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Re: How much do children cost?
Old 05-07-2007, 12:34 PM   #21
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Re: How much do children cost?

Yes, they are expensive, but like many things in life your costs will vary by the choices you make along the way.

We have 2 sons and when we started the adventure in 1984 we decided that I would stay home and we would live on my husband's income. So we had no child care expenses. Being a 1 income family changes your perspective on a lot of things when you make decisions about needs vs. wants. Many times we made choices based on "good enough" rather than the newest, most expensive or what everyone else was doing or buying.

Major compromises were family vacations, the vehicles we drove and home improvements. We would make a trip to see (and stay with) family while others took major expensive vacations. We drove cars until they weren't worth fixing and replaced with newer, but used, cars. We never felt the need to go for a minivan or SUV. We haven't had new furniture or redecorated since the 80's. We did home repairs when needed and made things last.

The process of raising children goes through stages. At first there are pregnancy/newborn expenses. Maternity clothes, crib, car seat, high chair, etc. Many of us get these as gifts or hand me downs or loans from friends. Kids grow fast so you go through a lot of clothes and shoes. My sister had 2 boys and then I had 2 boys and a sister-in-law had 2 boys so we passed around a lot of good stuff. As for baby food, we ground up whatever we were eating and also added things like strained fruits and baby cereals. I was the rare mom who used cloth diapers instead of disposable.

Both kids went to pre-school 2 mornings a week at ages 3 or 4. In our area this was not expensive and it's certainly not necessary. Clothes get more expensive as they get older, we still had a lot of hand me downs from the cousins. As they get older and into sports and activities we had a nice used sporting goods store (www.playitagainsports.com). Many kids try all kinds of sports and there is a lot of gently used equipment around. The same goes for bikes and scooters and skateboards.

The next large expense was orthodontia at about 10-13. In our area this was $3500-$4000 and we paid about $125 monthly. Also around this age is music lessons and instruments. Depending on what they play and how well they do your costs can get high. Just like sports, many kids try an instrument and don't stick with it, so the used market can be large. For us, drum lessons were $10-$13 a week.

Next is driving and car expenses. A 16 to 18 year old added to your policy can run close to $100 a month. Some families feel the need to buy the kid a car, we certainly didn't! But when we bought a replacement car the old one got passed on to the teenager. We paid the car insurance if they were just added as a driver. When it comes to having a 3rd car and the kid using it for work, then he paid for the car insurance.

College expenses...... This is a whole other world! One of our sons went to a state university for 4 years and always lived in the dorm and had the food plan. Our state supports it's state college less than some others. When he started in 2002 it was about $13,000 a year and increased to about $16,000 a year by the fourth year. That included the room and board but not books and transportation, etc. Also, he got $2000 a year as a merit based scholarship from the school which helped. The other son goes to a state university that is close enough to commute to so his costs are more like $8600 - $9000 a year. You can save a lot on books at half.com. Our expenses with kids at state colleges is a lot smaller than families who have kids in private colleges. Again, it's about your choices.

So, yes, having kids will have an impact on your finances. To us, it was something we wanted to do. Without them we could have had lots of good stuff and much better vacations and a much better retirement plan. But we don't regret any of this. It was a good decision for us.
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Re: How much do children cost?
Old 05-07-2007, 12:37 PM   #22
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Re: How much do children cost?

Sorry, double post.
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Re: How much do children cost?
Old 05-07-2007, 12:59 PM   #23
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Re: How much do children cost?

Here's an article that gives some hard figures:

http://business.mainetoday.com/finan...se/001736.html

Looks like with college it could easily cost 300k-500k to raise a kid in today's dollars.

I'm recently FIRE'd at in my mid-30's, and deciding whether I want to have kids, because it's clear I couldn't afford them without going back to work on my 1.2m nest egg in the SF Bay Area.

I feel fine about scrimping myself to afford FIRE, but enforcing scrimping on my kid so I can FIRE seems a bit selfish. I grew up in a relatively poor family where my peers always had more of the toys and access to experiences that I wanted. I survived the experience well, but it was hard on me in a way that I'm only now discovering now that I'm FIRE and have the resources to really do what I want to do.
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Re: How much do children cost?
Old 05-07-2007, 01:20 PM   #24
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Re: How much do children cost?

