Sunday 18 February 2018

The €16,000 bill you could face when your child turns eighteen

Once your baby becomes a toddler, flights usually become more expensive. At Aer Lingus you must pay an adult fare for children aged two or more.
Once your baby becomes a toddler, flights usually become more expensive. At Aer Lingus you must pay an adult fare for children aged two or more.
Louise McBride

Louise McBride

Parents of children about to turn 18 should brace themselves for a major financial shock - it could cost almost €16,000 a year more to look after a child once they become an adult.

So what financial hits can you expect once your child has blown out the 18 candles on their birthday cake - and how might you manage them?

College bills €11,000 hit

No doubt the biggest financial shock is the college bills - should your child be pursuing a third-level education. It costs at least €11,000 a year - spread out over nine months - for a child to go to college if they are studying away from home, according to the Dublin Institute of Technology (DIT).

That €11,000 bill -which will be higher if the student is paying rent in Dublin - includes rent, bills, food, travel, books, clothes, mobile phone, social life, and the student contribution charge.

Should your child be living at home while at college, you can knock about €4,000 a year off that bill, according to DIT. The best way to prepare for the dreaded college bill is to start saving for it when your child is young.

Child Benefit €1,620 hit

At €135 a month, child benefit could cover half - if not all - of your teenager's pocket money. Or it might be the only reason you can afford their expensive taste in clothes.

You are entitled to child benefit until your child turns 16 - or if your child is in full-time education, until they turn 18. Child benefit is €1,620 a year per child.

Private Health Insurance €700 hit

The cost of keeping your child on your private health insurance plan could more than triple once they turn 18. The blow might not be as severe if your child is going to college and therefore entitled to student rates, but all the same, private health cover for a student will easily be a couple of hundred euro more expensive a year than it is for a child.

GloHealth's Net Most 100 plan for example typically costs €280 a year per child but once that child turns 18, the adult rate of €975 kicks in - almost €700 more. Should your child be a student, it will cost €487.50 to cover them on that plan.

Furthermore, you don't get student discounts on some health insurance plans.

Car Insurance €3,000 hit (Plus once-off €3,000 bill for the car)

Many 18-year-olds will be eager to get behind the wheel of a car - particularly if they live in a rural area with poor public transport links.

Unless you're willing to share your own car or your child has already managed to save a nest egg (out of money they probably already received from your good self), you'll need about €2,000 or €3,000 to buy your 18-year-old a cheap second-hand car. Throw in 10 driving lessons, and you can add €300 to the bill. Then comes insurance, which could cost between €2,000 and €3,000 a year -if your child can get a quote.

The Earlier Hits

There are a raft of financial perks you have to kiss goodbye to long before your child turns 18.

Once your baby becomes a toddler, flights usually become more expensive. At Aer Lingus you must pay an adult fare for children aged two or more.

Travel agents often offer holiday deals where children can stay in hotels for free - but you usually can't get these for children over 16. Ferry companies usually have special offers where children can travel for free - but again, should your child be 16 or older, you're unlikely to get these offers. For example, last February, Irish Ferries announced an offer where children up to the age of 15 could travel for free on board its sailings to Britain until May 21. Without that offer, an adult travelling with a child from Dublin to Holyhead return this April could pay about €50 more for their tickets.

Trips to the cinema also get more expensive once your child turns 12. Train and bus cash fares cost more once your child turns 16.

Managing The Hits

A growing number of adult children are living at home well into their 30s. So the sooner you start to manage the financial hit of having an adult child at home, the better. Charging board is one way to do so.

"How much board they pay should be a function of how much they earn - that is, they should pay less if they are working part-time or in full-time education," said parenting expert, John Sharry of "The amount of board paid is really a personal decision for their parents and depends on their own financial situation and how much they want to install responsibility in their adult children. Sometimes parents are happy to supplement their children living at home short-term as the child is saving for a deposit on their own place and so on."

John McGuire, who presented the RTE Two show, I'm An Adult, Get Me Out of Here, believes that adult children should pay board for two reasons. "First, to make sure there isn't too much pressure on the household budget and second, to prepare the child for the next stage in life," said Mr McGuire.

"By paying rent to their parents by standing order for example, the child will be able to show a bank that they've the discipline to save - which should make it easier for them to get a mortgage. I don't think anyone does anyone any favours by giving someone an easy ride."

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