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.
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:
|Housing||$450 x 12||$5,400.00|
|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|
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.