Does My Son Really Cost Me $26,000 a Year?

I recently read a post on Wisebread pointing out that raising a family costs money. It really does. Children do cost money. But how much they actually cost is open for debate. Estimates about how much it costs to raise a child to the age of 18 range from $100,000 to more than $200,000. Indeed, the recent numbers from the USDA indicate that the more than $200,000 is most likely. And that’s per child.

Photo by D. Sharon Pruitt via Flickr

This cost has been on my mind a lot, and I’m sure many others have thought about it — especially with the recent recession. If it really costs more than $200,000 to raise a child, can you even afford to have one? I’m fairly certain that my son isn’t going to cost that much to raise. I went to the USDA’s web site and used their Cost of Raising a Child Calculator to determine how much the government thinks I should be spending each year on my son. And the answer startled me: $26,000. According to where I live (granted, my state is lumped in with California, so that could have something to do with it), and my income, the USDA estimates that I spend $26,000 a year on my son. But do I? I decided to run the numbers.

What I Spend on My Son Each Year

I’m just going to round up the information from what we spent last year on my son, going back over the categories in my personal finance software. First of all, housing expenses are included. So, we pay $1,350 a month for mortgage, homeowner’s insurance and property taxes. Divide that by the three of us, and it comes out to $450 a month for each of us. So we’ll start there:

Budget category Amount Total
Housing $450 x 12 $5,400.00
Clothes $407.31
Toys (including Christmas and birthday) $260.45
Food (total groceries) $7,127.49 / 3 $2,375.83
Entertainment (including eating out, movies and satellite TV) $2,505.50 / 3 $835.17
Utilities $3,617.46 / 3 $1,205.82
Travel/Vacations $1,475.36 / 3 $491.79
Day camp/Child care (including sitters) $1,001.00
Piano lessons $40 x 12 $480.00
Sports activities (fees and equipment) $150.00
College plan contributions $100 x 12 $1,200.00
Total $14,790.94

The total comes to $14,790.94 — more than $10,000 less than the $26,000 a year. And, to be honest, I really don’t think my son is eating the same amount of food my husband and me. Nor does he do the same amount of traveling as we do, or enjoy all the entertainment we do. And, to tell the truth, even without my son, we’d probably still have the same house we do, and pay the same utilities. If I take out the cost of utilities and housing, the number is $8,185.12 a year.

But this list does show me where we, as a family, could cut back our budget if needed. And I was rather surprised at the total. It came rather closer to the $26,000 a year than I thought it would. As my son grows older, he will be expected to have a part-time job, and help pay for his own entertainment, clothes and “toys”. Additionally, he will be expected to help contribute to his college education.

Even though I’m spending more than I thought on my son, this exercise has still assured me that I am spending less than $26,000 a year — and that he will probably make it to age 18 without me having spent $200,000 (if we’re going with the $8,000 number, of course) on him.

How much do you spend each year on your kids? Come on now. Be honest.

About the Author

By , on Oct 21, 2010
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

Leave Your Comment (16 Comments)

  1. Beginning with cloth diapering and breastfeeding, we raised our 2 kids on a fraction of the 26K. And it’s not a bad idea to have your children watching you make frugal choices during their early years.

  2. Lisa says:

    I was surprised to have read about how much a child cost to raise. Granted I live in California, but not all parts are equal. I also think that even though the amount came out to 14K, I agree with you that some things, you child probably did not consume as much as you. I figure, children get expensive as they get older. I am not saying we have to give them everything they want, but clothing, food and toys desired tend to go up with age. I would be interested to see how much they factor in when they are teenagers. However, when they are younger, I cannot imagine that they really cost $26K.

  3. Jenna says:

    I think a lot of costs are associated with cost of living for your location within the US. More than how frugal or not you are with your children.

  4. Penny Saver says:

    I’m not seeing medical, which were a big expense for both of my kids’ first years even with insurance. Our premiums and deductibles were both raised for the extra family member, and my kids each went over the deductible in their first year.

    I stayed home to care for my kids but childcare would cost more than I could make at a low-wage job – easily $24k a year for two young kids in our area. So there was the loss of income or daycare to contend with, both adding significantly to your tally of the cost of kids.

    I’m a super frugal shopper, taking full advantage of hand-me-downs and second-hand stuff, cloth diapers and the like. Sometimes the cheapest option doesn’t work, though, and you have to spend more. For example, I wanted to nurse but never made enough milk to nurse either baby full time, so both got formula. I spent at least $1000 to breastfeed before giving in to formula, though, between lactation consultants, breast pumps and bottles, a specialty nursing system, nursing bras, supplements and teas, etc. The “free” option wasn’t free, and formula ended up being cheaper for us.

  5. Wait ’til he goes to University, or are you already saving for that? If he plays ANY competitive sport that is a big packet of money there. If he has a gift for music, that one is another big load of money, the list is very long, but be proud and happy of your child, and treasure them every day.

  6. ctreit says:

    One of my little guys costs $1000/month for day care or $12,000/year or $60,000 until he goes to school, when the after-school program costs only $300/month. So, child care alone gets me pretty darn close to $100,000. Factor in all the other costs you mention and we are crossing the $200,000 mark easily.

  7. Rhonda says:

    What about medical and dental expenses? Kids raise the cost of insurance, plus there are co-pays. Some kids need braces or glasses or contacts. What about school and scouting fund-raisers that parents are supposed to contribute to? What about presents for birthday parties your child gets invited to? What about school and holiday portraits, haircuts, Halloween costumes, school supplies, book fairs, scouting dues and uniforms? There are lots of little expenses that keep adding up as kids get older.

