Anticipating the Costs of Raising a Child

Those of you who have children know how expensive it can be to care for a growing family; however, you might be surprised just how expensive. According to the US Department of Agriculture, the costs associated with raising a child, from birth to the age of 18, has risen nearly 40% over the last decade.  Recent reports have determined that the cost for an average two-parent, middle-income family to raise a child to adulthood now stands at $226,920 – a $60,000 increase from 2001.  What’s really interesting about this number is that it doesn’t include the cost of a college education, which has increased exponentially over the last few years.

Even before the release of this report, many people had begun to reconsider having children.  A poll of women found that 43%of respondents are waiting until they feel financially stable before starting, or expanding, their family.  The protracted economic downturn, coupled with a tentative job market, has made many people re-examine their personal and financial goals and opt for a more conservative approach.  This shouldn’t be surprising. Every major expense associated with raising a child has risen over the past decade.  For instance, transportation has had a profound impact on family expenses, with consumers paying, on average, 85% more per gallon of gas over the last decade.

Some of the biggest costs associated with expanding a family occur within the first few years.  For example, a growing family needs room to do just that; so many families opt to move on to larger apartments or houses. Even in a soft housing market, that can be an expensive proposition. But housing is just one issue.  Families also spend a lot of money on new clothing, children’s furniture, and a host of other expenses they’ve never had to deal with before.  In particular, the cost of diapers caught me off guard.  In the first year of their new baby’s life, the average family spent over $1,500… on diapers.  That stinks – in more ways than one.  Another challenging expense is child care. In 2010, the cost of putting two children in child care for a year exceeded the median annual rent payments in every single state, according to the National Association of Child Care Resource & Referral Agencies.

We live in a new and volatile economy.  According to a recent report from the Census Bureau, median household income has actually fallen by 7% over the past decade. When you consider that most families now require two incomes to keep pace with the new expenses we’ve just mentioned, decreases in take-home pay can have a devastating effect on the family budget.

Don’t worry.  You can still have a family. You just have to create a financial plan that considers the possible effects on your family’s budget.  As you get your financial house in order, most experts recommend that you start a ‘Child Fund,’ which consists of at least $5,000 to $7,000 to cover those large purchases you might need to make.  You’ll also have to plan for the almost $14,000 a year you’ll need to raise your child.  The best way to prepare is to develop a budget.  If you haven’t done this before, or if it’s been a few years, you can contact one of the many non-profit credit counseling agencies, likeCambridge, for assistance.  Your counselor will work with you to develop achievable goals, and help you choose effective strategies to meet them.

Budgeting is just one part of the picture. You’re also going to have to find innovative ways to save on everyday items, and you might need a little advice along the way. Fortunately, there are hundreds, if not thousands, of family and financial blogs available for free on the internet.  A few have really impressed me, and I encourage you to visit them.

  • takes an analytical approach to dealing with family finances by offering education on a variety of topics, ranging from budgeting to real estate.
  • is a powerful resource that helps all individuals ‘Live Large on a Small Budget’ – sounds like advice we could all use.

These are just some of the sites that have caught my attention, but if you’re considering starting a family or adding to your brood, I encourage you to poke around the web and see what you can find to help you plan for the costs you’ll incur.


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