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Annual Cost of Kids
Old 06-22-2009, 07:41 PM   #1
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Annual Cost of Kids

My wife thinks she'd like to be a stay at home Mom when we have kids. I'm all for it, but I want to make sure we can swing it financially.

How much do kids cost (especially during the younger years) for LBYMers? Some monthly expenses I can think of off the top of my head I think it will be:

Health Insurance - + $300
Formula/Food - what's the range for this (from breast feeding to specialty formula)
Diapers - no clue how much they are
Clothes - will probably get some hand me downs and gifts
Toys & Books - mostly use hand me downs and gifts
Childcare - ~$500 - $1,300 but won't need if my wife stays at home

I'm sure I'm leaving some stuff out. I'm not as concerned about one time expenses like cribs and car seats but what are some other monthly expenses?
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Old 06-22-2009, 07:43 PM   #2
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How much you got?
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Old 06-22-2009, 07:46 PM   #3
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Originally Posted by brewer12345 View Post
How much you got?
Doesn't matter, it's not enough.

Quote:
Government figures put the total cost of raising a child at $279,000, but some increasingly common expenses can send the number soaring over $1 million. Where you fall on the kid-spending spectrum.
Costs to raise children: $1,530
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Old 06-22-2009, 07:49 PM   #4
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Old 06-22-2009, 08:09 PM   #5
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I have annotated your post with my responses, in blue, based on my own experiences and costs when dirt poor in 1978 with a baby:
Quote:
Originally Posted by bank5 View Post
My wife thinks she'd like to be a stay at home Mom when we have kids. I'm all for it, but I want to make sure we can swing it financially.

How much do kids cost (especially during the younger years) for LBYMers? Some monthly expenses I can think of off the top of my head I think it will be:

Health Insurance - + $300 Depends on your insurance, so check it out. Free for us since family was the same as wife and husband. $0.00
Formula/Food - what's the range for this (from breast feeding to specialty formula) Breast feeding cost: $0.00
Diapers - no clue how much they are 18 cheapest cloth diapers were $12.00 (but requires a washing machine)
Clothes - will probably get some hand me downs and gifts All clothes were free hand me downs and gifts: $0.00
Toys & Books - mostly use hand me downs and gifts Almost all toys and books were free hand me downs and gifts: $0.00
Childcare - ~$500 - $1,300 but won't need if my wife stays at home I stayed at home: $0.00

TOTAL cost of the above: $12.00 for cloth diapers.

I'm sure I'm leaving some stuff out. I'm not as concerned about one time expenses like cribs and car seats but what are some other monthly expenses?
There really weren't any for me. I was concerned before having Christina, since we were pretty poor and my ex was leaving the Navy six weeks after my due date. But the other Navy enlisted wives wisely told me, "A baby will cost whatever you are willing to spend." That is SO true. The catch is that most people, including me, want to spend everything they possibly can afford in order to give their baby the best start in life. After first year I started to spend more on toys and books, and that ramped up pretty quickly, but that was just because I wanted to spend it and we had more money than before. Towards the end of the first year, I spent $6/month on baby swimming lessons.
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Old 06-22-2009, 08:22 PM   #6
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How much the cost is relative to how you choose to parent. Cloth diapers say $20 a dozen, breast feed and use a blender on real food and the cost is negligible. Clothing can be reasonable unless everything has to be new. Insurance and copay's are easy to find in your insurance company/benefits info. School activiuties limited to one per season is not outrageous. Private lessons and keeping up with the Jones are very expensive. Camping is not expensive and Disney Land is pricey. Look at the wife and evaluate if she is high mtc. If the answer is yes, children will be very costly. If no, then not a biggie!
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Old 06-22-2009, 08:31 PM   #7
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On the plus side, don't forget that some parents lovingly refer to their children as their little tax deductions. You'll get an additional exemption and a $1,000 child tax credit if you qualify (I have no idea what the rules are -- I just know I qualify).

On the minus side, I think the biggies to consider are:

- If your wife is a career woman and making lots of scratch, the loss of her salary could be significant. (Mine was a SAHM at the time and is now my ex, so nothing for me here.)

- Daycare is very expensive. (My kids are old enough not to need it. Was ~$500 per month for my youngest in a Montessori school for a while.)

- Paying for the kids' college is expensive. To what degree you do this is of course up to you. (I'm setting aside 4 years at an average public university, which, after inflation, works out to a cool $322K total for my three kids.)

- A bigger house (along with bigger property taxes, utilities, mortgage, etc.) and/or a second/bigger/more suitable car can be biggies. (I have the car and house now that I need, so in my case I look at it as additional savings for when they're grown and gone.)