Quote:
Originally Posted by free4now
Here's an article that gives some hard figures:

http://business.mainetoday.com/finan...se/001736.html

Looks like with college it could easily cost 300k-500k to raise a kid in today's dollars.
I read the article a different way. It says that those earning $41,700 or less will spend $134,370 to raise one kid. This is the spending level that I'm at. Add in 4 years at a state university (even paying all the expenses), and I'm barely at $200k. Probably ballpark accurate.

Add to that the fact that these are the gross total of all expenses, not a present value of those expenses. Even though I know I may need $60,000 to cover four years at a state school, that expense won't arrive for 17 years after the kid is born. I could set aside $30800 today and have $60,000 in 17 years at a 4% real rate of return.

And these expenses the article cites are for typical families that spend 101.3% of everything they make. Not exactly the LBYM types, on average.
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Re: How much do children cost?
Old 05-07-2007, 01:52 PM   #25
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Re: How much do children cost?

Quote:
Originally Posted by justin
Add to that the fact that these are the gross total of all expenses, not a present value of those expenses. Even though I know I may need $60,000 to cover four years at a state school, that expense won't arrive for 17 years after the kid is born. I could set aside $30800 today and have $60,000 in 17 years at a 4% real rate of return.
I think it's way optimistic to think you can get 4 years of full schooling for $60k 17 years from now. 15k a year is well below the poverty line just for living expenses... I wouldn't want to be the kid who has to live on Ramen noodles.

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Re: How much do children cost?
Old 05-07-2007, 02:04 PM   #26
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Re: How much do children cost?

Quote:
Originally Posted by free4now
I think it's way optimistic to think you can get 4 years of full schooling for $60k 17 years from now. 15k a year is well below the poverty line just for living expenses... I wouldn't want to be the kid who has to live on Ramen noodles.
Ramen for a few years is good for the soul. Everything from that point is up.... I realize that most (me and DW included) don't want our kids to feel deprived ... but I got to the point where I acutually liked Ramen ....
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Re: How much do children cost?
Old 05-07-2007, 02:06 PM   #27
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Re: How much do children cost?

Quote:
Originally Posted by free4now
I think it's way optimistic to think you can get 4 years of full schooling for $60k 17 years from now. 15k a year is well below the poverty line just for living expenses... I wouldn't want to be the kid who has to live on Ramen noodles.
I disagree that my estimate is optimistic. I was basing that estimate on the best available information at my disposal. This page that estimates current costs for a year of university, all costs included from my alma mater (and a good candidate school for where my kids will attend), indicate current costs are $15,197 per year. The $60,000 I cited is the cost in today's dollars. Whether I bear the total burden is yet to be decided.

If you noticed in my earlier post, I was discussing real prices in today's dollars and the present value of $60,000 at a 4% discount rate. However, there is a chance (probably a good one) that college expenses will increase at a rate faster than CPI.

I expect there will still be plenty of scholarships, merit-based aid, need based aid, grants, work-study opportunities, and summer jobs to help cover college costs. We also have two top-notch state schools in commuting distance if the kids REALLY wanted to extend their stay at Club Dad for an extra 4 years. But I'm guessing the odds of that occuring are approximately the same as the odds that higher education inflation will lag the overall CPI inflation.
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Re: How much do children cost?
Old 05-07-2007, 02:10 PM   #28
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Re: How much do children cost?

One other thought on children costs. I had originally made a FIRE budget that included $12000 per year for entertainment/travel expenses. That was before we had kids.

Now I realize that I most likely won't be able to spend nearly that much on vacations with kids in school (and some might still be in diapers!). Kid expenses can easily be covered partially out of that entertainment/travel budget item until the kids are on their own, which is precisely the point in time when the entertainment/travel can start in earnest for DW and I alone.

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Re: How much do children cost?
Old 05-07-2007, 03:17 PM   #29
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Re: How much do children cost?

Quote:
Originally Posted by CyclingInvestor
A healthy child 1-3 years old will set you back $20K-$40K. Up until last year
you could get 100% financing, but now you need to put at least 20% down.

Sub-prime children are $5K-$10K, but the resale market for these has dried
up, so make sure to return them in the 3 day "no-questions" window if you
change your mind. Financing for sub-primes has also dried up, so make
sure to get a firm commitment before making an offer.



Thanks for the childfree laugh, Cycling Investor!
But we have no business even reading these threads, you know!

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Re: How much do children cost?
Old 05-07-2007, 03:24 PM   #30
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Re: How much do children cost?

hmm, it depends on how you live...

Just watch some of those shows with families with 12 or more kids on TLC and you will learn alot on how to save money - buy stuff at goodwill, hand me downs, you can get almost all the equipment free or low cost from friends or craigsl*st type sites.

