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I agree. It seems like the cost can vary from not that much to very expensive - it just depends on the situation.
For myself - relatively healthy, went to a small town public school, rode the school bus to grandmother's house, wore some hand-me-downs (maybe $250 worth of new clothes every year), received about $300-400/yr worth of toys/sports fees/equipment and didn't eat a lot (healthy weight, breakfast/lunch at school with parents making relatively modest dinners).
If you have no grandmother, no hand me downs, the child is active in extracurricular activities (which are a necessity by now) and eat well/healthy - add that to the bill.
I think the largest consideration for the first two years or so is day care. Day care in our area would run us $10K for the year. However, I work day time hours and my partner switched her schedule to nights only, so we don't use day care. She also makes more money working nights, plus the tax credits and we are actually ahead of the game. Also, I breastfeed, so no expensive formula here, diapers are $30/month - I don't consider that expensive. Other incidentals maybe another $20/month. The only place we really got hit was insurance. Adding the baby to my insurance is $240 a month extra (pre-tax). However, with being able to claim head of household rather than single, my paycheck is actually higher.
I learned from the way my parents raised me that money doesn't equal a happy childhood. I plan to spend time with my daughter and not money on unnecessary things. I think life experiences are worth much more than materialistic things.
Anyway, the answer to your question is yes and no depending on the situation.
What I don't understand is that for some people like myself, having a child was never a questions, so it costs what it costs and I don't spend time really adding it all together. For other people, having a child was never an option for their own sets of reasons, and that's fine. Cost of a child is never a consideration for having them, at least in my experience. I doubt people sit there and say, OK, well we're $200 a month short of what I predict my expenses will be with a child, so let's forget that and live child free.
I watched my sister raise my niece and I have to say its the (discretionary) spending that's expensive. She bought diapers, formula, fancy crib, build a bears etc and it cost her a ton to do so. She also insisted on buying the cutest designer cloths for her. My friend however used cloth diapers and breastfed, her family also gave her a crib and toys...her out of pocket was probably far close to the tax credit amount.
The daycare battle is the one that sets most people back when they complain about costs. It really is insane what they charge, I need to open one. You can charge more for one kid than you can charge a tenant in rent in my area!
Also bear in mind that the tax credit caps at a certain income and only applies to a certain amount of kids. Id have to google it but haven't had my coffee yet. So you cant just keep racking up credits with 8 kids. Fun fact this is a good chunk of Mitts 47% figure, a lot of families get refunds due to this credit in particular.
Babies are the cheapest. Besides a small startup cost in equipment they only cost for care (which is very expensive in a centre, but same as for any age if its a parent). It's when they grow and start sleeping in a separate room and eating and wearing shoes that the money starts piling up.
Quote:
Originally Posted by eddiehaskell
It seems that if one has a parent/aunt/stay at home mom friend to take care of childcare (years 0-4) - raising a child can be downright cheap (assuming no major health issues).
Am I missing something?
I don't know anyone who has a grandparent do anything other than very part time care, the equivalent of a day a week. If your SAHM friend has your kids 50 hours a week you'd better be paying her $750 a week or she won't be your friend for long.
The opportunity cost of having a parent stay home with the kids is just as big as the cost of care. And the need for care doesn't stop when they start school. Afterschool care here starts at $600 a month, and the very cheapest summer care is about $1600 a month. That cost continues until they're maybe 12? But I doubt many people would leave a 12 year old home alone all day all summer.
The other major expense is basic living expenses - food and housing. About $50 a week extra in food per younger child, and hundreds if not thousands a month in housing, with the cost increasing dramatically as you go from 2 to 3 bedrooms (opposite gendered kids can't share a room). You can find a one bedroom around here for $1-1500 a month, but a 3-bed is $2500+.
Clothes, transport, utilities aren't a massive cost, but they are a cost.
So, for school age two kids who aren't teenagers it's about $37,600 a year just for food, housing and care. Not including clothes, water or electricity, activities and equipment for activities, a car which can fit people in the back (a larger sedan), fuel to drive more places, extra airfares or admission tickets or restaurant meals.
