 – and that’s just to get them to the age of majority, factoring in merely the bare basics required to rear a child.

In August, the US Department of Agriculture released its annual report on how much it will cost to raise a child and the amount stood at $221,190.

The figure would increase to $291,570 when adjusted for inflation. The figure is for a child born in 2008 and it is how much a parent could expect to pay for food, shelter and other necessities for the next 17 years.

A survey published earlier this year in UK estimates that the cost of raising a child has gone beyond £200,000 (Dh1,177,083).

Childcare remains the biggest single expenditure at £55,000 on nursery fees, after-school clubs and holiday clubs followed by £52,881 in university fees and school costs until the age of 21. It doesn't include private school fees. Parents spend £9,000 in the first year of raising a child, the survey found.

The cost of raising a child

                                  UK Pound                        UAE AED

Expenditure          Dec 2009 costs            Oct 2010

Childcare                 54,696                         26,600 - 104,278

Education                52,881                          121,590 - 641,106

Rent                              -                                   510,000 - 1,020,000

Food                         17,490                            61,200

Clothing                    14,035                            34,000 - 85,000

Holidays                    13,207                            29,750 - 68,000

Babysitting                 11,003                           306,000 - 408,000

Hobbies & Toys         10,780                            102,000

Leisure &                      7,7772                            17,000

Recreation

Pocket money               4,338                              10,200

Furniture                         2,770                               4,250

Personal                         1,107                                3,500

Other                                 11,731                            8500 - 24000

(includes driving

lessons, first car,

birthday and festivals

presents)