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The Cost of Raising a Child in U.S.

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The following is a collaborative effort with financial writer Marc Brown.

Nowadays many future parents are under a lot of financial stress due to the increasing cost of raising a child in U.S. The cost of raising a child is on steady rise. From the moment your child is born, there is a new expense. It maybe new shoes, new books, or a new bike. As a parent, you want to give the little one the best of everything.

A survey conducted by The United States Department of Agriculture has stated that the expenses for child care, education, and health care has multiplied. For an average income family the range is from $11,650 to $13,530 a year depending on the age of the child. Fortunately, they provide a handy Cost of raising a Child Calculator. (Who would expect it from the Department of Agriculture?) In the calculator, you enter your region, income, the number of children and it spits out the the annual expenses of raising your child. The calculator gives you a nifty graphical representation stating the Overall Estimated Annual costs of various things like housing, food, transportation, clothing, health-care, education and other miscellaneous expenses.

Knowing how much it is likely to cost is one thing. It isn't going to make junior any cheaper. So, here are some quick tips you can consider to reduce your expenses:

  • Use cloth diapers with snappy (replacing safety pins) instead of disposable diapers.
  • Buying branded-name things for kids may give you the satisfaction that you are giving your child the best. However, you can save a lot of money by sticking to brands only with foods, but with clothes you can try out some generics.
  • Reuse the products, clothes or toys of your first baby for the other ones. Buying another crib just for safety purpose is not a great idea as it takes up both your money and the space at home.
  • Try and make food at home for your kids rather than going out for dinner every other day. This will reduce the cost and you can also spend some time with your family at home.
  • Do not spoil the kids. You may want to give them everything even if you have to go without food. However, this may lead to a lack of understanding of the value of a dollar. Praise them and gift them valuables whenever they excel in something.

Take note that the expenses differ from city to city and area to area. The South tends to have the lowest child raising cost. Urban families incur a high expense in comparison to the rural ones. If you have more than one children the cost of raising the other child decreases, naturally.

If you plan your finances well, you can provide your kid with all the happiness and none of the financial burden.

Posted on March 25, 2011.

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8 Responses to “The Cost of Raising a Child in U.S.”

  1. Perfect Dad says:

    There was another study that recently said kids make parents unhappy and cost to much — nothing but disadvantages. I debunk it Did You Know? Your Kids Are Ruining Your Life.

    As far as the money part goes, I agree with most of the suggestions except the cloth diapers. They look good on paper, but everyone I know that tried them switched to disposable. Cloth are just too much hassle, and disposables don’t cost that much. In fact, we use brand-name diapers because we tried the cheaper disposables and they leaked.

    When kids come, the savings are forced. Vacations change from flying to driving. Re-using is perfect. Get old baby stuff from older kids, and from neighbours or relatives who have outgrown them. You should not have to buy much until they’re older and actually wearing things out instead of outgrowing. We never buy expensive brand-name stuff except when it’s on sale for end-of-season — then we buy larger sizes so it’s good for the next season!

    Kids do cost money, but don’t look at it like you’d be more wealthy without them. You would spend the money on something else and not have someone to tuck you in and change your diapers when you’re 80.

  2. With our now 18 month old daughter, I have to say that the financial costs haven’t been as ruinous as I’ve been led to believe that they would be during my entire adult life. It seems the “six-figure plus” costs of raising a child into adulthood have been around for many years, and a lot of that is the cost of a college education (a whole subject unto itself!) A child doesn’t automatically increase your car expenses, rent, or mortgage payments – and groceries aren’t a huge deal at least in the early years.

    As the both Perfect Dad and Lazy Man (there’s an interesting combination!) state: avoiding name-brands, relying on used, and avoiding the latest-and-greatest of anything is wise for both infants (who couldn’t care less about the brand name) and their doting parents (who probably need a dose of common sense financial wisdom anyway.)

    I agree with Perfect Dad on the diapers: disposables are king! If they cost a bit more, the cost is well worth it.

  3. Fascinating post. I’m terrified of having kids because they will undoubtedly be a huge expense, and make it hard to save for retirement. I may just skip having children so I can be sure to have enough money in my retirement account in case for some reason I can’t work later in life.

    Btw, shouldn’t the calculator be called “growing children” if it’s by the dept of agriculture?

  4. Perfect Dad says:

    Hi Cent: If you raise your kids right then they will take care of you (I hope — I’m not there yet but I know that I will take care of my mother). I know how you feel. I was very nervous about how my life would change after the first kid. But also about getting married, moving far away from my home city to another that spoke a different language which I didn’t know, about recently quiting my job to move again, etc. Life’s just a grand adventure!

  5. Day care is a hugely variable factor, and it’s not just tied to the general cost of living in the area. Our day care is much higher than you’d think based on where we live, simply due to scarcity. It definitely dwarfs all the other costs.

  6. Alan says:

    I have to disagree with the previous comments on cloth diapers. I currently have two in diapers and switching to cloth has taken $100-$150 off the monthly grocery expenses. Sure it requires a little more effort, but it is actually not that bad once a routine has been established.

    I was initially concerned that the increased water and electricity usage would offset the savings, but with 4 kiddos the washer and dryer are running all the time anyway.

    Another avenue for saving a lot of money is not using baby formula. I realize that this is not an option for everyone but for most people it is.

    Every Cent Counts: A 25 million dollar retirement portfolio, 5000 square foot house and a driveway full of luxury cars will never give you the joy of seeing your son cross home plate for the first time or your daughter “cooking” you meal in her toy kitchen. I personally know many people who have taken the same approach as you and find their lives empty as they grow older. But to each his own.

  7. […] The Cost of Raising a Child in U.S – Ouch. With the recent arrival of my second child, clearly I need to start saving more. […]

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