Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Cost of kids
Old 06-17-2006, 02:38 PM   #1
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 309
Cost of kids

I am one of those hopeless souls stuck in MegaCorp, but planning to ER.

I am 30 y.o., have my mortgage paid off (home worth 275K) and between my company RSP and my savings am putting approximately $40,000 per year in either my RRSP (retirement account in Canada) or non retirement funds. I currently only have about $40,000 in my retirement accounts as I just started doing this as my focus previously was on paying the mortgage off.

I am by profession an accountant so naturally I've built my own comprehensive Excel worksheet with fairly extensive detail on every possible scenario. By my projections I will definetly be able to retire at 50 and possibly at 45 depending on market conditions. Ideally I want to semi retire at 47 or 48 and work 2-3 days per week at that point (doing bookkeeping, tax returns, easy non stressful stuff) whereby I would cover my expenses and let my nest egg grow for 5 or 6 more years during the highest compounding period.

Of course planning like this means absolutely nothing as there are so many variables. Some of my projections are that I stay single, get married with no kids, and married with kids. Obviously the best result financially is getting married with no kids as there would be 2 income streams saving for ER.

Having said all this, I HAVE NO IDEA how much kids would cost. I assume my wife would have a salary of about $35,000 and that a child would cost $1,000 a month to raise for 18 years (and then 3% inflation after that). I am assuming that I would not pay for college (sorry kids, pay your own way like I did...plus schooling here is very cheap). How realistic is this figure? Obviously each phase of a child's life will cost more or less than others. Generally speaking I am assuming that having a 2nd income would offset the cost of children in my calculations but would be interested in hearing of better estimates for my projections. $12,000 a year adjusted for inflation seems reasonable to me though (that's about $220,000 over 18 years in todays dollars)
__________________

__________________
accountingsucks is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Cost of kids
Old 06-17-2006, 02:51 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Cost of kids

Have one and you will find out.

The biggest drivers of cost for us thus far has been needing a car and home big enough for kids. On a day to day basis, we probably spend anither 200 to 300 a month on kiddo consumables (food, clothes, diapers, etc.). I suspect that all of this will be dwarfed by school tuition and eventually college costs.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 04:25 PM   #3
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Re: Cost of kids

Remember, kids are a lot cheaper when they are young. The bigger they are the bigger the costs.

But really Kids are what it's all about, I wouldn't change a thing.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 04:28 PM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Re: Cost of kids

Quote:
Originally Posted by 73ss454
But really Kids are what it's all about,* I wouldn't change a thing.
Just think of yourself as a great big wallet on wheels...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 04:41 PM   #5
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 309
Re: Cost of kids

Can anyone comment on my estimate of $12,000 per year. What would really be useful is a breakdown of estimated costs by phases such as toddler, preschool, school, teen, etc......
__________________
accountingsucks is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 04:45 PM   #6
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,134
Re: Cost of kids

Quote:
Originally Posted by accountingsucks
Having said all this, I HAVE NO IDEA how much kids would cost. I assume my wife would have a salary of about $35,000 and that a child would cost $1,000 a month to raise for 18 years (and then 3% inflation after that). I am assuming that I would not pay for college (sorry kids, pay your own way like I did...plus schooling here is very cheap). How realistic is this figure?
accsucks,

You might want to do a search on "child cost" and take a look at the threads that come up. Maybe they can shed some light on the bottomless pit subject.

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:04 PM   #7
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Re: Cost of kids

But we will all thank you for propping up Social Security with more worker bees!

Small take, make the decision to have kids without doing a cost benefit analysis. If you really want kids, you won't mind whatever it costs. Even if you get a coupon for all costs paid for but didn't really want to be a parent, well...
__________________
laurence is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:09 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: Cost of kids

Quote:
Originally Posted by accountingsucks
I am one of those hopeless souls stuck in MegaCorp, but planning to ER.