The rest of it, IMHO, is nickels and dimes.

HTH,

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Old 06-22-2009, 09:00 PM   #8
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Make sure you factor in a MUCH larger emergency fund to account for layoffs in a one-income household where a spouse stays home with the kids. I mean MUCH MUCH bigger. Especially in this economy.
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Old 06-22-2009, 09:52 PM   #9
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Thanks all for the replies. It gives me more confidence that we'll be able to swing it on one income. As someone put in the post that REWahoo referenced - there is a lot of hogwash out there about how expensive kids are.

I also think college can be much cheaper than a lot of people assume. Because of financial aide and a couple of small scholarships it was cheaper for me to go to a $35k private university than to go to my state school. My family wasn't able to help much so I paid for most of it with student loans but with < 3% interest they're pretty easy to pay off.
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Old 06-23-2009, 05:52 AM   #10
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Originally Posted by Want2retire View Post
TOTAL cost of the above: $12.00 for cloth diapers.
W2R, aren't you thinking about writing a book? You could write titled "How to raise a child for $12.00 a year." Could be a big hit especially since many families are cutting back and are not as concerned about the Jones
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Old 06-23-2009, 06:14 AM   #11
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Thanks for listing the big items, 2Cor521. I responded in blue:

Quote:
Originally Posted by SecondCor521 View Post

On the minus side, I think the biggies to consider are:

- If your wife is a career woman and making lots of scratch, the loss of her salary could be significant. (Mine was a SAHM at the time and is now my ex, so nothing for me here.) That's a big one for us since we make close to the same.

- Daycare is very expensive. (My kids are old enough not to need it. Was ~$500 per month for my youngest in a Montessori school for a while.)
There's a great daycare by us but it's $1250 a month! Do they teach them calculus? My wife's work has a daycare for a fraction of that so if she decides to keep her job, we'll likely do that.

- Paying for the kids' college is expensive. To what degree you do this is of course up to you. (I'm setting aside 4 years at an average public university, which, after inflation, works out to a cool $322K total for my three kids.)
Once we get to this point, hopefully most of nw is in our 401k. Do financial aide packages factor in your nest egg? I know there's been a lot of other posts about this so I'll do a searh on it
.

- A bigger house (along with bigger property taxes, utilities, mortgage, etc.) and/or a second/bigger/more suitable car can be biggies. (I have the car and house now that I need, so in my case I look at it as additional savings for when they're grown and gone.)
Our house is big enough for a couple of kids, but my 1995 Miata isn't very kid friendly I'll probably sell it for a used SUV when the time comes. I take public transportation to work and I don't drive that much so I'm able to save a lot on transportation.

The rest of it, IMHO, is nickels and dimes.

HTH,

2Cor521
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Old 06-23-2009, 06:18 AM   #12
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Health ins - mine went up ~100 a month but its subsidized by my firm.

Food - breast feeding is free of course, but it doesn't work out for everybody. I read recently that formula is ~1500 per year.

Diapers - neborn diapers here are 10-12 for a pack of 40 which will last 5-6 days.

Clothes - whatever you want to spend. You'll get lots of cute outfits as gifts. Then you'll go to target and buy a few 5-packs of basic white onesies. Not sure what these cost, you could check on line. Budget a few packs at each size level for the first year.


I agree that the costs can be as low as you want them to be and, ex-child care and education, are really insignificant.

In our case the one time costs were material. Many of these are avoidable or controllable, of course, but they still may add up to more than you think.
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Old 06-23-2009, 06:28 AM   #13
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W2R, aren't you thinking about writing a book? You could write titled "How to raise a child for $12.00 a year." Could be a big hit especially since many families are cutting back and are not as concerned about the Jones
Thanks for the compliment, though I really don't deserve it. I spent a lot more on my daughter as she got older, because by that time we had the money and I wanted to. We spent $5,000 for private kindergarten for her in 1983. Of course, I could have sent her to the public school I suppose, or to a cheaper private kindergarten. I even spent more during that very frugal first year when she was a baby - - as Connie points out, the cost of cloth diapers has gone up since 1978! (though I only had to spend the $12 once, not every year).

When my baby was small and I was walking her in a stroller in the border barrio where we lived at the time, I met an older Mexican woman and "cried on her shoulder" a bit about how hard it was to not be able to afford disposable diapers. She told me that when her kids were babies, she had to wash the diapers in a stream, pounding them with rocks to clean them. Boy, did I feel bad about complaining after that. At least I had a washer and a clothesline. No matter how little you think you spend, someone has less and spent less.
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Old 06-23-2009, 02:32 PM   #14
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Quote:
Originally Posted by bank5 View Post
My wife thinks she'd like to be a stay at home Mom when we have kids. I'm all for it, but I want to make sure we can swing it financially.

