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How Much Does It Really Cost to Raise a Child?

costs of having kids

We’ve all read those reports about how it costs almost a quarter of a million dollars to raise a child to age 18. That makes each year of life around $13,611 for middle income families. I have no idea about the rest of the world, but thought it might be fun to share average expenses for our kiddo. She will be nine in a few months, making us half way to adulthood. Here is a breakdown of our costs to raise a child.

Keep in mind that we only have one kid, are upper middle class earners, and live in a low cost of living area. Where you live can be a huge influence on how much you spend. Also, as an only child, our daughter probably has the benefit of many more splurges that would be possible with multiple children.

Necessary Expenses

Food

This is a hard category to break down because I don’t track grocery spending into kid vs adult.  Most of the time, we all eat the same things. Having a child means buying a little more. The two notable exceptions are the gallon of organic milk I buy every ten days at $5-$6 a pop and the $10-$15 we spend per month on school cafeteria lunches. I would estimate spending about $20 extra per week on food with an extra person in the house.

Average Food Costs per year: $1400

Clothes

We’ve had two major clothes shopping trips this year plus some purchases from eBay and consignment stores. It would be nice to have a source of hand me downs, but being an only child and the oldest female grandchild limits this steam of clothing. Buying expensive items like coats and boots used or on clearance is how we try to save in this area. I sign up for email coupons from our favorite retailers that we stack on store sales, usually saving 50% or more.

We also resell any clothing that isn’t demolished. Often, we make money or break even on ski and winter clothing.

Average Clothes Spending: $200 (-$150 for resold items) Net $50

Utilities

Again, very hard to track how much electricity and water a kid uses. Our electric bill has gone down over the years due to more efficient lighting, setting our thermostat lower in winter, and not using the A/C until the temperature is above 90 degrees. I don’t think having a child contributes to an overall increase in electricity or heat except during the first few months with a new baby when you want the temperature to be perfect.  Our water bill is about $5 a month higher post child.

Average Yearly Utility Cost: $60

Medical

Since we have a very high deductible health plan and most dental insurance is a rip off, we pay out of pocket for medical and dental spending. This year, we had one visit to urgent care, a scheduled doctor visit to renew our daughter’s allergy prescription, two dental visits, and a couple of prescription medicines. Orthodontic treatment starts later this month, so this cost is going to be much higher in 2016.

Total medical spending: $411

School Costs

Yes, there is a cost for attending public school. Field trips, planners, school supplies; all that costs money. There are charities and programs to help out low income families with these costs, but thankfully, we don’t qualify.

School annual costs: $200

Transportation

We do spend a fair amount of time hauling our kid around to where she needs to be. We do carpool, but there are usually at least three round trips per week to school plus getting to after school programs and activities. Although we haven’t bought a bigger car due to having a child, I bet we add about 50 miles a month in kid related transportation.

At an average of 25 miles per gallon of gas costing around $2.25/gallon, that makes kid transport cost about $54 a year.

Time

The really big necessary cost of having a child is time. I used to think I was busy before being a Mom, but I look back now at all the time I wasted. I think having a child has made me a better multi-tasker, and I’ve learned to not sweat the small stuff as much. Sometimes I wish for more time to myself, but I’m sure I’ll miss all the craziness once it’s gone.

Total Essential Child Spending= $2175

 Non-Essential Costs

We choose to spend a portion of our income on things that are certainly non-essential to raising a child. Our hope is by offering travel, sports, art, and other experiences, we’ll get a well rounded, self-confident child who carries those same traits into adulthood. These are things we choose to spend money on.

Travel

Although we try to use points and miles to fund the majority of our trips, there are some extra costs for taking a kid on vacation. You’ll often have to book larger rooms or pay for roll away beds. Childrean over two need their own airline ticket, and kids don’t eat free at most restaurants. We have also bought tickets for Disneyland Paris, Monterey Bay Aquarium, and the Phoenix Zoo this year. I am fairly certain Jim and I would not have visited any of those attractions on our own.

We had an epic travel year, and I’m only ball parking how much of  our travel expenses were kid related. I don’t expect vacation costs to be this high in 2016.

Kid Travel Expenses: $1,000

Activities and Sports

I don’t like the idea of over scheduling kids to death, but we do participate in several activities. Our daughter has taken dance lessons since she was three. Classes are for 9 months at $40 a month plus $130 for shoes and recital costume.

We entered a $25 triathlon this summer. In the fall, we did Girls on the Run which cost $60. Ice skating lessons start next week at $40 for a five week session plus $25 for used skates. Our family also enjoys winter activities. We are using last year’s gear except for a pair of second hand cross country boots purchased for $25, but a kid’s ski pass to Telluride costs $279.

This past summer, we also did a week of golf camp at $50 and six playground days for $25 each. The playground days were our only daycare expense, even though it was more like camp that babysitting. Up until kindergarten, we were paying $600 a month for daycare, and I know child care is even more expensive in many parts of the country. Looking back at that expense, our activity total doesn’t seem bad at all!

Total annual cost of Activities: $1083

Gifts and Holidays

Parents can get carried away with birthday, Christmas, and other holiday presents, especially with an only child. We spent about $200 on Christmas this year and $60 for ear piercing as a birthday gift. She also got a Kindle as as reward for getting the most reading points in second grade, and I’m sure we caved and bought some other crap gifts for various things.

For our daughter’s 8th birthday party, we set $50 budget and she got to decide how to spend it. I like that idea going forward. It takes having to say no off the table.

