This post may contain affiliate links at no additional cost to you.
[This post may contain affiliate links at no additional cost to you.]
Jared and I were having the kid talk and decided to put it off until we were less stressed and financially independent. 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 a year for 17 years!
Mother flips what in the hell, 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 raising mini human beings.
We’re a frugal loving family. What if we raised a kid as frugally as possible? Neither Jared 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…
How does one afford kids given the family median income in the U.S. is $50K a year?
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…oh, it just occurred to me why a lot of Americans are in debt.
I could raise 200 dogs from puppyhood to a ripe doggy age with that kaching!3
I broke down the large numbers reported since I figured they were elevated, it’s clickbait material, right?
Upon closer inspection, these figures include possible opportunity cost. If you could have rented out the baby room for $500 a month then it would technically cost $500 a month for baby boarding. In our case, we would be out $1,000 a month because that’s how much our upstairs spare room brings in on Airbnb. Parents living out in the metropolitan part of the United States are in for a higher bill for raising children in comparison to the Midwest. In essence, knocking one right out of the ballpark – we’re down $12,000 every year right off the bat.
But that’s opportunity cost of income coming in. It’s not exactly money out of your pockets. A lot of people are uncomfortable living and renting out to other people so that single bedroom would be worthless.
What’s the real cost if we raised a kid as frugal as possible?
|Total Cost||$87,250 - $157,000|
|Food (no special dietary restrictions)||$25,000|
|Health insurance (vaccinations, preventive care etc.)||$15,300 - $50,000|
|Toys & fun||$1,700|
|Sunk-cost furniture (car seats, mattresses etc.)||$4,250|
|Clothing (diapers, gym shoes etc.)||$5,500|
|Child care & non-higher ed.||$8,500 - $20,000|
In the table above, I give my best estimates for raising a child one notch above bare bone circumstances. Jared and I don’t have any children so we’re giving rough ballpark estimates, we’re novices ok.
Food is the largest expense. If I included housing, food would be the second highest expense. I’ve seen Jared’s nieces and nephews eat. It’s hilariously cute how 3 chicken nuggets and a scoop of Annie’s mac & cheese fills them up. Yet it takes them over 1 hour to consume it because they’re goofing off constantly. $25,000 for 17 years results in less than $1,500 per year. With breastfeeding and home cooking every meal, it seems like a doable feat, especially when kids are young. They would get about $4 a day for their food budget which is just about how much the current food stamp recipients receives.
I 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! 🙃Since we own our home we have enough square footage. There are more rooms than there are humans in the house so a space to encase a small human doesn’t sound too difficult with the amount of closet space we have. 😉
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. Obviously, these figures don’t include inflation or price increases. It’s costing us $900 this year and a little more next year.
I could have cut health insurance but I thought…raising a kid frugally, not destitute and without coverage. 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 sports (school required proof of insurance) etc. The worst thing for me was just an ear infection and a few fevers.
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 🙂 I didn’t leave much for furniture because there’s resale value in a lot of them and people are always giving out great stuff. You can check out the older income reports for all our random thrift and roadside finds!
To an extent, $5,500 for 17 years is an exaggeration. If you don’t care how your child looks, there are pieces of clothing going for $1 at the thrift store. 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.
Childcare & non-higher ed.
Childcare is a heated topic. (Edit: I’m thinking optimal frugality is finding grandma and having her sit for us. That’s why I marked it so low.) Or in our preferred case, Jared would be FIRE’d already and stay at home.
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…who in the world follows that!
When I see my nieces and nephews go to daycare I think…why…? I didn’t set the house on fire when I was left alone. It’s not like I was going to do anything stupid like steal someone’s car. All I felt was alone and afraid for the first year in the U.S. then I got used to it. A kid is malleable. I learned to get over it and I learned to be resourceful over my fear and loneliness. I sat quietly and read a ton of good books while waiting for my parents to come home.
Kids probably need a laptop for school these days. There are now government subsidies for low-income children and sometimes they can get free laptops as donations.
My mother told me the greatest thing about the western world was the free education. In China, you had to pay for everything and all supplies too. Lots of poor children are already off to a disadvantaged start if their family can’t afford basic education.
That’s why I scoff whenever the media reports how inequality in America is rampant and ruining all that’s holy.
Honestly, if you think about it, being born in the westernized world is as pretty privileged already. If test scores stink then ask little Susie to try harder. Tell her at least someone cared enough to make and put a test in front of her face.
This is an awesome country.
My parents paid for school supplies. I was left to my own devices for the rest of it, sink or swim.
Fun fact: I don’t know how to swim…hahaha…guess I’m sinking.
Whoops, I’ve moved into rant territory…
Anyway, public school is free. School buses are free. Tutoring is free if you can get it after school or with a sponsor. Doesn’t cost anything to fake “well-roundedness” to the fatuous college board by doing the deed like picking up trash or volunteering.
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 child transportation a healthy $1,000 a year budget. See how expensive it is to give a teenager a car.
In my case, my parents adored the fact that I was able to buy them youth priced fares if they ever needed to go anywhere. I helped them shave off 50 cents per trip so I was saving them money by robbing city government! I bet our transportation cost for a family of 3 in San Francisco cost less than $1,000. Plus, I was a kid. I didn’t have anywhere to go besides home.
Goose egg! Vacations are not necessary.
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? I don’t know but the total comes for 17 years comes out to my estimate of $87,250 in 2017 dollars.
That’s not bad!
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.
With the changing landscape of health care, this number now swings wildly from 10-15 years ago.4
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 I feel blessed now.
However, $87,250 to $157,000 is way less than the $250,000 quoted to raise a kid so I am questioning the validity the number they spat out. Raising a child frugally from age 0-17 cost around $5,132 – $10,000 a year out of pocket. If you added back housing at $60,000 for 17 years the total still comes out to be $217,000, just a few tens of thousand shy from $250,000. Still expensive but staying with the frugal course does helps cut costs down.
I’m getting over the sticker shock for now…but for a more accurate analysis with someone who has experience with children, read 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?
Top $ Resources That I Use
Personal Capital: Sign up and use their net worth calculator for FREE. They are a free financial service platform that helps you analyze your portfolio, retirement, and financial health all on one simple & secure account.
Ibotta: I thought this app was overrated before trying it myself. The “any item” promos instantly save you money after scanning your grocery receipt. Ibotta also hosts promos and contests for your team to save more by working together. One of the guys on my Ibotta team list has earned and saved over $100,000 using Ibotta. You can get $10 if you sign up through my link.
Robinhood: A stock trading smartphone app that lets users buy and sell individual stocks for free, without any hefty trading commissions. Individual stocks are more volatile so do your research and invest wisely. You can get a free share of stock when you sign up.