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Raising a child is one of the most important parts of building a family. Having children can potentially complete and makes the experience of having a family worth it. However, raising a cute bundle of joy is not an easy task. Raising a child is expensive, and in the US, the cost is even more expensive. In fact, there is a decline if the birthrate for the first time in the history of the United States.
According to the US Department of Agriculture, the average middle-income family ($59,200 – $107,400) with two children may expect to spend approximately $233,610 per child until they reach the age of 17, and not accounting to expenses used before birth.
This figure does not account the college expenses, which costs $45,370 for private and $20,090 for the public. Data used in this study is from 2015, so the overall cost is expected to be even higher. In this article, the cost of $233,610 will be broken down into the ten most important categories.
What’s if we raised children as cost-effective as possible?
Oh boy, did I get sticker shock when I saw how much it would cost to raise a child. A quarter of a million! Not including college! That price just goes up as you move on up the social economic ladder.
For the average middle-class to upper-middle family, the costs of raising a child topple over an estimated $250,000 going from birth to 17.1 That’s not including higher education!
You’re lucky to be out $15,000 per year for 17 years!
Mother flips, I’m still in sticker shock.
But given that there are about 7 billion people in the world and 300 million of those people are in the United States alone, I don’t think sticker shock has stopped or prevented anyone from having mini human beings.
How can a family afford kids given the family median income in the U.S. is $50,000 to $80,000 a year?
OK, we are a frugal loving family. What if we raised a kid as frugally as possible?
Neither hubby nor I grew up with anything fancy. We both went to public school. My school lunches were reduced lunches. I paid 25 cents for cafeteria food of one mystery meat taco pocket, milk, apple, and green beans. And I have never known any kid who ate the cafeteria green bean…
If it costs $16,000 to raise a kid and the median household wage in the United States is $52,2502 then that means 30% of expenditures are going towards the little one alone!
Plus, that’s post-tax! So 20% to taxes, 30% to housing, 30% to the kid and 20% that needs to include everything else from transportation to food.
What’s the REAL estimate if we raised a kid as frugally as possible?
In this article, I broke down the large numbers reported since I figured the $250,000 needed to raise a child were elevated, it’s clickbait material, right?
Upon closer inspection, these figures include opportunity cost, which is why it seems so high.
I give my best estimates for raising a child one notch above bare bone circumstances:
The biggest portion of a middle-income family is being allocated to housing expenses, according to the US Department of Agriculture. This is the most expensive among the expenses in rearing a child and eats up to 29% of the total cost to raise a child.
Housing in urban places is even 27% more expensive than their rural counterparts. Low-income families usually spend $3,160 on average while a middle-income family spends $3,680 for housing expense per month.
Surprisingly, the bigger your family is, the bigger your savings will be when it comes to housing expenses. Basically, when it comes to housing expenses, the fewer the children, the more expensive it would be.
The cost of housing usually doesn’t change from the moment the child was born until the child is 17. A room is a room. If you are looking to start a family, look to reduce housing expenses by moving to a lower cost city with cheaper housing in a fair school district.
For our family, we put down a very inaccurate $0. I’m planning to have our kid sleep in the same bed as us until he/she goes off to college. It can’t get any more cost-effective than that, think of the compounding! 🙃
Just kidding! But for a frugal family who doesn’t need a huge home in the center of downtown (aka less expensive housing), we can get away with $5,000 per year if you move to the suburbs.😉
A local apartment here is $600 for 1 bedroom. $750 for 2 bedrooms. $1,000 for a 3 bedroom apartment. From $1,000 – $600 = $400 x 12 months = $4,800 which is about $5,000 per year.
Food is the second most expensive expense when raising a child, but this is also the part where a family has more options to save. According to the same data from USDA, 18% of the total cost to raise a child goes towards food. In addition, as the child grows, so is food consumption. According to the result of the study, the most expensive child to eat is a teenager. Food consumption for low-income family ranges from $1,310 to $2,300 based on age. Middle-income families spends $1,580 to $2,790.
There are a lot of ways to save money and time in preparing food for the family. Frugal recipes that are available for as low as $2 per serving will help you save your budget. Instead of eating out, make cooking your food at home a habit.
Rough math, $4 x 365 day = $1,460 x 17 years = Almost $25,000!
Cooking in large batches would save you time and resources by freezing and reheating. You can also try preparing a meal plan for a week for easier food preparation. You would get about $4 a day for children’s food budget which is just about how much the current food stamp recipients receives.
Health care coverage accounts for 9% of the total cost of raising a child. A low-income family usually spend $820 to $910 per year depending on the child’s age. Middle-income families spend from $1,180 to $1,300, again, depending on the child’s age. It is worthy to note that as a child ages, the coverage needed for health care also changes.
This number was a relatively realistic one if you and your family have an employer health plan. It currently costs each of us $900 a year to be insured so I simply multiplied $900 x 17 years.
Health care is a cost that needs to be planned ahead of time. One of the best ways to save is to get health care sharing or insurance coverage where the cost of other’s health care is shared.
Health Savings Accounts (HSA) basically an emergency fund for medical expenses, is also a good option, paired with healthy choices in food and lifestyle.
I could have cut health insurance to $0 but I thought…raising a kid frugally, not destitute and without medical attention. My family went without health insurance for the majority of my life. Thankfully I was a healthy and robust child. No leg sprains, no appendicitis, didn’t participate in sports etc.
Toys & Fun
I almost put $0. I’ve seen kids live on rocks and basic TV as entertainment so it’ll be OK. Spongebob isn’t everything.
