After my long LONG 2nd baby post yesterday, I was met with this article on MSN. The following quote comes from it:
Every newborn child is a bundle of joy. But you'd better have a bundle of cash on hand if you want to raise one.
Followed by this statement:
Families making more than $74,900 a year will spend a whopping $289,380 to raise a second child born in 2006 through age 17, estimates the Center for Nutrition Policy and Promotion, a division of the U.S. Department of Agriculture. Higher-income families in urban areas in the West will spend the most, $304,740.
Makes sense, right? The more you make the more you spend... It is sort of true I suppose... We all want what is best for our kiddos. It doesn't matter how much you make... As this article notes:
Though not as steep, the figures for lower-income families are just as unsettling: $197,700 for families earning $44,500 to $74,900 and $143,790 for families making less than that. That breaks down to nearly $15,800 a year from birth to age 2 for families in the $74,900-plus income bracket. This is no back-of-the-envelope guesstimate. The survey involves interviews with about 5,000 households, four times a year.
Of course the more children you, the more money spent on each child goes down... Seems like a good thing right?!
The cost per child goes down for larger families. A child with no siblings costs 24% more than one with a sibling, for example. As a percentage of household expenditures, an average couple will spend 26% on an only child, 42% on two children and 48% on three children. As the child ages, costs rise through age 5, fall slightly between ages 6 and 11, and then top out at $16,970 a year from ages 15 to 17.
My friend, Kim (ironically with the last name SCHMIDT), had it all when we were growing up! She was an only child. Her parents were spending almost a quarter of their money, if not more, on her whereas I was having something like 1/16 spent on me (and the hand me downs - oh gawd... my sister was born in 1965 and I was born in 1973... I spent much of my youth looking like I belonged in another era, literally!!!)
Gotta LOVE that the article goes on to say, we may even SPEND more...:
Sobering? No doubt. Misleading? Yes. The study doesn't take into account certain expenses incurred by some families, such as heavy medical bills or pricey private schools. It's a composite average, and, by definition, that means your numbers will be a little (possibly a lot) higher or lower. And because the survey ends at age 17, it doesn't take into account the millions of college students who are supported in part or in full by their parents. In 2020, you'll need nearly $225,000 for a private college or $105,000 for an in-state public university.
We started Matthew's college fund when he was something like four weeks old and Connie, the nice lady from Edward Jones, ran the numbers for in-state and out of state tuition for college on our little darlin' - talk about sobering!!! It was not even 'WELL that is a long way off and he could turn out to be the next Peyton or something like that...' It was more like 'OMG, all extra money we have DIVERT DIVERT DIVERT!'
The study also doesn't consider lost income that occurs when one parent stops working or takes off several years to raise the children during the early years -- or takes a lesser-paying job with more-predictable hours.
"Look on the bright side: There are ways to trim the expenses."