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Inflation and the Rising Cost of Having Kids

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LukeEvery year, the government puts out an annual report on how much it costs to raise your child from birth to age 18. And, every year, the cost goes up. CNBC, via Yahoo! Finance, reports that a child born to a middle income family in 2010 costs $287,000 to raise, once you consider food, shelter, transportation, and other expenses — and adjust for inflation. This number doesn’t even include the cost of giving birth, and it certainly doesn’t include college costs.

That’s quite a lot of money. And, of course, there are a number of issues that need to be addressed before you decide to have children.

Can You “Afford” to Have Children?

The yearly cost of having children can be a deterrent to many in terms of having kids. Some of the experts suggest that you should wait until your finances are in order before you begin having kids. Some of the suggestions include:

  • Pay off debt
  • Begin saving
  • Have a career (at least one of the parents)

Many suggest that you budget for your baby, and plan ahead for expenses. However, other experts agree that it’s impossible to completely prepare for having children. Do you really need to have a house when you have a child? Is it really necessary to have all your credit card debt paid off? Do you really need to have a good job? All of these are questions you need to answer for your yourself. But it’s important to be aware of your financial situation, and realize that raising children comes with its own costs — financial and emotional. (You need to factor in your emotional availability and ability before having children as well.)

Do You Really Have to Spend So Much?

Of course, there are a number of people that don’t think you need to spend so much to raise children. From activities to vacations to clothing to food to transportation, many people don’t think that you really need to spend almost $300,000 over the course of a lifetime to raise children. It’s possible to live frugally, even with kids. Some of the ways that you can spend less as you raise your children include:

  • Second-hand clothing and other items
  • Low-cost family activities, including picnics, bike rides, and game nights
  • Choose a low-cost place to live
  • Limit extracurricular activities
  • Plan meals and eat more at home

There are a number of ways to spend less, depending on how you approach the matter. For many middle class families, spending so much on raising children isn’t really necessary. However, how much you do spend depends on factors including where you live, how much money you make (often, costs rise with the expectations of wealth), what activities your children participate in, and what activities you engage in as a family.

It’s possible to reduce the costs of having children with planning. If you want children, consider how you can make the whole process more affordable. However, not everything has to be “in place” before you start. You can never be completely ready for children.

What do you think? How much do children cost? Are they worth it?

(Photo: CC-BY-CarImages)

{ 18 comments, please add your thoughts now! }

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18 Responses to “Inflation and the Rising Cost of Having Kids”

  1. I cite being childless as the foremost reason my wife and I have been able to save more than the average couple our age. We didn’t choose not to have kids for financial reasons, but still, the effect is clear.

    • Courtney says:

      Seconded. The financial planner my husband met with last year as an employer perk was astonished at the size of our retirement accounts and other savings. And we’re still taking 3 vacations this year.

  2. My girlfriend really wants at least 1 kid so we’ll see what we can do to keep the costs low while providing for a good life. I’d like to see what is inside that number and how they actually come up with it to see if I’d be able to save money or not.

  3. Mary says:

    I understand that children are not free, but I think the government estimates are inflated. I have two children, both in their late teens, and have spent less than half what this study concludes a child costs for the two together, even factoring in medical care and the like.

    Kids are as expensive as you make them. If you have to put them in brand new, brand-name stuff, of course they cost a ton. Instead, you can educate them (I started young, making them think critically about the commercials for toys and such by asking if they thought the toys would work as shown at home) about wise consumption.

    My children enjoyed thrift store shopping because they had free reign and cost was rarely an issue for the things they wanted. They learned delayed gratification by waiting for birthday and Christmas for more expensive or new items they desired. They earned money around the house (aside from their family responsibilities) to buy what I didn’t provide.

    We cooked at home a lot. At one point, I was a single mom with two school age kids, feeding us well on $25 a week. No government assistance and sporadic child support. We would eat out once a week because I had a night class. It was our treat, not the norm.

    And, my kids played baseball and softball, had desktop computers when they hit 14 and jobs at 16 (along with each a cell phone that they paid for). My oldest is now out of the house and self-supporting.

    If you feel you have to give your child everything they want or that their peers have, rather than teaching them values of critical thinking, patience and thrift, they will be expensive. If you’re willing to take time to teach them why you make the financial choices you do, you’ll not only save money, but raise fiscally wiser kids.

  4. Judith says:

    Here’s an idea: why don’t the upper classes hire drones to reproduce and raise the next generation of the human race so your acquisition of wealth and pursuit of enjoyment won’t be impeded by anything as rude as a child? Oh wait — that would cost money. Oh well. Kids, the future… who needs them?

    • Mike says:

      Hopefully in the future our robot slaves will do all our jobs for us. Then we can just laze around and reproduce.

