The cost of having kids

According to the USDA, parents will spend $245,340 to raise a child. Amanda Gibson looks at her own family projections to see if those dollars stack up similarly.

January 27, 2015; 6:00 AM • by Amanda Gibson

Did you see this when it came out in 2014? The United States Department of Agriculture (USDA) released projections that parents will spend $245,340 to raise a child born in 2013 to age 17. This is interesting to me because I myself added a crumb-snatcher to my family in 2013. For shoots and giggles, I thought it might be fun to look at how my own projections for the Gibson family’s spending might stack up to the USDA numbers. And I might be feeling a little competitive¹ and want to beat these farmers at their own game.²

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Housing: $73,602

The USDA says that the average kid will cost $73,602 in housing expenses. What are they putting them up in, the penthouse?! JK, I’m surprised this number isn’t higher. When my husband and I were house shopping in 2008, we purchased with the expectation that this would be our children’s home until they flew the nest. Consequently, we decided on a house that was too big for us at the time and larger than we would have bought if we had no expectation of having kids. I estimate that we spent an extra $100,000 in house just for the kids. Add to that 20 years of maintenance and utilities bills. So, just pulling numbers out of thin air, I’m going to guess we might drop $200K to house our offspring.

But, but, but! In its report, the USDA notes that there are economies of scale for raising kids (econo-nerd speak for “less monies per kid as you have more kids”),³ i.e. you only have to buy one house whether you have one or two children. That’s certainly true for us. That means, if we completely lose our freaking minds and have four kids, each kid will cost $50,000. We’re already ahead $23,602!

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Child care and education: $44,161

The farmers estimate that we will spend $44,161 per child for childcare. For us this number is not too far off. I went back to grad school this year, which means that I am again paying someone to watch my babes. But it’s school, so I have summer and winter break off. My husband and I both have flexibility in our work situations. And living in Richmond city, we can take advantage of excellent, FREE preschool beginning at age four. Full-time day care for my youngest son is about $10,000 a year. So, yeah, let’s go with that, $44,161 per kid.

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Food: $39,254

We rarely eat out, and our grocery budget is about $125 per week. That also includes things like shampoo, but let’s keep things simple, shall we? I’m going to take a wild guess that as our boys get bigger, they will eat more. I could see spending $200 per week on food, which works out to $50 per child. The USDA estimates that the average family will spend 16 percent of the total amount of kid-raising money on food. That works out to… tapa tapa tapa, carry the four, tapa tapa tapa …about 50 bucks. Durn. They are right again. $39,254.

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Transportation: $34,348

Bad news: we got a car. We’re actually really happy with it. It’s a slightly used crossover with a third row. It’s very comfortable and has plenty of room for our family to expand for the next 10 years–that’s how long we plan to keep the car. I would still be driving my 1990 Honda Civic if I was footloose and fancy free, but I am not; I have these adorable little ankle-biters to drive around. Point being, we spent at least an extra $10,000 just to cart around the fam. Our next car will probably suffer the same fate. Then there’s the higher insurance, taxes, and gas bills that come with a nicer, newer, bigger car. It’s looking like $34,348, the USDA’s estimate, is right on the money again.

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Healthcare: $19,627

Right now each of our little darlings costs us $150 in health insurance premiums each month. We spend at least another 20 bucks a month in copays and such. I don’t plan on being a self-employed grad school student for all of our kids’ young lives, and therefore can at some point expect a company of some sort to shoulder part of the burden of our family’s health care. But until then I will continue to shell out the big bucks. If current trends continue, we can expect to spend more like $35,000 in healthcare on each kid. And these are healthy kids!

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Clothes and everything else: $34,348

The farmers of the USDA allow us $159 per month per kid for everything else–clothes, birthday presents, birthday presents for friends, backpacks, soccer fees, prom dresses, and on and on. Most months we don’t come close to this figure even for both kids, but then there are months when we spend copious amounts of cash to have a will drawn up for the sole purpose of protecting and caring for the kids if something happens to us. Well, USDA you seem to have beaten me on this one too.

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So if you’re keeping track, my projection for Gibson family spending is $237,111 for each child just to raise them to 17. What will we do with that extra $8,229? Birth control? If I’m being honest, a lot of it will go to carting the little ones around the world for the rich experiences that only travel can offer. Well, that and bail money for when I get caught robbing a bank to pay their college tuition.

Readers, how do your projections stack up? And those of you not planning on having kids, what the heck are you going to do with all that cash?

Photo by: stevendepolo

January 27, 2015 6:00 AM 0