The government loves to compile data and statistics, even when we Americans don’t necessarily want to know the results. The latest such, we’d rather not know study concluded that it costs an average of $235,000 to raise a child from birth to adulthood. Starting with the fact that the government is considering age 18 to be adulthood—as if they had never heard the term Boomerang Generation—and ending with the fact that this study does NOT include college costs, this report may leave you wondering if you’d rather have a child or a Ferrari you could buy for the same price.
Expectant parents can breathe a small sigh of relief. Yes, kids are expensive. Yes, $235,000 is a LOT of money. But, there are ways to reduce the (expected) bite out of your budget. Here are the cost breakdowns for raising your child, and some suggestions for lowering them:
According to the report’s estimates, this is by far the biggest expense you will face in bringing up a baby, at 30% of the $235,000 price tag for 18 years. The easiest way to keep this cost from being overwhelming is to remember that an additional member of the family does not mean an additional 1000 (or 2000 or 3000) square feet is necessary for comfort, happiness, and good parenting. Many families may feel like they need to upgrade their home when Junior comes along, but our grandparents were raised by big families in small houses, and it did not affect their ability to stack blocks, walk, or even get into the really good preschool. Live in a house you can afford, and this budget buster will be tamable.
2. Childcare and education
This represents a good 18% of the money you will shell out for your child’s upbringing—and to parents in some areas of the country where childcare costs are more than the average mortgage payment, 18% seems laughably low. The fact of the matter is that childcare and education are both very expensive. It makes sense for families to crunch numbers to see if it even makes sense financially for both parents to work, if one salary will go entirely to daycare and associated working costs. Other than hitting up Grandma for babysitting duty or having parents take different shifts at work so that someone is always at home, there are unfortunately not a lot of great options for parents looking to reduce the costs of daycare. As for education, sending your child to the local public school will mean you can save more money for college—which isn’t even included in the projected cost of raising a kid.
Kids do seem to like three meals a day, plus snacks, don’t they? The cost of food for your child will constitute 16% of your child-rearing costs, and there’s no way of knowing if the government included all the half-eaten Goldfish crackers and apples with a single bite taken out of them in their calculations. The biggest thing you can do to reduce your child’s impact on your food budget is to breastfeed early on. Formula is expensive and nursing is free (although it can make Mom eat like a trucker, which does reduce the savings somewhat). Once Junior is on solid foods, planning ahead for hunger emergencies can save you a lot of money when out and about and the only available food is both unhealthy and ridiculously expensive. Many toddler meltdowns have been averted by carrying a pb&j or a granola bar with you.
4. Health care
Considering that children have an uncanny ability to run high fevers when 500 miles away from home or start an Exorcist level of vomiting at 3 am, it seems unlikely that health care costs will only constitute 8% of your total childcare costs, as the government study claims. The only way to keep health care from biting you in the butt is to make sure that your child is insured. Even if you are currently un- or under-insured, your child may still qualify for Medicaid and the Children’s Health Insurance Program. Insurance doesn’t make emergency room visits any more pleasant, and co-pays can still be a little daunting—but the alternative is far too expensive to even consider.
This is by far the easiest child-rearing cost to avert. Sadly, at only 6% of your total costs, it’s also not necessarily a major place to save. When your kids are young, they have no idea if the clothes they are wearing are hand-me-downs, the “wrong” style, or anything else. They only know if they’re comfortable. So, when the kids are still too young to object, stock up on yard sale clothes and hand-me-downs. When your kids get old enough to care about the label they’re wearing, it gets a little more difficult. That’s when you can give Junior and Sis a lesson in economics: they have a specific budget for clothing, which they can blow on a single item from Abercrombie (or whatever it is the kids are wearing these days), or they can use it for a decent new wardrobe from Target. It’s their choice.
The Bottom Line
There’s no getting around the fact that having children will change your life and finances. But the joy they add to your life is priceless. Really. Kids are waaay better than a Ferrari.
Emily Guy Birken is a freelance writer and stay-at-home mom who is passionate about personal finance. She lives in Lafayette, Indiana with her mechanical engineer husband and her toddler son. She blogs about parenting at The SAHMnambulist and about the funny side of money at Live Like a Mensch.