I am 30 y.o. Of course planning like this means absolutely nothing as there are so many variables.* Some of my projections are that I stay single, get married with no kids, and married with kids.* Obviously the best result financially is getting married with no kids as there would be 2 income streams saving for ER.*

Having said all this, I HAVE NO IDEA how much kids would cost.* I assume my wife would have a salary of about $35,000 and that a child would cost $1,000 a month to raise for 18 years (and then 3% inflation after that).* *I am assuming that I would not pay for college (sorry kids, pay your own way like I did...plus schooling here is very cheap).* How realistic is this figure?* Obviously each phase of a child's life will cost more or less than others.* Generally speaking I am assuming that having a 2nd income would offset the cost of children in my calculations but would be interested in hearing of better estimates for my projections.* $12,000 a year adjusted for inflation seems reasonable to me though (that's about $220,000 over 18 years in todays dollars)
You belong in a movie. Maybe played by Martin Short, or Rick Moranis.

Let me give you some helpful advice that you will almost certainly ignore. You have made it to age 30, so your years of greatest vulnerability to every well padded tushy that walks down the street are behind you. Take advantage of this fact, and you just may be able to avoid wives, children and all the spreadsheet destroying uncertainty that they are likely to introduce into your heretofore very well calculated life.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:16 PM   #9
Thinks s/he gets paid by the post
cube_rat's Avatar
 
Join Date: Jul 2005
Posts: 1,466
Re: Cost of kids

The older they get, the more you will look like an ATM machine :P
__________________
fuzzy? cute?
cube_rat is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:52 PM   #10
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: Cost of kids

not to scare ya out of having kids but i'm 49 and still collecting my allowance.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:55 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Cost of kids

Can cost almost nothing or a whole lot. Depends on you.

40+ years ago families with piddly incomes raised six kids in a tiny house with no car.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 05:58 PM   #12
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Re: Cost of kids

Quote:
Originally Posted by Cute n Fuzzy Bun'ny
Can cost almost nothing or a whole lot.* Depends on you.

40+ years ago families with piddly incomes raised six kids in a tiny house with no car.
This was when most families had nothing to give.

Today most families have much more and tend to give much more. Not saying that you have to but this is what generally happens.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 06:01 PM   #13
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Re: Cost of kids

THose overblown estimates often include numerous afterschool activities, huge budgets for tutors and/or private schools, assume you are going to foot the enitre bill for college, you are going to buy them a new car on their 16th birthday etc. etc. I know someone making less than 50k a year and raising three kids. They aren't living lavishly, but they are doing just fine.
__________________
laurence is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 06:07 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Cost of kids

Quote:
Originally Posted by 73ss454
This was when most families had nothing to give.

Today most families have much more and tend to give much more. Not saying that you have to but this is what generally happens.
True. Now is that a good thing or not?

My wife and I were talking about this the other day. We both grew up in pretty dang "poor" situations. We werent really aware of it at the time though...

Whats better...time and attention or money thrown at kids? Note: there may be an ER tie-in involved
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 06:22 PM   #15
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 116
Re: Cost of kids

I think I would concentrate on the partner first. Pick a partner with similar ideas that you have on money management and saving and it should be much less of a problem.

for instance, a woman who enjoys taking care of kids, breastfeeding, washing cloth diapers and making her own babyfood is a totally different situation than someone who has every latest expensive baby thing they think up and buys the most expensive disposable diapers and formula and hires a babysitter so she can get her hair and nails done.

Even public schools have costs of field trips, and sports and activities need fees, special shoes etc. Food can be cheap or expensive. Obviously burgers on the grill with homemade french fries are a totally different cost than a trip to the McDonalds drive through. People who accept hand me downs or yard sale clothes are different the a babiesRus poster child.

