Cost of Raising Kids?

Chet - posted on 08/23/2013 ( 10 moms have responded )

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How much do you think it costs to raise a child? Previous estimates have been in the $10,000 to $15,000 per kid per year. The Fraser Institute (in Canada) just came out with research that says it's more like $3000 to $4500 per year per child. Less if you're a real penny pincher. What do you think?

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It sounds a bit low to me, even if you take out the cost of daycare and healthcare for US babies, but I think if you are taking the entire cost of raising a child for 18 years and averaging it out per year, It might be okay--that would be $54k-$81k for the entire 18 years. As mentioned earlier, they get a lot more expensive as they grow.

For infants, food is usually negligible. Furniture, toys, & clothing can be purchased 2nd hand. Cloth diapers can even cut diaper & wipe costs to nearly nothing--a $400 stash often lasts through potty training.
Toddlers aren't bad either--secondhand clothing, toys, & furniture are still okay, and you are no longer dealing with diapers and not yet into many of the expensive activities. The biggest expense is usually the car seat.
Once they start school, it gets tougher. Even in public schools, fees & supplies usually run at least $100/year. Plus, even if children are using "free" public school extra curricular programs, there are usually costs associated with them for equipment, entrance fees for competitions/games, travel expenses to attend competitions/games, tickets to watch them compete/play, and financial obligations to contribute to team parties, snacks, trophies, etc. They also need new clothes--second hand is more difficult to find because kids wear their clothes longer and wear them out. By the time they are ready to be donated, they look old and used. Second hand is still fine for play and probably for formalwear, but they'll need at least a few new pieces for school. food costs increase as well.
As teens, you will have to buy or rent whatever musical instrument they choose (unless they choose voice, but many public schools don't even offer voice anymore), and the cost for sports/extracurricular activities goes even higher. They start to eat A LOT more.

Denikka - posted on 08/25/2013

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That sounds about right for my kids....for their first year anyways.
For my first born it was about:
Breastfeeding-$0
Diapers-about $20 a week-equals out to $1040 a year
Wipes-a 12 pack box per month (about $18)-equals out to $216
Clothes-everything second hand, so at $50 per size change, it works out to roughly $200 in clothes in the first year
Shoes-$100 (boy went through shoes like crazy!)
Regular food-Negligable, but lets throw $50 a month in there to equal out to $600 a year.
Carseat-$200
Sleeping area-we cosleep, so no cost there
Play pen-got ours as a gift, so no cost
Exosaucer-$150
Second hand swing-$25
Assorted toys-mainly second hand, much was bought for us, so maybe $300 a year
First birthday-$400 for party and presents
Christmas-$300
Easter-$100
Halloween-$75 for candy and costume
General medical stuff (In Canada, so medical visits are covered)-cough syrup to circumcision (first born was a boy)-$300

So that sits me around $3700.
If we had gotten a crib and formula fed, it would have been more like $5500-$5600. Add in all the gifts, if we had had to pay for everything ourselves, more like $6000-$6500.

I do think that the estimated of $10,000-15,000 are greatly overrated for younger kids. Under school age (4 and under), a kid doesn't need to cost that much and there are many ways to save. I think, especially in the first year, parents tend to go a little crazy, especially with their first child. With all the gadgets out there, it's easy to go overboard. Between diaper genies, wipes warmers, all brand new clothes that the kid wears twice and no longer fits, $700-$1000 cribs,another $1200 for the rest of the matching furniture set, $600 carseats, $700 stroller, $250 baby bag, swings, exosaucers, assorted jump start stuff, $400 on baby proofing everything, pure organic baby food flown in from the pristine hills of Italy or whatever, pure organic baby soaps and lotions that you only use once or twice cause your kid has a reaction to them, the list is endless.
And there's always going to be people out there who believe they NEED all that stuff. And of course, to those people, it would be unimaginable to only spend $5000 for their kids first year, because their *essentials* list comes out to closer to $15,000.

So for the first couple years, I do think that people tend to overspend on their kids. But once you get a kid into school, that's when the costs really start mounting with the extra lunch foods, the school supplies, trips and assorted extra fees, sports and extracurriculars tend to start about the same time and those get PRICEY!!, along with day to day living. At that point, $15,000 is a starting point, for necessities, then you can add on all the extras.

