Any insight on what's driving the heating and cooling cost reductions when kids leave the house? "Close the damn door!" is standard practice at your houses, right?
We have indoor cats, so certainly. Actually, I don't think it is one thing. Certainly my son's room doesn't have its light turned on very often since he is at college. But, it is more than that. The washing machine/dryer are used less often. The dishwasher is used less often. The refrigerator door is opened less often. His computer isn't plugged in. He isn't playing video games and so on. Kids do things like laundry, run the microwave, watch TV, play video games, use the computer and they do more of it as they get older.
In our case, part of it is that we were able to actually move to a smaller house after our oldest departed. So there was a huge reduction because we moved to a house that was a third smaller the first house. The new house was also newer and more energy efficient.
In your case, you may not get as much of a reduction as we did since it sounds like you don't like in an area with high AC usage and high heat. I'm in Texas and cooling costs are significant in any event.
The other important thing to keep in mind is that it's only a 18-22 year cost duration and not "forever" like other living expenses a 30-something retiree must budget for. And as for the much higher costs some say you experience once the kids enter the teen years, that's only 5 years (age 13-18) plus whatever you provide during college. I don't say that to minimize the reality of the burden, but rather to put it in the right context.
This is true, but I think not relevant to the OP's question which was dealing with the cost of raising a child and thinking it would only add $4800 a year. I agree it is not a forever cost -- indeed DH retiring when he did and me semi-retiring was based upon this being a time limited cost.
That said, while costs were certainly be higher during say the 12-18 years (plus college if you pay for those), that doesn't exclude the possibility of costs being higher at a younger age.
We had numerous things that came up before that age (there were not frivolous things, they were true needs). Not every year, but not predictable either.
It's almost better to budget the $400/mo like OP suggests, then add in a big fat lump sum to cover "high costs during teen years" and "college assistance" to the extent that is also in your plans.
Let's say high cost teen years add $10k/yr for 5 years (braces one year, some crazy med expense 1 year, new-ish car 1 year, insurance 2 years, plus misc stuff). All the OP needs to set aside is $25k if retiring around when the kid is born. Let that $ sit for 13 years at 5% real returns and you have the $50k at age 13. $25k represents 2% of the OP's current investment portfolio (minus the $200k house purchase). Not a big deal, but a slight bit more than rounding error.
The problem with the $400 a month is that the OP is basically saying that is the incremental cost per month in having a child over having no child at all. I don't think that is likely to be true. For direct costs, perhaps, but as mentioned there are lots of other costs people just don't include because they don't see them as child related costs (food, utilities, stuff for the house, gasoline, etc.).
So, I think $400 a month is way too low because it requires a degree of optimism that seems unlikely to be fulfilled.
If you think right now that $50k would be needed ($10k a year) for the adolescent years based upon today's costs, then you have to set aside $50k for it now. You can't set aside $25k because while it might grow to $50k in the time period, the $50k in expenses would also likely go up.
Not to mention, of course, that $50k for the period in question could be laughably low. For example, just auto insurance adds thousands in cost for us. And, since we are supporting our son during college, that extra isn't just for a year or two.
Our oldest is entering the double digits in under one month (which is hard to believe). We have yet to see any huge costs related to kids.
I really do, I get that. The point is mostly that I think you are (1) looking at the costs you can see and not how having kids increases your overhead and (2) not considering some of the larger costs as they get older. Hand me down clothes are fine for small children. Someone in high school is going to need more.
I know you mentioned in an earlier post that if you weren't doing X with the kids then maybe you would spend more on other things because you would be traveling. That is, of course, entirely possible. The
difference is that most of the things you mentioned would have been discretionary expenses. Most of the expenses associated with kids aren't discretionary at all. Some are of course. But basically kids are a commitment. If the market is down and you want to spend less in a year it is easy to not go on that $5000 vacation. On the other hand, you can't just decide not to pay for your child's medical needs.
