You joke with friends about the bonus deduction you’ll get on your taxes and you’ve already picked up a cute new crib, a few baby bottles and some diapers so you feel like you’re ahead of the game.
Sure, you know this baby means that down the road you’ll be buying several dozen pairs of shoes, a yearly backpack loaded with new school supplies, and probably some sports equipment for your future superstar and a couple of musical instruments. Then someday there will be drivers’ education classes and those dreaded calls to your insurance agent. Is it starting to feel overwhelming yet?
Luckily, we approach child-raising with our hearts and don’t dwell on the overall toll it will take on our pocketbooks.
From generation to generation the cost of having and raising a child changes drastically. Since 1960 the United States Department of Agriculture (USDA) has been releasing figures on what it costs to raise a child through age 18. The latest numbers, although they fluctuate by geographic area and income level, put the grand total of raising a child today at over $240,000.
The tally includes things like clothing, health care, housing, childcare, education through high school and food but doesn’t even include the cost of a college education.
With numbers that are that hefty – how do parents do it?
Most initial baby supplies only have to be purchased once and are reused as a family grows so that means some savings on additional children. Couples know when they start their family to expect compromise and trade-offs. The things that seemed important before might not seem as important once a baby comes along.
There might be an upgrade to a bigger home in a safer neighborhood for instance, over the new boat the couple was eyeing up earlier. It might also mean trading the smaller sensible car you drove as a couple in for the infamous mini-van or SUV to accommodate car seats, strollers and other baby gear.
Although some of the costs of raising our children are out of our control, like groceries, and gas, parents are pretty good at controlling the costs that we can. Some couples are able to start saving and investing when they get married right away for their future family.
Others save money by accepting hand me downs from friends and relatives and shopping for children’s clothing from second hand stores, garage sales, and discount stores. Clothing makes up about six percent of the cost of raising a child. Parents can use the internet to their advantage to shop for deals on everything from clothing, outerwear, weekend getaways and family vacations.
Coupons can be a parent’s best friend and having a garden means saving a few dollars in the checkout line of the grocery store.
So how do experts come up with an almost $250,000 price tag for raising our kids? Daycare and preschool costs make up a good chunk of the expense for younger children. The USDA says child care and education make up 18 percent. Deciding on a place for your children when they can’t be with you is one of the most important decisions parents must make and shopping for a good daycare and preschool means weighing the fees a facility charges against the programs and activities they are able to offer.
Groceries make up 16 percent of the cost of child rearing. From a gallon of milk to a box of cereal most people are shaking their heads as they walk out the doors of the local grocer these days. And the price at the gas pump continues to hit the pocketbooks of consumers in a big way too so taking our children all of the places that they need to go means more money at the pump. Health care and dental costs continue to rise. Each year changes are announced to co-pays and coverage that affect everything from the initial cost of labor and delivery to a child’s stitches, minor surgeries, broken bones, check-ups, braces and other surprises.
Besides school, participation in extra-curricular activities can be costly too as organized youth sports start earlier than ever and continue on through graduation. Sometimes to save money parents with multiple children let them try different things while they are young and then ask their kids to choose activities that they want to continue carefully as they get older and the fees go up, maybe limiting each child to the one extra-curricular activity they enjoy the most.
Electronics is a relatively new cost parents have today that they didn’t have in the 1960’s. Computers, smartphones with calling plans, video games and other gadgets can add up to big money for parents starting already in elementary school.
The older they get the faster the expenses mount, too. Feeding a 15-year-old boy is a lot different than feeding a fifteen-month-old boy. And some day the car he is pushing around the living room on his knees will be replaced by a life sized one parked in the driveway next to yours.
Even though the USDA doesn’t include the cost in their figures, what about those college expenses? Each family has to come up with their own arrangement to meet the expenses and the cost of tuition with room and board at a state university can typically mean about $17,000 and private colleges can come closer to $40,000. Securing grants and scholarships to help curb expenses is more important than ever.
Maybe having kids is a little costly. The numbers might surprise you but it’s a pretty good investment. The dollars of raising a child might be in the $200,000 range but the experience is still priceless.