Harder costs are staying home vs. child care - around here 5 days per week prek is about $500/month, up north in bay area was $1000 per month so that varies a great deal.

and I have full coverage health so pay hardly anything for that - except lots of infant tylenol, DD's inhaler/meds ($15 every 2 mths) and now two cavities (which we could have avoided if i were better at the oral hygene dept) $200 - but that should be the only one in our near future!

so there are those unexpected costs - but the expected ones are not so big a deal.

and as my parents say - your kids can be your retirement plan! at least that's what they kept telling me and my sisters and I guess that explains why they're so annoyed i never went to law school! i foiled their retirement plans...

but every pregnancy is a gamble - i feel really lucky (for my health and the babes) but i know i'm done and if i ever got pregnant again, i'd feel really nervous about rolling that dice again...
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Re: How much do children cost?
Old 05-07-2007, 04:29 PM   #31
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Re: How much do children cost?

A few things about children can cost a lot... we did the hand-me-down thing for all the baby equipment and for most of the clothes/toys so that part wasn't too expensive. But my DH and I both work, so after two separate 6 month (unpaid but wonderful) maternity leaves I went back to work. Having 2 kids in daycare at once can be a stretch; our most expensive daycare year ran about $16,500 at a top-quality church daycare center. And, I can assure you, that daycare is not a place you want to skimp... you really get what you pay for. It takes some research to make certain, but the higher end places usually have better accreditations and college-educated teachers/caregivers who stay longer and are passionate about their jobs. (As opposed to a revolving door for staff and a lackluster interest in interacting with your children).

For college, we are putting aside $6k per year per child in 529 accounts. Hopefully, we'll be able to stop doing that at retirement in 4 years (target savings per child is $85K-90K), and just let it grow from there on out. If it's not enough later on, we'll figure that out when we get there. My goal is to help them get a 4-year degree at a public university.

But... as I'm sure you know (or maybe no one really knows this until they actually have kids?), the experience of having children and the love that you will have for your children can't be measured by what they will cost or what you may or may not sacrifice for them.

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Re: How much do children cost?
Old 05-07-2007, 04:38 PM   #32
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Re: How much do children cost?

Quote:
Originally Posted by bright eyed
and as my parents say - your kids can be your retirement plan!
I always jokingly tell my mom that if she isn't nice to me, she is going into one of those state-run homes. The homes they show on 20/20 where they don't even flip you and you get bed sores...

Thank you everyone for your opinions! I assume my LBYM will transfer to my children (I hope). But at the same time I don't want them to forgo things because I want to speed up by RE date, as you say. It really is something I look forward to, and I have to counterbalance that with my own wants.

What hadn't occured to me until you brought it up was the health insurance. I take it for granted since I'm a working stiff and they pay most of it. But, looking ahead, I will have to work from the birth of the child till around 18 years or so, if they want to remain insured under me. *unless I suddenly get so wealthy that I can take care of the expense myself* So that right there pushes my date from 50 to 32 + 18 = 50. Doh! Ok nevermind :P

But we all know eveyrhting always goes according to plan...
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Re: How much do children cost?
Old 05-07-2007, 04:39 PM   #33
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Re: How much do children cost?

Quote:
Originally Posted by Charlotte

But... as I'm sure you know (or maybe no one really knows this until they actually have kids?), the experience of having children and the love that you will have for your children can't be measured by what they will cost or what you may or may not sacrifice for them.

Exactly...and that is the real bottom line when it comes to having children.
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Re: How much do children cost?
Old 05-07-2007, 04:44 PM   #34
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Re: How much do children cost?

Quote:
Originally Posted by Olav23
But, looking ahead, I will have to work from the birth of the child till around 18 years or so, if they want to remain insured under me. *unless I suddenly get so wealthy that I can take care of the expense myself* So that right there pushes my date from 50 to 32 + 18 = 50. Doh! Ok nevermind :P

But we all know eveyrhting always goes according to plan...
Just treat private health insurance for a couple extra kids just like any other expense if you don't need to work for 18 extra years otherwise. That's what I plan on doing. If for some reason I lose coverage for the kids due to an illness making them uninsurable at reasonable rates I can afford, I can always go back and find a job (any job!) with health insurance just to get them covered. We also have a state plan for children in "low income families"* which is another fall back plan for me in North Carolina (I don't think they test for wealth here, only income).