But I would tend to agree with Mary, there are too many factors at play to accurately estimate what a child will cost. What's essential to one parent, is not for another.

Lady Heather - posted on 08/24/2013

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The intentions of the Fraser Idiotstitute are always the same - make poor people look like whiners. Lol. Once a year they also like to make poor people feel like crap by rating all the schools in BC. The only ones that ever rate well are the expensive private schools. My schools never rated well and I had a fantastic education. Also I didn't live in a dorm room surrounded by drugs like some people who went to the well-rated schools.

Probably about 95% of Canadians think these people are full of crap.

Lady Heather - posted on 08/24/2013

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Also something I might not think about because I don't have to as I never plan to work again (lol), but somebody on the CBC comments section for this report mentioned the fact that school aged kids require some form of care in the summer and around Christmas and over spring break. So probably at that point most parents do require child care. But because the kids are older that ends up coming in the form of camps and things. So the Fraser Idiotstitute says "Summer camp? FRIVOLITY!" and declares most parents don't use child care.

Where do working parents put their kids in the summer? Or are they actually suggesting that one parent in every family stay home for 18+ years? Because that sounds fun to me, but I don't think it's every woman's cup of tea.

Oh right, I forgot. We are all supposed to have a grandparent to look after our kids. So I guess that means after I'm done staying home to raise mine I have a 5-10 year break before it's time to start spending all day looking after my grandkids too.

Jodi - posted on 08/24/2013

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When I read the report, I got the feeling that they were evaluating absolute base costs for the purposes of welfare. I know that in Australia, they evaluate costs of raising a child for the purposes of child support too, and when doing this, they do actually take into account standard of living based on your wages.

Basically, this estimates that the cost to support a child under 12 if your income is BELOW the poverty line is about $6,000. For a child over 12, it is more in the range of $8000. This would NOT include daycare, because our government also subsidises daycare. This is an estimate purely for welfare and child support. So because this is what people BELOW the poverty line spend, we could probably say it is basic too. It is also a hell of a lot more than this study quoted in the OP, so I honestly question the study's accuracy and intentions.

If you have multiple children, I will agree that the cost of raising each child reduces a bit. it does cost less per child to raise 3 children than it does to raise one. however, $3000 - $4500 is a ridiculous estimate. (Please note that this Fraser Institute report stated that the cost of living in Australia and Canada was much the same, so these figures are relevant).

Lady Heather - posted on 08/24/2013

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I think that "study" is pretty lame. I read the thing. I don't spend an insane amount on my kids. The only frivolities we have at the moment are preschool, dance class and family holidays. But I spend about half their estimate on food. I like to make sure we have lots of fresh produce. I buy in season and shop sales, but it still adds up. They are still just little. I can't imagine how much I'll be spending on food when they are teenagers!

I think it's pretty silly to not include housing. If I didn't have kids I would most certainly NOT live in a large home like I do now. Where I live the difference in cost is not huge, but in a place like Vancouver the difference between a 2 bed and 3 bed place could be hundreds of dollars a month on your mortgage. Yes, you get more in return down the road. But you do have to be able to afford the payment in the first place! Won't even touch the child care thing. I'm a SAHM and that made me go "whaaa???".

Basically I'm not really sure what the point of the whole thing was. Yes, some people raise their kids on the cheap. But I think most of us hope to be able to at least provide some recreation, a healthy diet, a home in a decent neighbourhood and heaven forbid - some sort of an education fund. If people don't feel comfortable having kids for financial reasons I don't think the Fraser Institute needs to be telling them it will all be okay. What if you have a kid with a medical condition requiring expensive medications? Does that happen to everyone? Heck no. But it could and it's costs like that we parents need to be prepared for. Underestimating does no one any favours.

Jodi - posted on 08/24/2013

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Bahahahaha!!!! My 16 year old EATS that much! Even if I were to penny pinch, he'd use up at LEAST $2,500 a year in food. I agree with Mary......it would have to depend on the age of your child. There is no way you could possibly raise an older child on that, not a hope in hell.

