Do You Have $222,360?

06.11.2010

So if I needed any more ammunition to add to my worry about having a child, I open up my yahoo page to be faced with the following article: (Sigh….)

Cost of Raising a Child Ticks Up

by Sue Shellenbarger / Friday, June 11, 2010

Provided by the Wall Street Journal

A child born in 2009 will cost nearly a quarter of a million dollars, or about $222,360, to raise to maturity, up a little less than 1% from 2008, the Agriculture Department said Wednesday in its annual report on the average cost of raising a child. (The department runs the survey to help courts and state governments set child-support guidelines.) Expenses for child care, education and health care rose the most compared with 2008, while the cost of transportation for a child actually fell, the department said. Annual child-rearing expenses for the average middle-income, two-parent family range from $11,650 to $13,530, depending on the age of the child, the department says.

Child care accounts for 17% of the total spending, and education for 16% of the total. The cost of housing makes up nearly one-third of the total; this is gauged by the average cost of an additional bedroom. But the tally excludes any spending on kids over age 17, so it doesn't include one of the biggest and fastest-growing single financial outlays many parents make: the cost of sending your child through college. Higher-education costs aren't included, the department says.

Families in the Northeast have the highest costs, followed by cities in the West, then cities in the Midwest. Families in rural areas and in Southern cities have the lowest child-rearing costs.

For families with many kids, however, there is some good news: The more children you have, the less it costs to raise each one. These economics of scale deliver 22% savings per child for families with three or more children. That is because kids can share a bedroom, hand down clothing and toys to each other, and consume food purchased in bulk quantities, reducing costs. Also, private schools and child-care centers may offer sibling discounts. The data is compiled based on spending by 11,800 two-parent families and 3,350 single parents with at least one child under 18 living at home.

Based on previous reports by the department, the overall cost of raising a child rose 15% in inflation-adjusted dollars between 1960 and 2008. The increase has been driven largely by sharp increases in health-care, child-care and education costs, the department says. Interestingly, clothing and food costs have fallen, perhaps because of more efficient mass production of food and reduced costs of manufacturing clothing.

Readers, yesterday, the discussion turned to whether or not it's possible to raise a family on one salary. Does a report like this help in making that kind of decision or in planning your savings?[1]

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[1] http://finance.yahoo.com/family-home/article/109765/cost-of-raising-a-child-ticks-up?mod=family-kids_parents

Aren't Babies Expensive?

04.11.2010

We went out to dinner tonight with some friends and in the restaurant was a young family with a newborn. I’m terrible at guessing children’s ages and I often play this game with myself where I try to guess the age of the child and then seeing if I’m correct by either asking the parent for the age or trying to overhear any conversation involving the child’s age.

I guessed that this baby was about 2 months and eventually, as predicted, another guest asked how old he was and the mom answered that he was 2 ½ months. Score one for me! I was acutely observing the parents and tried to see any behavior differences between mother and father. Granted, I acknowledge that this might seem incredibly odd and maybe slightly scary that I observe people so much, but it’s what I do. It’s how I assess my environment and make decisions as to what I would or would not do or what I do and do not like. I’ve always been like this. There didn’t seem anything out of the ordinary with the parents and, I have to admit, the little boy was cute.

As the parents were getting ready to leave, I watched the mom put the baby into his carrier and I caught a glimpse of what the little boy was wearing and it got me thinking about how much money it takes to have a baby.

I recently had a conversation with a friend who’s expecting her first baby this year and we agreed that, in the first year, it’s not really that expensive because so many people get you stuff in that year – especially if it’s the first child – and that there just aren’t that many expenses.

But, the glance at the clothes and the carrier got me thinking otherwise. Sure, you get a lot of stuff at the baby shower…but what about after that? Don’t babies grow super fast? I mean, I have told Rob numerous times that I would love to have our future child/ren run around naked and shoeless for the first 5 years of their life. We’d save so much money! But I’m reminded that society wouldn’t really approve of that. Plus, kids’ clothes are so darn cute. Expensive, but cute.

The kids’ market (clothes, toys, furniture, etc.) has it made. I wish I had design talent to come up with something fancy and/or catching and useful to sell cause you’re (almost) guaranteed to make it. Aren’t I arguing against the very thing I wrote about a few entries ago about teens and the market place? Sigh…as I’m currently unemployed, thinking about a successful business venture sure sounds good to me right about now.