Thursday, April 24, 2008

Costs to raise a child

The other day Tight Fisted Miser mentioned it costs 200,000 to raise a kid. While he disagreed with that figure, I don’t think that number is exceptionally high.

It’s a difficult thing to calculate because there are so many variables. Plus, it’s hard to say what exactly my expenses would be if I didn’t have kids. But I’m going to give it a shot…

When I met my husband he owned a house with a $900 mortgage. Because I already had a daughter and we wanted at least one more kid we decided to buy a bigger house. Our mortgage payment is about $300 a month higher on our bigger home. So, $300 a month for 18 years is $64,000. Granted we have two kids so that is really $32,000 per kid, but we’ve already made a dent in the $200,000 and all we’ve done is provide a roof.

Food is tough. Let’s say $100 a month per kid for the first nine years and then $150 a month after that. Which would be $27,000 per kid to eat for 18 years.

Ok, so we’ve provided food and shelter. Let’s move on to clothing. I probably spend less than average on clothing. For one thing we live in a very warm climate so I don’t have to buy expensive winter clothes. Secondly, I hate clothes shopping so I do as little of it as I can. That said, I probably spend about $250 a year on clothes, per kid. Obviously as they get into the teenage years I’ll get talked into spending that just on sneakers, so let’s call it an average of $500 year. That gives us $9,000 to clothe one kid to age 18.

So far, we have spent $68,000 and have only provided the basic minimum required for human life. For the first five years someone is going to need to provide care for the child every second of every day. That is going to require daycare, or a loss of income. Either way you go it’s pretty expensive. Paying for daycare is what most people do so we’ll go with that. Around here, you could probably find a home daycare for about $125 a week, per kid for the first 5 years. Which gives us $32,500. But if your working full time you are going to need after school and summer care until they are about 12. According to the public school website in my area after school care runs $60 a week and summer care is $135 per week. You could probably find it cheaper but this is the school-sponsored program so I’m going to use these figures. That gives us another $25,000 in day care costs, for a grand total of $57,500! If that isn’t enough to make you run out and re-fill your birth control, I don’t know what is.

So, with these figures we’ve determined that food, clothing, shelter and daycare cost $125,500. But kids need more than just the bare minimum. They need toys, books, transportation, school supplies, after school activities, birthday parties, Christmas gifts, furniture in their rooms, Halloween costumes, doctor visits, hair cuts, braces, family vacations, college, ect. It’s an endless list really. I think over the course of 18 years a person could easily another $75,000. If you spend $100 per birthday, $200 at Christmas, and spend $2,000 on a family vacation every other year, you’ve already spent $23,400.

My conclusion is that I don’t think $200,000 to raise a child is really that outrageous. In fact, it seems pretty accurate to me. Thoughts?

pic by: lucias clay


JB said...

I agree. $200,000 seems pretty accurate. But... it doesn't seem as bad though when you look at how much money you'll make over that 18 year period.

$40,000 x 18 = $720,000 (of course this could be more or less!)

But, using that figure - 200,000 is just a little over a quarter of your income over that 18 year period. Is having a kid worth a quarter of your income? Probably!

And also, each additional kid would cost less!

Tight Fisted Miser said...

Thanks for linking to me. The cost of raising a child reports are from the USDA. They have a scale by income on how much it cost to raise a child. The $200,000 figure is roughly the median.

The $200,000 figure seemed high to me but the annual child raising cost is about how much money I made total last year.