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Let’s face it – it costs a lot to raise a kid to adulthood.
Therefore, you are probably going to have to make some steep lifestyle changes before you start your family. How? By examining your finances and adding the extra costs of raising a kid into it.
Start your budget
What are you willing to give up? And, what can you give up? Are you willing to give up your weekly manicures and nights out on the town so you have more money to spend on your kid? Yes? No? Maybe? These are not only important questions but also play a role in how much kids cost to raise.
So, start budgeting for the kid about a year in advance. In other words, start living like you have a kid. When you go grocery shopping, write down how much baby items cost – i.e. diapers, formula, baby food, medications, etc. If your local grocery store doesn’t sell these items, look online at Walmart, Target, and Amazon for them, along with baby furniture, crib sheets, blankets, baby clothes, etc. Then, sit down with your partner and add these costs into your weekly or monthly budget.
Don’t forget to add unforeseen costs like medical emergencies, wellness visits for your child, childcare, vacations, and child activities into your budget.
Pretend your kid is already here and start putting that money away. It’s the best way to really feel how much it will cost you to raise a kid – starting with a newborn.
Don’t forget childcare. And, the time you’ll take off for parental leave. You’ll also need to add in the extra cost for health insurance for your kid. Planning ahead and budgeting gives you a heads-up at what you’ll “shell out” when your new bundle of joy arrives.
So how much do kids cost to raise?
Well, the average total cost of raising a child (born in 2013) to the age of 18 (for a two-parent middle-class family in the U.S.) is approximately $245,000. This equates to approximately $13,800 – $15,000, per child, per year, for a two-parent family with a median income of roughly $62,000 – $107,000, per year.
It costs more to raise a kid as he or she ages, and as more kids join the family.
Factors that determine how much it costs to raise a kid
Listed below are factors that will influence how much it costs to raise a kid:
High-income couples ($107,000+ per year) can expect to spend approximately $20,000, per year, on child-raising costs (during infancy) and approximately $24,000 from childhood to 17-years-old. Single parents and married couples, who make less than $59,000, per year, can expect to spend approximately $9,000, per year to raise a young child, and approximately $11,000 to raise a teenager to the age of 17.
Housing & Location
The type of home you have and where you live also play a role in the cost of raising a kid. A house, townhome, or condo is going to cost more upfront, but an apartment is going to cost more over time. So, the cost of raising your kid will partly depend on what type of home you want for him or her. Do you want to invest in a piece of property you will eventually own or do you want to pay month-to-month for apartment rent?
The location also matters. The most expensive states to raise a child are Connecticut, Maine, Vermont, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island. For two-parent families, it can cost up to $407,000 (total) to raise a kid in these states.
The middle-ground states are Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. For two-parent families, it costs approximately $264,000+ (total) to raise a kid in these states.
For two-parent families, it costs about $193,000 (total) to raise a kid in rural Kentucky, Alabama, West Virginia, South Carolina, Georgia, and Tennessee.
Food is another cost that is associated with raising a kid – especially as the kid ages. In 2015, it cost almost $3,000, per year, to feed a teenager. However, for younger children, the food cost is approximately 25% higher.
Another big factor in how much kids cost to raise is childcare. Parents, on average, pay approximately $5,000 to $17,000, per child, per year, in daycare costs (below the age of 3). That is $420 to $1,400, per month, depending on your location. Preschool (3-4 years old) typically costs parents $4,000 to $13,000, per child, per year. That is approximately $400 to $1,000, per month. These costs sharply decline once the child starts going to school.
It is also important to have reliable transportation so you can transport your child to daycare or school, doctor’s appointments, social activities, and extracurricular activities like soccer and dance.
Ironically, parents who have three or more kids actually save money; it costs less (24% less) to raise a kid when you have more than one kid. Why? Because parents tend to spend less on each kid due to financial restraints. These parents are more selective and budget-cautious when it comes to purchasing items.
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Create a budget
If you want to know how much kids cost, create a budget and practice it. More specifically, research how much baby items cost and subtract those costs from your current salary or salaries.
Place the information into a spreadsheet or similar program. This will tell you how much money you will need to raise a kid. It will also show you how much of your current funds will be going towards child-raising costs. Put that money in a savings account so you can get an idea of how the “loss” of that money will alter your current lifestyle.
Obtain stable and safe housing
Another way to prepare for a kid is to obtain stable and safe housing. It doesn’t matter what type of housing you select for your child – the only requirement is that your child is shielded from danger and feels safe within it. So, select housing that you can afford and that is safe and secure for your child.
If you don’t have a stable place to live you’ll end up spending more money on hotel fees. If you’re homeless, it may not cost you a lot financially, but you will pay a heavy toll emotionally. Living in a homeless shelter with children is neither ideal nor safe.
Determine the cost of a family health insurance plan
The best way to get a true understanding of how much kids cost is to look at all avenues – even health insurance expenses. You’ll need to add-in pregnancy and delivery fees (not paid by insurance), the monthly costs of upgrading from a dependent and spouse plan to a family plan, and wellness and doctor’s visits for your child once he or she arrives.
About the Author
Dr. R. Y. Langham
Ph.D. in Family Psychology
Ree has a Master’s in Marriage and Family Therapy (M.M.F.T.) and a Ph.D. in Family Psychology. She spent over ten years counseling families, couples, individuals, and children on adjustment issues such as blended families, same-sex couples, dysfunctional family relationships, relationship issues, etc. Now she writes for famous health organizations and is a published author.
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