My parents never brought me anything (they did in China but not in America) and we never celebrated holidays or birthdays. I was happy to have 3 working TV channels from the television we found on the street. It was an utmost boring childhood but doable and I turned out semi-normal.
I would give an extra $1k in the estimates for a used laptop. Any school expenses like field trips are split between child care and misc, not in toys & fun.
My parents found all of our furniture on the street. They never purchased anything furniture related, not even a stool, because they would wait on their luck or go without. If they needed anything, they ask the neighbors or just look around on the street after dark. They found some pretty great stuff too. Mattresses are super expensive for what it is: a block of foam and springs.
We found all of our mattresses on the street and used it for 10+ years! I’m not even sure what’s the total age of the mattresses we found but they were lumpy when we got them. I woke up every morning from age 13 to 17 with back and neck pain but it was doable and it saved us money.
Car seats and cribs are likely sunk cost items. Regulatory safety change and improvements regarding baby furniture happen all the time so buying old cribs and car seats may not be the best idea. These items are sunk costs. Other than that, for side tables and lamps, head to your local thrift store 🙂
Clothing takes up 6% of a family’s annual budget and would be lesser if the family have more kids. The reduction of cost in a big family is because of younger children “inheriting” old stuff from their older siblings. A low-income family spends $670 to $720 per child annually while a middle-income family spends $750 to $830.
To an extent, the savings can go way down. I put down $5,500 for 17 years which is still is an exaggeration. If you don’t care about the latest fashions, there are pieces of clothing going for $1-$10 at the thrift store which can be passed down.
To save on clothing expenses, parents can shop on least known brands. In addition, talk to your children early on about how getting caught up in known brands are not really practical and should not be a base on identity. Shop only if necessary, or if clothes are on sales with really good deals.
My annual expense for clothing as a teenager was probably $200 per year.
I heard cloth diapers and hand-me-downs from family are cost effective. If done frugally, we will likely inherit toys and clothing from friends and family who has already stepped into parenthood.
My mother told me the greatest thing about the western world was free education.
While a public school will certainly allow you to save more money if you have more child. Education is also a factor when a couple chooses their neighborhood. The best way to save is to choose an up and coming neighborhood in districts with higher quality schools. The direct cost of education, I put down $0.
I was left alone after we immigrated to the U.S. so I didn’t give childcare much of a budget. It is illegal in the United States to leave a child alone but…haha…my immigrant parents did not follow that! I sat quietly and read a ton of good books while waiting for my parents to come home.
Child care, for those who want to do it the legal way, is the 3rd most expensive item in the annual budget. This item takes up 16% of the total cost to raise a child. This is also the only item that decreases over time as the need for child care decreases per year.
First 5 years of raising a child are the most expensive, as it covers the fee for daycares, nannies, and other. Low-income and middle-income families spend $2,080 and $2,870 in the first five years respectively on child care. There are government subsidies available but I would say until K-8 funding of education kicks in, it will be about $10,000.
Depending on the location, there should be locally subsidized buses. Children under the age of 5 rides for free. Not everyone lives in a region with a robust transportation system so I gave children related transportation a healthy $1,000 a year budget. Plus, I was a poor kid. I didn’t have anywhere to go besides home.
Transportation takes 15% of the total cost to raise a child, getting up to $1,200 t0 $1,690 for lower-income families and $1,790 to $2,270 in the middle-income families. Just like other expenses, this one will grow as child ages. This accounts to commute expense in families with no automobile while fueling and car maintenance for families with the automobile.
When a child turns 17, he or she started traveling more, which makes the cost even more expensive, with or without automotive. The additional car insurance is also one of the reasons why this expense grows as child ages.
See a real life example of expensive it is to give a teenager a car!
To save money in transportation, free alternative to traveling like using bicycles is encouraged, especially in bicycle-friendly distances.
A very rough $0. I mean vacations are not necessary, especially when things are tight sadly.
I mentioned before we don’t have children so this category will fit whatever I haven’t even fathomed yet. Breast pumps? (What are those?) Tampons for girls? A suit to prom for boys?
During a child’s childhood to teenage period, he or she will develop hobbies, use entertainment, and other cost. Low-income families spend $450 to $740 per child annually, depending on age. Middle-income families usually spend $830 to $1,110. The age bracket of 9-11 is where families spend the most, with the expense declining after reaching the 12-14 and 15-17 age bracket, where most teenagers seek for jobs.
This expense, which is labeled as “miscellaneous expenses” takes up 7% of the total cost to raise a child. USDA described this as expenses toward “recreation, entertainment, and other costs. Personal care products, entertainment, or sports equipment belongs to this category.
I Cost My Frugal Parents…
My parents probably spent $30,000-$40,000 raising me since they managed it pretty bare-boned obtaining second-hand/free furniture, free school lunches, buses and very low to no medical coverage. I was a very healthy child with no allergies, learning disabilities or physical care needs.
It makes me question if creation is worth it in a family that is constantly worried about balancing the budget line. It seems like an unnecessary pain to the children who were dropped into that situation where they have to live on the razor’s edge too. I was sort of miserable while writing parts of this post thinking back to my kid years but life is more than just money.
For a more accurate analysis with someone who has experience raising their children, read my friend Joe’s analysis.
Readers, this is where the commentators need to make up for my estimates. Does anyone (dialing experienced frugal parents) care to give their estimates on how much it costs to raise a child?
https://www.usda.gov/media/blog/2017/01/13/cost-raising-child [For short version]https://www.cnpp.usda.gov/sites/default/files/crc2015_March2017.pdf [PDF | For the complete source with data]
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