We were probably all told by our parents that we are expensive at some point during our childhood. I know I heard it all the time from my dad, but that was because every time he gave me money for something I never returned the change. I recently read an article from CNNMoney that said the cost of raising a child has risen $8,000 over the last year. This brings the estimated cost of raising a child for middle class families to $235,000 over 17 years. Now that I am new father I like to pay attention to these statistics even though I know every family is going to be different.
At first glance, I thought $235,000 was a little high, but then I started breaking down the various categories it made the amount seem more reasonable. The three categories that caught my attention are housing, childcare/education and food. Here is a quick breakdown of each of the three expense:
Housing ($70,500) – This amount breaks down to a monthly cost of $346. I am not sure how they get this number, but it seems a little excessive. I guess if you include the need for a larger home and the increase in utilities this number might be accurate. I would have estimated around $250 a month.
Childcare/Education ($41,000) – This amount breaks down to a monthly cost of $201. I will not dispute this number because I calculated that we will spend approximately $31,000 in the first five years for full-time day care. The day care we take our daughter to is one of the most reasonable in my area. If we only spend $10,000 over the last 12 years I will be extremely happy because even public school have all kinds of miscellaneous costs.
Food ($38,000) – This amount breaks down to a monthly cost of $186. I think this number is accurate and I think it could even be higher. If my kids eat like I did I might go bankrupt. This amount means you are spending an average of $6 a day on food for your kid. I remember school lunches were not cheap. Packing lunch may be cheaper, but they are not free. I know this number is just an estimation, but I think it is a little low.
If you want to calculate how much it will cost for you to raise a child here is a calculator from the USDA. After breaking down the costs I think overall $235,000 is reasonable. That may seem like a lot of money, but don’t let it deter you from having a child. My little girl is only 5 months old and she is worth every penny. Come on, I had to get sappy on you for a second.
Do you think these numbers are accurate? Is there anything you would adjust higher or lower?
“We never know the love of the parent till we become parents ourselves.” ~ Henry Ward Beecher
For me, at least, the childcare/education number will probably be a lot lower. My wife stays at home so she watches our daughter while I work, so we won’t be paying for day care.
That is great. My wife wants to do that, but it isn’t financially feasible right now. It is amazing how expensive day care is. I am sure your daughter loves staying home with your wife as well.
One thing to take into consideration is that the figures in that study do not include the cost of college, which can easily add an additional $100,000 onto the cost.
That is a great point. If the parents plan ahead It is often an expense that is incurred over those 17 years before the child goes to college. In this case it should probably be included in the estimation. Thanks for the comment.