  8. SB says:

    I do think that housing and utilities should be included. While it may be true that the cost of housing for the parents didn’t change from before the kid was born, I am betting that most parents choose a larger living space knowing they would need room for a family before they even had any children. Therefore, a portion of the mortgage/heating/electricity for another bedroom or two should be part of the cost of raising a kid.

    Also, where is the mention of the additional health insurance/co-pays/medical expenses for the child? This is not insignificant and should be included.

  9. Jackie says:

    I’m up to about $17,400 per year now on my son, but that’s by no means an average. It was highest during two periods: when he was an infant and then again now that he is in high school. Of course, I could spend less. I could not be paying his car insurance, or paying for a yearbook, or trips, etc. And we could live in a 2bedroom condo instead of a 3bedroom house, which would cut down on utilities. I think there’s a difference between “what it costs” and “what many people spend”…

  10. Dave says:

    I do a agree that raising children are expensive. Especially when they are in their teens and college. But up till then they are not that expensive. I must disagree with your budget. The cost of housing should not be part of their expense. If they weren’t there you would have the expense anyway. Your not taking on more housing costs because they are there. Also I can’t agree with assigning a third for food, they don’t eat that much. Their entertainment is their toys and a little Disney Channel on the cable your already paying for yourself. Take off utilities and travel. The rug rats aren’t so much of an impact as you indicated.

    Keep the toys, day care/camp, piano and sports. I’ll estimate that it will cost you one third of your budget to keep a kid every year. Now after their in the teen years the costs will increase and also if you put them in private school your budget total would be accurate.

    We had 5 in school at the same time. In our house we had more electric, water and food expenses. Yet we got substantial discounts at a private school when they all were there.

  11. WR says:

    I would like to introduce some healthy skepticism to this discussion.

    First, I owned a home before I had kids, When my wife did give birth, we did not have to make any major structural changes to the home or any changes to the mortgage. You should not divide up the cost 3-ways. It does not cost much more for 3 people to live n a 3BR home than 2 people and a baby. We drove to Tampa one year, It cost a very small amount to have our 8 and 6 year old kids along. They eat and poop, yes but the fiduciary impact is negligible.

    When they were born I set up 529 plans. 50 bucks a month. they are doing well. I sent the account number to gramma, family and friends saying ‘no Go Diego Go or Spongebob toys but instead send the $$ to this account’. They love it and the kids ‘will’ love it. (Ask them now and they will take a Spongebob plush over a 25.00 check I am sure. these things take time)

    Kids are also funding the account. lawn work = 25.00 check to college fund.

    It is VERY, VERY important for them to be part and parcel of the college funding experience. Ownership is a psychological need.

    To be fair, you need to honestly find the delta between what your life costs vs. your life+kids. For us is was almost a wash. Diapers,safety gates, car seats, formula, etc costs money but…we used to go out and close the bar down, drink beer and wine on weekdays, go to movies.

    No movies, little bar time and drinking only on special occasions has reduced our spend quite considerably.

    We raised 2 healthy, happy kids in a small 2BR, 1BA Cape Cod. It is paid for now.

    We never, ever bought a new item for them yet they had Nike soccer cleats, name brand ballerina shoes, jeans, etc. All from estate sales, yard sales and craigslist. We summarily donated back these little used items and claimed a decent tax deduction. Kids grow fast. A $25.00 pair of sneakers for a 3 year old seldom makes any sense. There are now, and there will always be, parents who will pay anything for their kids to look like the J.C Penney fall catalog. Sad.

    I wanted to post to say that it can be done. We are frugal, we enjoy our life and we are financially independent. YMMV.

    -WR

  12. Sandy says:

    Donna, In addition to that, I think many parents think they need a 2500 sq foot house with 5 bedrooms once they have they’re first kid. I can’t tell you how many people have told me they’re 3 bedroom is too small for a family of 3.

  13. I wonder if one reason the national average is so high because of the people who buy everything new and don’t shop around for price?

    Seriously: A pair of kids’ jeans at a Baby Gap kind of store cost as much as an adult pair of jeans. New baby clothes can be really expensive vs. the hand-me-downs from family/other parents or the 25-cent rompers from yard sales.

    My niece’s two boys are stylin’ kids — but she gets it all from thrift stores and yard sales. The same labels as their classmates, but at a fraction of the cost.

    Stores like Play It Again Sports, online swap sites, Freecycle and other frugal hacks can bring the cost of child-rearing way, way down.

    So can not buying into (so to speak) the idea that children need to have an iPod in kindergarten and a cell phone by the third grade. Just sayin’.

  14. Sandy says:

    I think my cost is pretty close to that. I spend about $10K/year on childcare/kid since I work full time. If I assume your housing+other expenses are close to mine, hey presto, there’s your $26K.

    I personally wouldn’t have counted housing and utilities because we didn’t move to a bigger place when we had kids (like many do). Okay, maybe electricity is a little bigger, but in general we’d be spending that with kids or not.

  15. Allison says:

    This doesn’t include the cost of your time- i.e. the opportunity cost of giving up your free time because kids suck every minute of it from you, the days you have to take off work because they’re sick, etc.

  16. Arohan says:

    There are other expenses which many families have that bring the average up. For example, if your kid goes to daycare full time or you have a nanny, you can easily be looking at additional 7,000 – 10,000 per year (or more). Diapers and Formula are big expenses in the beginning as are doctor visits. Add in the school supplies, soccer/swimming/piano/anything else lessons, etc. Than if you are fortunate enough to send your kid to a private school, you are the one who is spending > 20,000 per year in just tuition and bringing the average up for everyone else :-)

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