People talk about how expensive kids are... I'm not sure I completely agree.
1) Food - Our grocery budget is $600 a month, and the kids easily take half that each month. $300 invested each month for 18 years at 8% return = $131,220.88...and that's just for groceries! That amount is what I'll have less in retirement.
2) Dental, vision, and other medical - We pay extra for insurance because we have a family. My daughter's orthodontia cost over $10,000 out of pocket for us because she needed everything under the sun, early wisdom teeth extraction and a minor surgery. Son's out of pocket was about half that. - $15,000.
3) Athletics - We live in a pay to play school district. My daughter is a three-sport athlete which is $150 per sport per year ($450). My son is in middle school and currently only a two-sport athlete, but he will be a three-sport athlete and perhaps even a four-sport athlete when he enters high school ($300 a year now and perhaps $600 a year in high school). We also have to give money to the boosters for each sport which is another $30 per sport (that's another $150 right now). On top of all that, we buy sweats for cross country and track and then they have to buy the uniform top. Then, this past fall, my daughter had a serious running injury that after insurance ended up costing us $1,000 out of pocket. Oh, and there's the time my son broke his thumb doing a backflip on our couch. Conservatively this will end up being $6,000 by the time they are done with high school.
4) Band - Both my kids are in band. Trumpets and clarinets are expensive not just to buy but also to maintain. Giving money to the band boosters is expensive. Only because my daughter is able to use my wife's old clarinet (which cost $300 to overhaul), we're probably about $1500 into instruments and reeds for the clarinet.
5) Lost wages - My wife was a stay at home mom for more than 14 years. She left a $47,000 a year job at the beginning of that with big raises likely to come. $47,000 a year (not giving her a raise) times 14 = $658,000. Conservatively I'll up that to $700,000. Let's say we invested HALF that amount for the last 14 years ($25,000 per year for 14 years). At 8% return, that's $580,373, and that would take us up just to today for me at age 46. Let's now not add to that and see what that turns into by the time I'm 60 when I want to retire - $1,778,097.74.
6) Bigger house. Could be a wash as we could easily spend the same for a house. Does cost more to heat and cool this bigger house, but I'll keep this as a wash. Though, we did pick a house in a great school system and we pay big taxes for that...we would likely not have done so if we didn't have children.
7) Family summer pool membership for $500 that we wouldn't have gotten otherwise and then diving team for my son for another $100. All told this will end up being about $8,000.
8) Clothes for them. No way to even calculate this, but I'll say easily $10,000 total for them both over the course of 18 years. $10,000
9) Gifts at birthdays and Christmas. $100 on average for each kid for both Christmas and birthday (and it's probably a little more when adding in the birthday parties we had for them when they were younger). That's $7,200.
10) Cell phones for the family. Our family plan costs about $200 a month, so $100 a month of that is for the kids...actually I'll be very conservative here and say that if we didn't have kids maybe we'd get unlimited everything and pay just $40 less per month than we do now. They haven't had cell phones the whole time, but I can see paying for them through college for them both, so that's about $4,800 difference.
11) My daughter just turned 16. We will be getting a used car for her to use soon. That's perhaps $4,000. The big cost though is the insurance we will have to pay. I'll just add $3,000 to that cost, but it will likely be more.
12) Vacations cost more. Over 18 years for both of them, easily we will have spent $5,000 more than we would with just the two of us, and that's being conservative.
13) College - Fortunately my daughter has already scored high enough on the practice ACT and SAT that she took as a sophomore to easily get a full academic ride to several state school here in Ohio (they have published criteria), and she will duplicate that when she takes the tests for real next year as a junior, but she might go elsewhere as she doesn't necessarily want to go to those schools. My son performs similarly in school and could do that as well, and he has an outside shot at getting an athletic scholarship too. We've always said some of the burden of college will be on them either through their own working or loans in addition to any scholarships they might receive. I figure we could be lucky enough to get out of it with just paying about $20,000 total for both kids (and I think we're luckier than most with the likely scholarships they will get).
I could go on and on and on (summer camps, allowance, money here and there for all kinds of things). Fortunately for me, I realized this early on and decided to have children anyway, and they are worth every penny and then some. If I add up all that (which was all arrived at conservatively and didn't include everything) and don't count investing any of that, that's roughly $783,093. If I invest even just a portion of my wife's lost income, then we are over $2,000,000. Yes, some don't stay a stay at home mom that long, but then you need to factor in paying for childcare, and again, I didn't include everything nor did I invest all that money from the time it would start to be spent. A normal family with decent but not great professional-level income (two college-educated people making typical college-level salaries to the tune of over $100,000 per year total for both but under $150,000) can easily be out $2,000,000-$3,000,000 over the course of cradle to college graduation for a couple of kids if investing all the money spent on them including any lost wages for a stay at home parent.
You can find all sorts of estimates out there ranging from $300,000 (not including college) to over $2,000,000, but since I'm an investor, my amount is easily on the upper end.
Since "a lot" is subjective, that can't be considered "a lot" just generally, but to me that's a lot.