Clothes I think I spend about $200 per child twice a year on average. Summer they get a new pair of sandals, bathers, hat (if needed), plus whatever clothes they didn't get handed down, maybe a new bike helmet. Winter is of course more expensive, but I often get two years out of a coat and snowpants. They need two pairs of shoes in winter (sneakers and snow boots).
For organised activities the sky's the limit. Including second hand equipment (like a judo uniform or skates or soccer shoes) an average activity is about $80-100 a month. Music or horseriding lessons are at least twice that (never looked seriously, can't afford it). Swimming lessons are about $50 a month.
Transport, maybe our car was $10,000 more than our last (tiny) car? So it adds maybe $1000 a year over its lifetime? And of course bigger car uses more petrol, plus more people means more trips.
Last edited by WildColonialGirl; 08-14-2014 at 07:08 AM..
I agree that it is hard to put a figure on raising a child... I'm not going to pretend I can sum up the complexity of families lives into a single number. It would be hard pressed to find a family who will honestly say it was easy and inexpensive.
I did prepare for the expense of raising our first child BUT it was more expensive than I had anticipated... and of course it doesn't end until they are adults There are a lot of little things you miss or don't realize... There are a lot "big" surprises too... Things you can't possibly plan for. Going into our second child, we again tried to plan ahead. We waited till our first was in 2nd grade as daycare here is well over $1000 per child per month. We waited to have things settle a bit and our first to be a bit more independent. We waited for a bit more savings and focused on positioning myself career wise. Heck, we were already "seasoned" parents so we knew what we were getting into. Well... we ended up having twins. Twins with medical issues. Our expenses blew up! Income went down because my wife had to stay home so we lost her income.
Some of the things we missed or under estimated.
* How much funding activities for my older son costs. I did factor it in but not enough. All great life growing activities but they cost a lot of money. After school activities/care and tutoring. Summer time activities. Idle children is a bad thing.
* Shoes. I don't know about girls but my son's go through shoes quick. Young ones $35. Older son is $50. For clothing we were lucky... lots of donations from families in the neighborhood for the babies. Grandparents paid for a lot of my older son's clothing through gifts. I can see clothing being a underestimated expensed otherwise.
* Food. We adjusted fairly quickly from going to the local A&P (down the street) to a combination of Shoprite/Aldi/Costco. We had planned for 2 restaurant dinners a week. We are now at maybe 1 a month. When the cost of food rises, we know it.
* Formula. Medical prescribed formula cost us $10k last year. We have new insurance with a job change which has coverage now. So this year is much better.
* Doctor visit co-pays. We forgot that one!
* Our car was too small. We hadn't planned on replacing our econobox so early. With that cost of gas for the larger vehicle also went up. Even if we didn't have twins, I didn't realize how much space a stroller, car seat, diaper bag, and extra clothing take up. Yeh it fits but then we didn't account for the space needed if we went out as a family to shop for necessities and groceries.
* Utilities: Water especially. Laundry is done daily now instead of weekly.
* We had planned for family vacations. We decided that was one thing we can do without. Instead we did day trips.
* Time. Without kids, Husband and Wife can split up the chores and errands. Do things in parallel. With kids, someone always has to be with the children. Things either never get priority or be more efficient. This generally means hiring someone (repairs on house) or buying something (Dishes are now done by dishwasher which wasn't oprational when we purchased the house).
I'm sure I am missing some.. we did ok (so far) with savings and my salary (wife is not working yet). But heck yeh... children are expensive. I'm only just getting into it too. From my talks with other families with older children, it seems it costs for food/clothing/activites simply go up very quickly.
From my observation, the major difference between families that cope better than others on an emotional and financial standpoint is whether or not a support structure exists. Grandparents for example taking care of children is a HUGE benefit. Extended families help with things around the house. A young coworker of mine (single parent with two children.. yes.. not the best choices but that's a different discussion) was coping just fine. He would even go out on dates and party. I was surprised (to a certain extend jealous). He said that it is his families' "tradition" that the grandparents are in charge of raising the young and cook while the middle aged adults bring in income. In return the grandparents are taken care of financially and costs of living are shared. This cycle has been going on for generations... seems to work well as long as they stick close.
In almost every case I have seen, a married couple without children are always much better prepared for retirement and savings than ones with children.
PS> Flexible spending limits suck! Limits that are legislated (childcare tax credit including) like that should not be hard values but take into account the cost of the region.