Those estimates can't possibly have taken all base costs into consideration (or even a portion of them). For example, when you have children, you need a larger home (extra bedrooms, etc). Even if your children are sharing bedrooms, that would not cover the additional rent or mortgage payments for the home you need when you have children versus the home you need when you are a single or couple. The difference could run out into the thousands of dollars a year, depending on where you live.

I don't believe the study is accurate.

Mary - posted on 08/24/2013

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But Chet, I would argue that for MANY parents daycare is an essential, base cost. If I were a single parent, I would absolutely have to utilize daycare. I couldn't work to provide for anything without it. In my area, for my child's age, that alone would run me between ten and fifteen grand a year.

I realize that not everyone has the means or desire to do the amount of activities that I do with my daughter. A huge part of my push to do this is that she is an only child; she is also an extremely social being who craves being around other kids. I look for the cheapest options around. I'm lucky to live in an area with a very strong Rec Council that is community supported - things like soccer and ballet are through them, and are (comparatively) dirt cheap. However, I think that these things, while not essential, are invaluable in shaping and rounding out the development of the child as a whole. Are they necessary, in the same vein as food, water, and housing? No, but I think that most parents strive to provide as much as these "extras" as possible - even those who are just barely scraping by.

I don't think things like a trip to Disney, or ridiculous extravagances (like a $110.00 American Girl doll) should be included...but the cost of a bike, or swimming lesons? Yeah, they should be factored in, imo.

Chet - posted on 08/24/2013

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The reason I posted was because the results of the study have been pretty contentious. They left out costs that many parents felt should be included (like daycare). I think it was fair though. The study wasn't trying to answer the question "how much do people spend raising a child?" it was looking at the base cost. A lot of the supposed costs are about choices people make. It's good for people to know that the essentials run about $4000 per kid per year (or whatever) and it goes up from there depending on the choices you make. I'm essentially a SAHM, and I feel pretty strongly that people inflate the costs of child rearing. We have three kids in violin lessons. It's kind of pricey, but I don't consider it a cost of raising children. That's just something we decided to do. Food is a cost of raising children. I think some extra curriculars and hobbies are a good idea for most kids, but there's lot of cheap stuff they can do.

Mary - posted on 08/24/2013

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Well, I think there are entirely too many variables at play to come up with a reliable estimate that everyone could agree on. One of the biggest factors here would be age.
I certainly spend a lot more on my daughter now at 4.5 than I did when she was a baby. I breastfed for the first year and a half of her life, so unlike those who bottle feed, I had no expenses for formula (and my expenses for pumping were pretty small). Food costs after 6 months were pretty neglible, although those costs gradually increase with age (and here again, it depends on what you feed your kid. My daughter is a berry fiend, so I currently spend about 20 bucks a week on fresh fruit just for her!)
Another huge difference internationally would be healthcare. Here in the US, we pay for private insurance. That means that a certain amount of money comes out of each paycheck just to have insurance, and then there is the out-of-pocket costs of the copay for each visit. In this area, my costs have decreased. The monthly insurance cost is unaffected by her age, but (for us) her number of visits to the doctor has greatly decreased. Those first two years they have frequent check-ups, which incurs a copay (30 bucks for each visit) I think that first year we had between five and six well-visits. My daughter is almost never sick, so since the age of 2, we have only seen her pediatrician for her yearly check-up. I have zero costs and medications. This would be much different for say, my sister, whose kids have multiple allergies, are on daily meds for this, and have at least a few illnesses a year requiring an office visit and antibiotics.

Then you have the whole daycare issue. If you have to pay for childcare, the above estimates would be way too low. Of course, these costs decrease substantially once your child is school-aged.

Even so, I think these most recent estimates are undeniably on the low side. I'm a SAHM, so I have no daycare costs to contend with. However, I do have my daughter in preschool, as well as a bunch of activities like dance, gymnastics, soccer, swimming, and ice skating. For last year, at the age of 4, the cost of preschool and these activities was roughly $4,200.00 (US dollars). I'm already on the high side of the Fraser Institute's estimate, and that is without adding in the yearly costs of food and clothing. I'm by no means extravagant when it comes to things like toys and "recreational" supplies (bikes, art supplies, books, etc), but to me, a certain amount of these items are essential for learning and development as well.

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