It is really impossible to predict as there are so many unknowns. My children were my biggest money drain (we contributed the cost of a state college education to each) but also my biggest joy. I am so proud of them- they are happy self supporting individuals with partners we love as well.
__________________
shorttimer is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 06:34 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Cost of kids

st's mention of a partner jogged my memory. Actually, by far the buggest cost when they are young is the cost of daycare or the forgone wages of one of the spouses. Blows everthing else out of the water.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 08:09 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Cost of kids

Makes ER'ed diaper daddy a good thing, doesnt it?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 08:34 PM   #18
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Re: Cost of kids

Quote:
Originally Posted by Cute n Fuzzy Bun'ny
True.* Now is that a good thing or not?

My wife and I were talking about this the other day.* We both grew up in pretty dang "poor" situations.* We werent really aware of it at the time though...

Whats better...time and attention or money thrown at kids?* Note: there may be an ER tie-in involved
I think it's a tough balance. You give what you can and hope for the best. I know that I gave a lot of things that I didn't have to but hey, I did what I did.

It all worked out in the wash and now the kids/adults are 32 and 30 and doing well on their own. (thank God)

CFB you have a unique set up being home with your child all the time. That's one thing I missed when my kids were growing up.
DW was home full time but I sort of missed most of it. Now that my DD is working on grand child #2 in florida we have our house in NY for sale and looking forward to getting down to help her out.
I don't want to miss them growing up with what ever time DW and I have left.

With that said would you wan't a good deal on a house on Long Island? (hehe).
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Re: Cost of kids
Old 06-17-2006, 10:14 PM   #19
Recycles dryer sheets
VoyT's Avatar
 
Join Date: Feb 2005
Posts: 445
Re: Cost of kids

* To answer one of your questions: The USDA has had more than a few studies on the cost of raising kids. That $12,000 per year average sounds about right for middle-income family. Bankrate also has had some stories on the cost of raising teens.

* That being said, I think you'd better concentrate on finding a spouse first * You're assuming her income will help offset the expense .. she may be OK with that, or she may take one look at the little one and say, "Nope, not going back to work."* (It does happen.)

* *While you're making out spreadsheets, better consider these scenarios.
* * 1) You can't have biological children, so figure in the cost of an adoption. (Hint, both private and international adoption run in the 5 figures.)* Or figure in the cost of fertility treatments, IFVs, etc, which may or may not be covered by insurance.
* * *2) Your child has medical issues, so make your best guess about co-pays, equipment, therapy, etc.....

* * *

* *
__________________
"Coffee: the finest organic suspension ever devised." -- Kathryn Janeway
VoyT is offline   Reply With Quote
Re: Cost of kids
Old 06-18-2006, 02:39 AM   #20
Recycles dryer sheets
 
Join Date: Sep 2004
Posts: 250
Re: Cost of kids

Quote:
Originally Posted by Cute n Fuzzy Bun'ny
Can cost almost nothing or a whole lot.* Depends on you.
That's what I always assumed.* I look around and I see that the junior Marines who work for my husband make less than half or a third of what we do and most of them are doing just fine raising a kid or three.* Yeah, they probably aren't going to ER or pay cash for a Harvard education, but they aren't struggling either.* I figure if a 20 year old PFC can afford kids, we can too.* *When kids come along (in about 6 months now) we plan to continue our usual "off the top" savings and work with whats left.* Same as we already do but with the money likely going to different priorities ( fewer exotic vacations and dinners out).

Seems like anyone with a decent job and health insurance shouldn't worry all that much.* Although I too love to plan and spreadsheet, it seems a little overboard to project scenerios that are so...* theoretical.* Keep saving, find a compatible mate and then work it out.* Who knows, your priories may change.

__________________

__________________
FlowGirl is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Kids & College Empty Pockets Other topics 73 02-17-2007 10:49 AM
How much does your home cost??? Texas Proud Other topics 48 07-29-2006 12:13 AM
Good Schools for Early Retirees Kids thinkingaboutit Life after FIRE 24 03-05-2006 04:07 PM
Live by the kids? Risky Investment. BUM FIRE and Money 30 11-29-2005 11:50 PM
Scott Burns - High Cost of Living as a Family intercst Young Dreamers 6 08-23-2005 10:06 AM

 

 
All times are GMT -6. The time now is 10:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.