Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life's money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to moneycoach@timesofmalta.com
Dear Luca,
I’m a 32-year-old lawyer. My wife is a notary. We both earn decent salaries, and we have good reason to believe our incomes will grow over the next few years. The only loans we have are our home loan, and my wife still has three years of payments left on her car loan.
We’re expecting our first child in a few months, and I won’t lie - we’re beyond excited! We’ve already started shopping for baby essentials, and we’re making sure our little one has everything he needs (yes, it’s a boy).
I recently watched your video where you mentioned that it costs €10,000 from the moment you find out you’re pregnant until the child’s first birthday. I have to admit, that number caught me off guard. It’s not that we can’t afford it—thankfully, we’re doing fine financially - but I couldn’t help wondering how much it will continue to cost after that first year. And the thing is, we’ve always wished for a big family: three children have always been our dream.
So, I’ve got two questions for you:
- Is it crazy to even think about having three children in today’s expensive world?
- How can I plan better to make sure we’re not caught off guard financially?
Best regards,
Expectant Father
Luca responds:
Dear Expectant Father,
You are right to be a bit concerned. I was also surprised at the costs one needs when children are involved (I have two young children myself).
The €10,000 estimate might seem high to some, but let me give you a peek at how these expenses typically add up:
These costs can vary from family to family, and while this gives a general overview, it's important to remember that unexpected expenses can arise.
Of course, there are ways to lower this amount. You could rely solely on the public health service for your child’s doctor visits. You could go without a nursery or some of the other items on this list. If you wish to really push it a step further, buying second-hand items helps as well. Remember, the €10,000 price tag is an average. It can be lower, and higher as well.
Now, to answer your questions:
No, it’s not crazy to think of having three children in today’s world, especially if you love a big family! It’s key to forecast these costs and adjust your spending month by month. Remember also that having three children doesn’t mean that you have to go through the process of buying exactly what you bought for your first child, as most of the items can be re-used.
You can also prepare by looking into childcare options. For example, while the Free Childcare Scheme in Malta covers children up to 3 years old for working parents, private childcare costs range from €300 to €700 per month, and after-school programmes for older children cost between €3 and €6 per hour. Babysitting or nannies could cost anywhere between €8 and €12 per hour.
In terms of planning, you can start by calculating your current monthly income and allocating a portion to family-related expenses. Breaking down the costs over time can prevent surprises. I also encourage you to explore Malta's child benefits, including the €1,000 per child born, as well as children's allowances paid every three months.
And while we're on the subject, it’s worth noting that maternity leave policies in Malta could certainly be improved. Compared to other countries, we're still behind in terms of providing sufficient support. Hopefully, this is something the government can address to ensure a more sustainable and family-friendly approach.
I hope I have answered your concerns and given you the reassurance that, with the right planning, you can comfortably manage the financial aspects of growing your family. But beyond all the financial considerations, I can tell you from experience that being a parent is the most rewarding feeling you can ever experience.
Wishing you the best of luck on this exciting journey!
Luca is the founder of the Money Coaching Hub. Email him your financial questions or your response to today's question for a chance to be featured in a future column.
Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.