The Cost of Raising a Child in the UAE (2024): A Financial Guide for Expat Families
Raising a child in the UAE is an incredible experience, but it comes with significant financial responsibilities, particularly for expat families who do not benefit from government subsidies. From education to healthcare, childcare and housing, the costs quickly add up. Here’s an in-depth look at the estimated costs of raising a child from birth to age 18, as of 2024, and strategies to manage these expenses.
Total Estimated Cost of Raising a Child
The average cost of raising a child in the UAE varies depending on lifestyle choices, school selection, and healthcare needs. On average, families can expect to spend between AED 900,000 to AED 1.8 million over 18 years. Education, healthcare and housing are the largest expenses, but additional costs like travel, extracurricular activities and childcare also add significant weight to the budget.
Breakdown of Key Expenses
1. Education: Education is the single largest expense for many families in the UAE. Private school fees vary widely, with total costs ranging from approx. AED 350,000 to over AED 800,000 from primary through secondary school.
2. Healthcare: Although insurance is mandatory for employers to provide, families should plan for out-of-pocket healthcare expenses. The average family spends AED 60,000 to AED 100,000 over 18 years, covering costs like specialist visits, vaccinations and dental and optical care.
3. Housing: Families often need larger accommodations as their children grow. Over 18 years, housing costs can add up to an additional AED 200,000–300,000. On average, housing expenses take up 25 to 30% of the family’s income.
4. Food: Food costs also increase as children grow. Parents can expect to spend between AED 500 to AED 1,000 per month on each child, depending on age and dietary needs.
5. Childcare & Extracurricular Activities: Childcare, including nursery and day-care, as well as extracurricular activities, typically range between AED 50,000 and AED 100,000 over the child’s development.
6. Clothing, Toys and Necessities: An often overlooked but necessary category is clothing and general needs, which can cost AED 10,000 to AED 20,000 annually.
Variations in Costs by Region
Costs differ significantly between emirates. Dubai and Abu Dhabi are the most expensive for education, healthcare and housing, with school fees sometimes 20-30% higher than in Sharjah, Ras Al Khaimah or Fujairah. Families willing to live outside these major cities can find more affordable living options.
Financial Planning for Expat Families
To manage these costs, it is essential to establish a comprehensive budget early on. Set up an education fund as soon as possible, using investment options like high-interest savings accounts or ETFs to grow your savings over time. Additionally, ensure that you have an emergency fund, or as I prefer to call it, a cash cushion covering at least three to six months of living expenses to account for unexpected financial challenges.
Financial Challenges for Families in the UAE
The high cost of living, particularly education, is the most significant challenge for expat families. Rising healthcare and housing expenses also contribute to financial pressure. Without government subsidies for expats, families must rely on employer-provided benefits to help cover these rising costs.
Accounting for Travel Costs
Many expat families frequently travel to their home countries. Budgeting for one or two trips per year is important, with flights costing AED 3,000 to AED 10,000 per person, depending on the destination and time of year. Including travel expenses in your annual budget ensures there are no surprises when it’s time to book flights, especially during peak seasons. It is an area I frequently see underestimated.
The Impact of Inflation
Inflation continues to affect the cost of education, healthcare and groceries. Families should anticipate increases in these categories for 2025 and adjust their budgets accordingly to accommodate rising costs.
Housing Costs for Larger Families
Housing is one of the largest financial commitments for families. A two- to three-bedroom apartment or villa in Dubai or Abu Dhabi costs between AED 140,000 to AED 450,000 or more annually, with costs depending on the size and location. Families may need to consider living on the outskirts of cities to reduce housing costs, though this can increase commuting expenses.
Hidden and Unexpected Costs
Many parents overlook the cost of extracurricular activities, which can add up significantly in the UAE. Other often-overlooked costs include transportation (school buses), annual visa renewals, tutoring and utility bills for larger homes.
Planning for University Education
For local universities, parents should budget AED 150,000 to AED 250,000 for an undergraduate degree. International education is significantly more expensive, with tuition fees in popular destinations like the UK, US and Australia ranging from AED 80,000 to AED 200,000 annually. Investing in high-interest deposits or, even better, ETFs early on can help cover these costs when the time comes.
Raising a child in the UAE can be financially demanding, but with careful planning and a proactive approach to budgeting, it is possible to manage and plan for these costs. By working with a realistic budgeting system, starting early with education funds, considering investment options and preparing for rising expenses, families can ensure they are well-prepared financially for all their families needs. 💫
If you would like help with planning your families finances and financial future, reach out on carol@consciousfinancecoaching.com or book a call here.