  5. Phil says:

    Simply put, you do not have children for financial reasons. You will never “make money” in the way the world measures financial value. That being said, as painful, financially, as it can be (I have two in college with a 3rd a few years away from the same.), children are “worth” far more than any number of vacations you can take, or any amount of money you can save. And, the most important investment you can put into a child is your time. So, yes, it is expense to have children, but worth every penny, no matter how you use those pennies.

  6. ImpulseSave says:

    I think that the cost of raising a child is really a ridiculous number to just throw out there. Sure, your expenses will increase and you will likely have to sacrifice a lot of things you used to enjoy for yourself in order to provide. However, thinking back to my own childhood, I really think that my parents spent WELL below this alleged figure with simple cost-cutting measures. By just implementing a few simple guidelines, you can have and raise a baby for much less than $300,000, and even have fun doing it!

  7. Jon says:

    Kids…the biggest hassle that you wouldn’t trade for the whole world.

    I fully respect anyone’s decision to have kids, or not. That being said, one of the greatest personal joys on this earth after marrying my wife has been raising two, and soon to be three, little girls.

    If it really costs almost $300,000 to raise a child, then how do people in other countries, who will not make that much money in their lifetime, raise four or more children? It is a simple question of what we define as a “need”.

    Do kids “need” designer clothes, private education, their own room, a new car, a smartphone, a basement full of toys, computers, video games, and restaurant meals with plastic toys soon forgotten in the basement clutter, or do they need love, shelter, quality time, instruction, food, adequate clothing, an understanding of how to earn and save money, spiritual guidance, and an understanding of the value of being a respected citizen with a good name?

    Further, what about economies of scale with multiple children? And last, what about the value of the love they show when they learn to give back a portion of all they have been given by caring for us and putting up with us in our failing years? In summary, I believe the math is too close to call, all factors considered, and depending upon what “needs” we choose to provide for.

    With a bit of tongue in cheek, I also wonder that should a married family choose to have children and go to one income, can the stay at home parent use the $125,000 per year that these same statisticians estimate as the actual market value for being a stay at home parent as an offset to the $300,000 that the child costs? If that is the case, then the entire cost of raising a child is paid off by the stay at home parent in less than three years. Using this math, my wife, staying at home with three children, will have them paid off in nine years, and age nine to age 18 will make us millionaires! Who says kids are expensive? *wink*

    Hats off to each of you, whatever your decision. Those without children, may you consider using your wealth to change the life of a child in some way, either here or in another country. The dividends are beyond description, and it is a fine tribute to those who spent $300,000 to help raise you.

    • Shirley says:

      Wonderful post, Jon… I love it!

    • Courtney says:

      “Those without children, may you consider using your wealth to change the life of a child in some way, either here or in another country.”

      We do. We sponsor two children overseas, as well as donate to classroom projects in high-poverty schools in the US through Donors Choose.

    • David says:

      Jon a kid costs well over half a million dollars. For example instead of spending $600 per month or $7,200 per year on the kid you could have invested that same money in your house at 12% compounded annually, then after 20 years you will have $518,777.59

  8. Olivia says:

    As our two were both premies, we had a big financial hit upfront. But absolutely nothing like the government figures indicate.

  9. Mike says:

    Or you can move to a place with a lower cost of living. Like Texas.

  10. Karen says:

    This is an interesting thread… I agree with several sentiments, the bottom line being, you don’t have to spend what’s expected, which I agree is pretty exorbitant. I’ve raised 4 kids in a pretty affluent county. My kids all love to shop at second-hand stores and Goodwill. (And they all look pretty good:) We cook at home, a big savings. We sew, we carpool, we all have to cooperate a lot more.

    The most expensive part of raising them has been all the lessons. But what are you going to do… they need to explore their gifts and talents.

    Now that 2 are grown, and 2 are in college, We are really strapped. But we’ve made choices accordingly. I work from a home office and share a car with my husband.

    Having children really isn’t a financial decision, it’s a heart choice. Once you make that choice, you just make it work.

  11. Shirley says:

    Having raised five children (who are now ages 50 down to 20) in a middle income family, we have had more experiences, traveled more avenues and shared more joy than any amount of money could provide.

    We lived reasonably frugal lives but never went without needs, although wants were often bypassed. To each his own is the reason and choice of whether or not to have children. We have never regretted our choice.

  12. Kris says:

    It’s hard for me to put “kids” and “afford” in the same sentence. I get it, but the decision to have kids is usually not a financial one…until you have them and realize just how hard it can be to make ends meet. I wouldn’t trade my kids for anything, but I sure wish they came with seeds for a money tree to plant in the back yard…:)

  13. David says:

    Never marry which leads to kids which cost well over half a million dollars due to a magical thing called compounding.


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