Don’t be afraid to ask grandparents and family members for things your child needs. They are going to buy a gift anyway, so why not ask for something useful instead of another plastic item that plays “Let it Go.”

Gift Expenses: $400

Investments

Perhaps the most important money we spent last year was investing in our child’s future. Two hundred dollars a month is automatically invested into her 529 account, and we usually put in a larger sum toward the end of the year. My government job hasn’t paid since October, so we weren’t able to do that in 2015, but there is always next year.

There is no requirement that parents have to pay for a kids’s college education. In fact, I’d say don’t if you haven’t taken care of your own retirement needs. As I’ve said many times, your kid will appreciate you much more if they don’t have to take care of you as a senior.

College Savings in 2015: $2400

Total Non-Essential Kid Spending= $4883

Good Kid Phase

I think we are in a very good kid phase. Daycare, diapers, and formula are over. Data plans, car insurance, and trendy clothes are a few years down the road. Eight-year-olds really don’t need that much. The huge majority of our cost to raise a child at this point is on wants rather than needs.

Parents, what is your most expensive kid related item? What stage of childhood/adolescence is the most expensive?

 

 

 

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

18 comments

  1. I am only in the early stages (daughter is 9 months old) but so far it has been much cheaper than I expected. The biggest realization that my wife and I had was that we don’t need to buy everything people tell us. There is so much junk out there that people say you “need” that you don’t (baby wipes warmer??). Also, look to buy things used. We buy 90% of our clothes at the spring and fall city wide rummage sales. It is crazy how cheap barely used clothes can be for kids. Take advantage of it!

    • No kidding. Diapers and daycare are expensive enough without adding all those other things people say you need. Small kids could care less where their clothes and toys come from and the library is a great free source of entertainment. Why make it more expensive than it needs to be?

  2. We’re in pretty similar stage – with kids at 8, 6 & 4. Thankfully, for the most part, diapers are quickly leaving our budget and we have the benefit of using clothes twice with having two boys. That being said, I always shake my head when I read about how expensive kids can be. Sure, they’re definitely expensive, but there are so many ways to save on things that can greatly mitigate those costs.

    • I know one family who swore that a Cadillac Escalade was a necessity for hauling around their three kids. It does make you shake your head, doesn’t it?

  3. Now that my daughter’s in kindergarten, we’ve left behind most of the special food, diapers, childcare expenses/private school (no public pre-k in NC). Activities are a little more expensive, and saving for college costs. Not looking forward to teen years, with cell/data plans, more brand awareness for clothes, car insurance etc.

    • I don’t look forward to all that either but hopefully we will have established a good financial base to work from. Here’s to hoping all common sense does not leave during teen years.

  4. To be honest I’m delaying kids for two reasons: time and money. Both my wife and I are in grad school so we are limited on the time front, and we’d rather pay down more of our student loans before having kids.

    The medical costs is one I think people need to be prepared for. One hospital stay can blow your deductible (if not out of pocket max). But that can happen without kids as well, of course.

    • You are right that anyone can have a medical emergency, but if it’s your kid, you will spend whatever it takes and not think twice about going to the doctor or even ER if it seems necessary. Most adults would probably put off things like that for themselves.

  5. I believe that the non-essential expenses is where we go a little off the deep end. I am guilty of that for I only have one child, so I have to monitor that I don’t go overboard to compensate that I only get one try at making sure she turns into a normal and successful human being. I can totally see where us parents can feel the need to throw money at the problem.

    • We also have to watch out having only one child. I’m sure she will be spoiled somewhat just because she doesn’t have to share attention, but I don’t regret any of the extra things we spend money on for her at this point, especially travel.

  6. I recently had someone comment on my blog that $240/yr for kids clothes was unreasonably low. Mine are toddlers and getting hand-me-downs so I didn’t think so. I plan on budgeting a bit more as they grow older. Since I am still so close to the baby stage – I think that is most expensive, diapers and daycare – I can’t see how high school is going to cost more as long as we keep them in public school. Next year my son goes to Kindergarten, and then we will only have to pay for before and after-school care – that will be a good $5000 savings – I can’t wait!

    • I guess it depends on what you’re into. We could have easily spent $200 on a winter coat and snow pants but were willing to wait and shop around until we found a like new set at the consignment store for cheap. I imagine as our daughter gets older and is more brand conscious we might not be able to pull off such low spending on clothes. I do think we’ll give her a clothing budget and let her choose or find ways to earn more money if she wants more that we are willing to pay for.

  7. Our most expensive kid-related item will be definitely be college for my son. It’s a gift that both my hubby and me received from our parents and one we plan to give our son no matter what it means for our finances. The most expensive phase to-date for my son was from 6 months to 3 years when he was in daycare full-time as well as diapers. It just felt like all of our money was going out the window every single day.

    • At least with college you should get a return on your investment. Diapers and daycare don’t really seem to offer much in the way of feeling like money well spent.

  8. I recently got engaged and although im still a long ways from having our first child, this is really an eye opening post. Thanks

  9. The most expensive part of my children is the fact, that I don’t work anymore.
    Makes 1500 Euro/month (after taxes) less. Since my son doesn’t like kindergarten he stays there maximum 5 hours a day and I can’t work.
    Well, he’s worth it and we can afford mommy staying home.

  10. Pretty crazy that the average kid costs over 250k from birth to retirement. The things parents do for their kids haha..

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