How much do kids cost (especially during the younger years) for LBYMers? Some monthly expenses I can think of off the top of my head I think it will be:

Health Insurance - + $300
Formula/Food - what's the range for this (from breast feeding to specialty formula)
Diapers - no clue how much they are
Clothes - will probably get some hand me downs and gifts
Toys & Books - mostly use hand me downs and gifts
Childcare - ~$500 - $1,300 but won't need if my wife stays at home

I'm sure I'm leaving some stuff out. I'm not as concerned about one time expenses like cribs and car seats but what are some other monthly expenses?
I got lucky, with two sons, I can do hand-me-downs. If you have a boy and a girl, no such luck.

If daycare is $1250 a month, that is steep,but I paid about $1000 a month. Figure another $1000 -$1250 a month on top of that.
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Old 06-23-2009, 03:02 PM   #15
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I can see W2R writing a sequel to Possum Living...titled Baby Possum Living!



The newbies may not know about Possum Living--it is a hilarious book about living on $15 a year or so and details a very much back-to-nature approach to LBYM. I think there is a copy of it online (couldn't find it, though), Dolly Freed is the nom de plume of the author. I have a copy of my own, and it has drawings on how to make a still!
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Old 06-23-2009, 04:02 PM   #16
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Here's a couple threads on this that go into detail from a few years back:
Cost of kids
cost of kids

I agree with the consensus that there is no consensus. You can spend virtually zero (other than foregone income from the working spouse staying at home to care for kids). Eventually as they get older food costs will pick up.

For us, we pay MIL a little to babysit our two, but it is probably only 10-15% of prevailing market rates ($1000-$1500/month per kid according to a co-worker that just looked into it).

Diapers, formula, baby food, etc are temporary, but they are replaced with different things as they age. We shop at walmart and buy store brand, so formula in the big can was $13 or so for ~1 week?? IIRC; diapers - 70-120 per box for $13 (less per box as you get bigger sizes). I heard an estimate that kids go through 2500 diapers. From experiencing it x2, that may be a low estimate. Buy name brand formula or diapers and pay 2x.

We already had a 4 br house and 2 cars w/ 4 doors, so no additional expenses for houses/cars. Although we did buy the house knowing we would eventually have kids.

Don't forget that you will spend less on some things as well. Probably less time going out together and vacationing together, particularly when the kid(s) are young. It's a hassle to dine out or travel w/ youngins in my experience. Same with sports cars. Minivans or suvs cost the same as sports cars generally.

Health ins. is virtually free for us through DW's job, but would be $6000/yr extra through my job, or $3000/yr privately for 2 kids.

We are starting to save for college this year. I figure $5000 per year into a 529 for the next 16 years should cover around 1/2 the in state college costs (at good schools) for 2 kids. This is probably the single largest kid expense we have.
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Old 06-23-2009, 07:17 PM   #17
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Keeping in mind that my "baby" is 7 now:

Health Insurance - changing from single to family insurance (1-4 kids) cost about 75% more. My spouse maintains separate health insurance. Adding another adult onto a health insurance policy is usually quite expensive.

Formula/Food - breastfeeding is obviously free, except that Mom needs to intake a lot more calories to produce. At the max, I was spending about $100 per month on formula.

Diapers - I spent about $60 month on Pampers

Clothes, Toys, Books - you can spend as much or as little as you like. Hand-me-downs, consignment stores, Target are all great. You need less than you think in this area...

Childcare - this is a big one... at a 5-star daycare in Charlotte NC, in my last year of 2 children in daycare, I paid $16,500 for the 2 of them. I think an infant spot is running about $200 or $210 a week at our old daycare. You can go certainly go cheaper, but keep in mind that you get what you pay for.

Good luck!
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Old 06-25-2009, 10:58 AM   #18
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My DD is almost 3.5 and I just bought some new toys for the first time. Usually I get stuff from craigslist (I got this HUGE lot of fisher price little people for $50 at Christmas) or as gifts or hand me downs.

I shop for cloths at the local baby consignment store. Outfits are $5 or sometimes $10 for the fancy stuff. Kid outgrows them pretty fast so no use spending a lot of money. Shoes are $12 to $15 new, or I get used ones.

MIL got a HUGE pile of books from someone at her work who was moving. I pick up books occasionally or thru Amazon used market place.

My biggest expense is daycare. Also had to keep the house a bit warmer in the winter, as the kid gets cold fast. But that was probably chump change in the grand scheme of things.

I was already paying family rates for health insurance.
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