Congratulations! You have decided to take the leap into parenting; perhaps you are just starting to think about planning a family, or maybe you are expecting your first child, or you might already be a parent and curious about what costs you’re going to be ensuing in the coming years.
Regardless, you’re here because you want to know what kind of financial commitment you’ll be making as a parent. We’ve taken the guesswork out of it for you and compiled a list of some of the biggest expenses associated with having kids.
Cost to Raise a Child – Baby’s First Year
This one’s a biggy because as adorable and tiny as wee babes are, they come with a hefty price tag. The reason for this is all the equipment and paraphernalia you need, or want, as part of caring for them.
This is something important to distinguish, because while you may want everything that the stores have to offer, the list of things you need may be slightly different (and significantly cheaper). If you’re looking to cut costs, keep this in mind when shopping for your little one’s nursery.
That being said, there will be some items that you will want that are very practical and help tremendously when caring for your precious baby. For instance, while you don’t need a baby monitor, it is certainly nice to have and provides you with tremendous peace of mind (not to mention a way to check on your slumbering babe without waking them!).
Another big expense would be your baby’s crib, whether that be a traditional crib or a co-sleeper crib. Along with a crib in that adorable nursery room, you will likely want a changing table, perhaps a rocking chair, some toys, and let’s not forget the diapers. Whether cloth or disposable, diapers will end up costing you approximately $500 in the first year.
If you want to be able to get out and about with your baby, then you will need to invest in some traveling gear as well. Things like strollers and baby carriers can range quite a bit in price, so you will need to decide what price is best for you and your family. Little extras like toys, snack containers, extra bottles, and soothers can contribute to that price tag as well.
There will be many times that you will be choosing between wants and needs when deciding what to purchase for your baby in the first year. On average though, the overall cost of raising a baby runs about $12,680 in the first year.
The Toddler Years
While a baby’s first year can be quite expensive, due to getting outfitted with all the necessities, the cost to raise a child does not seem to decline after that first expensive year (sorry!). In fact, the USDA estimates that raising a child between the ages of 3-5 can cost approximately $12,730, a slight increase from that first couple of years. Why the increase, you may ask? Well, these adorable munchkins come with a lot of stuff! From clothing to toys to medical expenses, the cost continues to grow as your child gets older.
You might decide to enroll your little Beethoven in toddler music classes, or your Mini Monet might thrive in their art classes. All of these little extras, while wonderful, can add up quickly.
Cost to Raise a Child – The School Years
Over the course of the next few years, the cost to raise a child will be fairly consistent, although it will increase slightly.
By the time your child is a teenager, around 15 to 17 years old, the annual expenses will be upwards of $14,000.
Where does all this money go? The USDA breaks down the various costs of raising a child, in order to help parents plan and budget for such costs.
A large portion of this stems from housing requirements and accounts for approximately 29% of the total annual cost of raising a child. Another large chunk, 18% to be exact, is the food we feed our hungry little babes. And, anyone with a teenager can surely agree that this amount practically doubles when they hit puberty! Can we say hello to Costco membership??!
Another expense that we tend to accrue throughout our children’s school years is their extra-curricular activities. The sports teams they join, the special interest lessons they take, the camps they attend in the summer. All of these carry hefty price tags, and while we want our children to have the opportunity to explore and experience a wide range of interests and activities, this is something that can sometimes break the bank.
If you are working outside the home, then you will also be incurring childcare expenses, and these can be absolutely exorbitant. Most public daycare facilities charge an average of $1,230 per month to care for an infant, and home daycares charge approximately $800 per month.
This works out to families spending about 18% of their income on childcare for their infant and 13% for their toddler. This is why so many families make the choice for one parent to stay home and care for the children, as the cost of childcare simply makes it impossible for both to earn an income outside the home. But, for single parents, this isn’t always an option, and the struggle to find affordable childcare so that they can go to work is a very real problem.
Beyond High School
You’ve done it, you have raised your wee babe, survived the toddler years, and grew some grey hair through the teen years. The time has come that your child has finished high school and is moving onto bigger and better (and perhaps more expensive) things.
This next step in their lives can leave a hefty dent in your wallet and savings account, as they pursue post-secondary education. Now, this stage of life is open to many different viewpoints from parents. Some parents believe that they should help their child with some, if not all, of the cost of their post-secondary schooling.
Some parents believe that it is their child’s responsibility to save their money, work part-time, and pay for their tuition themselves. And, many parents fall somewhere in the middle of those two beliefs.
Depending on where you fall on the post-secondary spending spectrum (say that three times fast!), you will likely incur some cost when your child goes to university or college. The cost of tuition these days is very high, and it leaves many young adults with tremendous debt, something many of us parents want to save our kids from.
According to HSBC’s 2018 report on education, students attending US universities can look to spend close to $100,000 over the course of their degree. The study also shows that 85% of those students work in paid employment throughout their studies to try to help offset some of those costs. Over half of the parent population reduced or eliminated their leisure activities in an attempt to help pay for these high tuition fees.
However, there is no need to lose hope and worry that your child will never be able to afford post-secondary education. There are ways to save money, even while attending university.
Although the cost to raise a child can amount to a whopping $233,610, experts say that with some careful planning and budgeting, parents can manage this big expense. According to USA Today, financial experts advise tucking away six month’s worth of expenses, which will help if you are wanting to take additional time off when your baby is born.
Life doesn’t always work out the way we want it to though, and we’re not always able to save the money we would like to save; many of us are just getting by paycheck to paycheck. But, if you are in the position to save some money before starting your family, then you will be ahead of the game when your baby arrives.
Regardless of what proactive planning you are able to do though, bringing a baby into this world is a wonderful, exciting time filled with love, laughter, and of course some stress. Try to plan and budget however you can, try to trim costs where you can, but above all else, love that little baby with all your heart. After all, that is the most important thing you can give your baby, not the most recent gizmo or gadget.