How much do children cost?

[megacorp-firee]

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 ....

 

[justin]

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.

 

[justin]

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 I had originally made a FIRE budget that included $12000 per year for entertainment/travel expenses.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.

 

[Sarah in SC]

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!

Sarah

 

[bright eyed]

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...

 

[Charlotte]

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.

 

[Olav23]

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

But we all know eveyrhting always goes according to plan...

 

[SamHouston]

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.

 

[justin]

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

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. :

 

[FinallyRetired]

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%

 

[Nords]

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.

 

[haha]

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

 

[Darryl]

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.

 

[runchman]

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

 

[runchman]

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

 

[Olav23]

I actually went to a small island called Dominica for my honeymoon 6 months ago. It is one of the rarely travelled and non-touristy islands of the carib. I wholeheartedly recommend it. Beautiful place and great food. Any by day 3, everyone in the island knew us as the cute white couple on the island

I scuba dived for the first time. I will definitely need to do more of that in the future!

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

 

[kb56]

I heard, a while back, that raising a child through college can run up to $300,000.

But to quote a friend who had four. "I love my kids. I would not trade any one of them for a Million dollars - and I would not give you a nickel for another one."

 

[dm]

My kids are now 23, twins. Just when do they stop costing you?

 

[HFWR]

Kids don't cost much. I've got one for sale cheap...

 

[REWahoo]

My kids are now 23, twins. Just when do they stop costing you?

Emotionally: never

Financially: as soon as you realize continuing to subsidize them harms both you and them and cut them off.

 

[Moemg]

Emotionally: never

Financially: as soon as you realize continuing to subsidize them harms both you and them and cut them off.

What a great answer !

 

[youbet]

Emotionally: never

Financially: as soon as you realize continuing to subsidize them harms both you and them and cut them off.

And not to fear....... just because your kids are out of the house and doing ok in their lives, the grandkids come along!

If you let them, and I admit I do, the emotional ups and downs and the expenses keep right on with that next generation of rugrats! But the feeling of family inclusion and participation with the little ones seems to be good for me and overcomes the occasional aggravation.

 

[SLC Tortfeasor]

I saw figures put out by the US Government on this issue about a year ago. I think the government estimates that kids cost the average American family about $10K per year (though I'm not sure whether that's per child or on the total for all kids), until the kids are 18. Not surprisingly, the wealthier you are, the more likely you are to spend more than the average.

And obviously, once they hit college age, costs could really balloon, or they could cease completely, depending on how much financial support you want to give.

So, for a rough estimate, figure about $180K for the average American family to raise a kid to age 18, and increase that depending on how much more wealth you have than the average family.

 

[cute fuzzy bunny]

Somewhere between a dollar and ten million.

You get to choose.

 

[haha]

In many areas of the country you would likely not want your child to attend public school. I would not want a child or grandchild of mine to attend public school in Seattle for example. In our state test results have been published for school districts and individual schools. A perusal of these makes it clear that only a few well off suburban districts teach their students anything much.

50 years ago I started public high school in a Midwestern city. Within a week it was clear to me and my parents that this wasn't going to work, so they picked up tuition for private school. I later transferred to a tax supported magnet school that was fine, but not every city has these, and by definition admittance is limited.

So maybe the bunny is right that one can chose what a child costs, but I am glad that my parents felt that these choices were bounded by the need to see that things went well.

Anyone price orthodontists lately?

Ha