Terrie's Job Tips -- The High Cost of Kids

It's been said that one of the major reasons Japanese couples don't have more children is because of the costs involved in raising children. With the average employee's monthly income in July last year being around JPY386,000, there isn't a lot of discretionary spending going on after the costs of rent, food, and travel are counted. In particular, there isn't really enough to warrant the cost of JPY23.7m, or a bit over JPY1m per year, that it costs for each extra child present in the family.

This number of JPY23.7m comes from a survey done by the Cabinet Office back in 2006, and includes the costs of education – particularly the high costs of cram school and other related extracurricular activities. It is easy to see why there are not many 3-child families in Japan – there'd be nothing left over to pay the rent!

Predicated for the average Japanese family, this cost of raising kids is surprisingly not so different to that for the US, which is commonly quoted as being around US$160,000 for each child up to the age of 18. My observation is that what is different is the component costs. Whereas in the US, health care, transport, and entertainment are probably major cost considerations, here in Japan, it is the cost of housing, food, and cram school that use up the budget.

Housing in particular is something to watch. Many couples take a 1DK size apartment downtown when they first get married, then after a few years find themselves with little or no quiet space once the third member of the family makes their appearance. They thereupon embark on a search for a 2DK and find that being within 20 minutes of downtown can add JPY100K a month to the rent costs. The net result is that the new family is forced to resettle further out of town, thus reducing the amount of time Dad can spend with the children and the quality of life. Further, if you have two or more kids, then you also need to find a landlord who will even allow a larger family into the apartment in the first place.

Foreigners living in Japan and married to a Japanese spouse currently still have the legal right to send their kids to an international school rather than a Japanese one – although this may not be the case for much longer. While it's great to be able to have such choice, the cost of education in English (or some other native language apart from Japanese) becomes a serious consideration in working out the cost of having kids.

Whether your child is attending the first year of kindergarten or is about to graduate from Year 12, the typical cost per year per child at an international school is around JPY2.5m per year – not including ski trips and other frivolities! Luckily there are several new schools charging about half this rate – but even then, international schools cost at least ten times that of regular Japanese schools. The only really difference is that internationally schooled kids are less likely to be attending a cram school – which can cost another JPY20K or more per month.

If you're a fully expat family, then you don't really have much choice if you are not expecting to stay in Japan much longer than 3 years. Your kids will need to go to an International school, so as to reduce any interruption to their overall education. Also, because of the temporary nature of your stay, you will probably find it difficult for the family to change their lifestyle as well. This will mean that the kids will expect to get transported around – requiring a car, and that they will want to socialize after school with their friends, which will probably entail signing up for a social club such as the Tokyo American Club or Yokohama Country Club. This is also a costly exercise, typically requiring membership fees of several million yen, and yearly/monthly usage fees on top of that.

Because of the overall high cost of having and keeping kids in Japan, unless you want them to live a typical Japanese kid's life, I often advise fathers of young families to either consider leaving the family back in the home country for the duration of the assignment – a very tough decision, or to at least not bring them over for the first 12 months, so that at least Dad has time to figure out how to integrate the kids into the Japanese education and social structure without splitting the family apart.

The fact is that if you're not on a high-level expat salary, you will find that the costs of school, food, and transport may put taking on an assignment in Japan with your kids also present, out of your reach.