Also
My parents immigrated to NY-Brooklyn back in the early 70s. They said that my daycare at that time was subsidized and thus relatively affordable. They can't recall the specifics... is that still around?
The tax credits on a refund parents get at the end of a year does not make up for or equal to the amount of money spent on a weekly or monthly basis in child-related expenses. Regular day care alone can be up to over $12,000 a year. And I'm not talking fancy day cares, but just regular day care to send your children to so that you can go to work every day to support them and yourself. The difference in the cost between getting health insurance for a single person versus one parent plus a dependent or a parent and a family is hundreds of dollars a month, which can cost $5,000 a year or more. Day care and health insurance costs alone easily add up almost $20,000 a year or more. That is a whole salary for a lot of people.
This doesn't include the cost of food, housing (having to have a large home or apartment versus a one bedroom or studio for a single person or couple), school related costs (yes kids in public school still have school related costs) and other expenses. Then there's college.
This. And that's if you have a healthy child. I have one with autism, as well as chronic medical problems. No one can truly budget for that.
I have 2 kids who live here most of the time and 1 child who lives here on weekends. We do not buy a lot of toys and electronics. We do buy a fair number of books.
I pay about $12000 per year in Texas for after-school care forthe 5 and 8 year olds and all-day care during summer and breaks.
The difference in employee + spouse and employee + spouse +children for health insurance premiums was $840/year at my last job. This is something most people don't take into consideration.
My son needed eye surgery and tubes in his ears last year - that added up to over 2k out of pocket. This year he needed tubes AGAIN, so another $800. Add that to the cost of the glasses ($100-$400/year depending on whether the prescription changes, his head grows, or they get broken) and the oldest child's orthodontic treatment to correct a jaw placement issue ($1000 last year, $1000 this year, I expect to have to do braces for her next year).
The youngest has extra-wide feet, so must buy special shoes that cost at minimum $50 per pair. He outgrows them every few months, I try to make sure he has 2 pairs at a time, so that's $400-$600/yr. We get hand-me-down clothes for him from my nephew, so his clothes cost is small. The other two aren't growing as fast, so they don't need new clothes and shoes as often. However, oldest is now wearing adult sizes, with the corresponding price increase.
The oldest (age 8) is almost as tall as I am...and she eats as much as I do. Grocery bill is about $75/week when the kids aren't home, and about $150/week when they are = $4k/year. Youngest can drink a full half-gallon of milk all by himself every week. I'm hoping to plant a garden next year to keep middle child in tomatoes. If we choose to eat out, the bill is twice as high with all the kids than with just the two of us.
I had to sell my car (a paid-off, 4-year-old sports car) and buy a bigger one that a car seat could safely fit in when the first child was born. That was a big initial expense.
I own a house that is twice as big as what I would have if I didn't have children.
I pay an extra $100/year for the family membership at the gym versus the individual membership. I allow the kids to do 1-2 extracurriculars each; that's about $60/kid for swim lessons a year, and $300-600 per child for whichever other activity they choose. Then there is the gas to get them back and forth, and the increased food costs if I dont have time to cook.
School supplies are generally $100-$200/year per kid (including all the stuff we have to bring per class party).
Without housing and transportation costs, this is easily 20k per year in expenses now that I would not have if I didn't have 3 kids. With housing it would be $25k or more.
Breast-feeding is cheaper in dollar-terms and typically has other benefits as well. It only goes on for so long however. Cloth and disposable diapers cost about the same unless you wash all the diapers yourself. That will be expensive and time-consuming. Daycare is expensive whether you pay someone else to do it or give up an income so you can do it yourself. Public school is of course free. Home-schooling is not.
Not so.
Cloth is significantly cheaper than disposable diapers. Even if you pay $20 a diaper which is expensive up front, it works out much cheaper than disposables through the time they potty train, and moreso if you use them for second and third children etc.
I paid $3-4 a diaper from eBay (brand new), spending under $100 for the initial outlay. My laundry load increased by only 2 diaper loads a week. It was neither expensive, or time consuming (a couple minutes to toss the diapers in and set the cycle, and a few minutes afterward to hang them on a drying rack or outside if it was warm and sunny).
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