The Cost of Raising a Child

This week the USDA published its annual report on Expenditures on Children by Families and the numbers are shocking – to me at least.  It costs an average middle-income American family $222,360 to raise a child from birth to 18.

Depending on age of the child, annual expenses ranged from $8,330 to $9,450 for families with a before-tax income less than $56,670, from $11,650 to $13,530 for families with a before-tax income between $56,670 and $98,120, and from $19,380 to $23,180 for families with a before-tax income more than $98,120.

The lower numbers in each range correspond with what families, on average, spend on a little person like this

before he or she is even a year old.  Thus, families in the highest income bracket, on average spend $19,380 on their baby before the age of one.  $20,000 on an infant!  And, that doesn’t even include any prenatal costs, according to the report.  Even the number for our income bracket seems high to me.  So I started reading – partially, because I find this stuff interesting and partially because I needed to know if Nora was our one-way ticket to the poor house.

After reading the report, though, I’m not entirely sure I think the methodology is 100% reliable.  And I’m not the only one.

Housing expenses, for example, which are the highest costs attributed with raising a child, are one thing that jumped out at me.  I’m not sure that housing is always impacted by family size. We didn’t change housing when we had our baby, so the rent stayed the same; it doesn’t seem completely fair to now attribute some percentage of our rent to her, especially if we would have been paying it anyway whether or not she existed. (And now that we’re in Nantucket, even without her I think we would probably have the same size house.)  Same thing could be said for our cell phone bill, heating oil, insurance, etc – all things the USDA factored into housing costs. And I noticed they automatically assumed that in two child families, the children do not share a room. Really?

And then there’s this:

Child-rearing expense patterns of single-parent households with a before-tax income less than $56,670 were 7 percent lower than those of husband-wife households in the same income group.

That statement says a lot to me. It’s not really that it costs $222,360 to raise a child, it’s just that’s what families, on average, are willing to spend. Clearly it can be and is done for less.

Nora is only 9 months old, so I can’t say what our spending will be like in the future.

Maybe she’s a born shopper.

However, we are already trending significantly below the average represented here. According to Table 10, based upon our income, we should be spending $8,570 on her in her first year.

Since I found out I was pregnant with her, we have spent $5069.42, if I include things like the prenatal yoga classes and our doula (which might fall under that prenatal category that the USDA didn’t include). The bulk of it ($3,580) is childcare. Take that out of the equation (which we did as of last month!) and we’ve spent $1,219.42 on her clothes, food, diapers, toys, etc. Of course, we are a breastfeeding, co-sleeping, cloth diapering, simple living, Freecycle and second-hand loving family, so we certainly aren’t “average.”  We also got a lot of great gifts and hand-me-downs from friends and family (which the USDA did not factor into their numbers, either).  While we aren’t average, I think we are a great example of the fact that an infant does not have to cost nearly $20,000.

It’s all in what you’re willing to (and in some cases duped into) buy(ing).  Like that stupid baby bathtub.

Biggest waste of $17 ever.  See how miserable she looks?

And then there’s the collateral damage costs associated with kids.  Like when they knock over a lamp or throw a baseball through a window or when your camera gets messed up rescuing them from a wave.

That’s right.  These days, photos taken by my camera look like this:

That’s what happens when you aren’t careful at the beach.

There aren’t any repair places on the island, so we have to mail it to Nikon for service.  Meaning there will be a lot of different (old, sourced, & cell phone) pictures on the blog for a while.  And I’m wondering if I should include the repair cost in Nora’s category in Quicken?  I mean, if she wasn’t so darn cute and photogenic, I probably wouldn’t have even taken the camera to the beach in the first place…  How do you think the USDA tracked the costs of collateral damage?

Well, either way, with the camera repair or not, we certainly aren’t going to hit the $8,000 mark before Nora’s first birthday.  Unless we decide to throw her a really killer party.

After the numbers came out, Lisa Belkin asked on the Motherload Blog if raising a child was worth all the money spent.  I posted something similar to my thoughts above and said that I couldn’t ever imagine spending $20,000 (or anywhere near that) on a less than year old, but every penny of what we’ve spent so far has been worth it (excluding the bathtub, of course).

Now, I’m curious, what do you think about the numbers?  How much do/did you spend on your kid(s)?  Has it been worth it?  Are there any bathtubs haunting your financial past?  If you don’t have kids yet, does this report make you think twice about having them?