* Low income means earning under $50k or so with 2-3 kids. :
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Re: How much do children cost?
Old 05-07-2007, 05:15 PM   #35
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Re: How much do children cost?

Quote:
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I'm just wondering, is there any rule of thumb to estimate how much a child will cost, as a portion of your income?
Yes. How much do you have? Multiply by 110%
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Re: How much do children cost?
Old 05-07-2007, 05:27 PM   #36
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Re: How much do children cost?

Quote:
Originally Posted by Olav23
I'm just wondering, is there any rule of thumb to estimate how much a child will cost, as a portion of your income?
No. However kids are cheap at any price.

If kids are the difference between being able to ER or working longer, I'd work longer. Of course your kids will motivate you to work harder for ER...

Here's our 1992-present Quicken data:
Allowance....................2,003.24
Childcare (baby)........12,516.22
Daycare (older).......22,567.20
Girl Scouts....................900.97
Horses....................10,448.78
Hula.............................448.58
School.....................16,919.30
Sports.......................6,759.83
Toys..........................3,325.04
Clothing.......................3,450.31
Dining........................11,796.34
Groceries & toiletries.32,358.47
Sitter...........................1,482.00
Pets................................899.46
College......................67,200.00
Medical & dental..........4,686.60
Tax federal..................2,346.55
Tax state..........................36.92

TOTAL: $200,145.21 (but check my addition)

Disclaimers:
- The kid is only 14 years old and hasn't asked us to pay for driving, dating, or drinking yet.
- The childcare & daycare numbers are cheaper than most. (Two working parents.)
- As you equestians know, dressage (horses) for three+ years was world-class cheap.
- Public school plus eight years of $85/month Kumon math.
- Clothing is pretty much Goodwill & garage sales in Hawaii (no winter gear, few shoes).
- Dining is 40% of the family total. McDs & Chuck E. Cheese more than make up for the grownup gourmet-dining experiences that we've foregone.
- Groceries & toiletries are 40% of the total family cost. Proportions might be different between genders but the total would be about the same.
- We pretty much stopped using sitters when she was five years old.
- College is roughly $400/month for the last 14 years, but we think we're done. This does not include unrealized gains.
- Medical & dental includes $4400 of orthodontia but family TRICARE medical premiums were free for the first nine years.
- She pays for her own iTunes & Netflix subscriptions-- not us!
- Considering the water left running, lights left burning, and loads of laundry then she should pay 40% of the utilities too... but she doesn't. Yet.

Other issues:
- Some of our numbers (childcare, daycare, medical, dental) were subsidized by the military but could also be subsidized by some corporations.
- Maybe some of you would estimate one kid's groceries & dining at less that 40% but our numbers are probably low-- you'd have to board our kid for a week to try and keep up with her consumption.
- We've probably saved too much for college-- especially considering the last couple years' market returns-- but if we'd started in 1966 it wouldn't look very impressive.
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Re: How much do children cost?
Old 05-07-2007, 06:57 PM   #37
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Re: How much do children cost?

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Originally Posted by runchman
How better to spend your money than a trip to dairy queen on the bike path with the 2 kiddos? 9 bucks for 2 blizzards and a shake for dad.

When they are grown and out of the house I will really, really miss having my 2 little 'expenses' to pal around with.

- John

That's my take too, John. I would so love to return to that part of my life!

Ha
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Re: How much do children cost?
Old 05-07-2007, 07:55 PM   #38
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Re: How much do children cost?

Kid's are FREE.

If we didn't have them I'm certain I would have bailed on MegaCorp many years ago at a salary about 1/4 of where I'm at today.

If you want kids have them. You'll find the money.
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Re: How much do children cost?
Old 05-07-2007, 10:33 PM   #39
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Re: How much do children cost?

And for all means if you aren't having kids, take advantage of the situation and blow lots of money on fun things like really nice vacations.

being childless you really can't imagine the freedom you have compared to having children, so my take is that you should take advantage of it. Take a 2 week scuba-every-day vacation to the cayman islands. Go to Hawaii several times.

- John
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Re: How much do children cost?
Old 05-07-2007, 10:36 PM   #40
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Re: How much do children cost?

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Originally Posted by HaHa
That's my take too, John. I would so love to return to that part of my life!

Ha
There's a ziggy marley song I like that features the line "These be the gold old days", the message being to enjoy today, because in the future you'll be looking back on today as the good old days.

Although I must admit I don't look back on the days with my ex as the good old days, so maybe it's just a catchy song and nothing more

- John
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