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The Kid$ $uestion....
Old 07-24-2004, 02:04 PM   #1
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The Kid$ $uestion....

I don't have kids yet...28...would like to have first child within the next 3-4 years.

Question for the parents...

What's a good rule of thumb to use for annual expenses per child? * Was spending linear, concave, exponential, etc? *What were some things that weren't so apparent prior to braces, soft-ball practice, and piano lessons?

Experienced ones...lead us! *

8)

TD
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Kids will take all you have...
Old 07-25-2004, 03:02 AM   #2
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Kids will take all you have...

... and just when you've given what you're absolutely sure is your last ounce of effort, they need a little bit more.

Oh, you mean money. Well, if you believe what you read on the Internet then you could start here: http://www.babycenter.com/costofchild/

College is the big, scary, long-term project. I've heard the story of the 17-year-old who made a deal with his parents. If he graduated from high school with honors, they'd give him his college fund and he'd never bother them for money ever again. They agreed, he made it, they turned over the money, he ran the numbers on FIREcalc, and he skipped college to become the world's youngest ER.

Others feel that college is best appreciated when it involves personal work & sacrifice-- from the kid, not the parents. I have mixed feelings on that approach but I can certainly agree with parents saving up four years at State U and letting the kid make up the difference. In our case, we've been saving $100 week since the first week.

As far as raising babies, there are two schools of thought. One is "I'm going to have lots of kids so I'll use everything to its max and I'll pass all this hardware on to my eldest for their family." In that case you might check your parents' inventory, or else you'll want to pay through the retail nose for new and get 2-3 decades out of it... and you can stop reading the rest of this post.

We're using the "Goodwill & garage sales" approach, which started with buying (*gasp*) used baby furniture. Now, before the Consumer Product Safety Commission jumps into this, our first purchase was a subscription to Parents magazine. Within two issues we were experts on all the horrible killing machines, I mean baby furniture, in existence. I think our insurance company gave us a free car seat but we did just fine on used cribs, carriages, strollers, and toys at half-retail or lower. Frankly, cardboard boxes & blankets work just as well.

We don't break out groceries separately but that cost is all over the map. If Mom is breastfeeding then it's not much more than your normal grocery bill. If you're using formula, well, some kids eat more than others. Ours started at a quart a day and quickly shot off the charts. Diaper consumption was pretty impressive, too, which I vaguely remember was in the neighborhood of a dozen a day. (Don't start with the disposable vs cloth debate, it's about the same expense and it's less than 1% of the landfill. Do what makes you feel more virtuous and don't bother us with the details.)

I think the rest of the expenses are lumpy. Baby prep costs a lot until they arrive, then you're too tired to go anywhere so things are cheap for a while. After a couple years they're quite mobile so expenses start to rise, and then expenses absolutely explode when kindergarten & school supplies merge with sports & social activities. If everyone's working then childcare will be a constant until the kid is out of elementary school. And we have yet to experience the teen spending years, where we'll probably cough up even more but won't be permitted to watch it being frittered away. (Eh, kid, get a job.)

According to my records, as of yesterday we've spent $61,259.78 on our almost-12-year-old. That doesn't include groceries, which would probably add 50% to the total. Nor does it include the college savings. And it doesn't include a number of trips to America's finest franchise juvenile-dining facilities.

The majority of that, $25K, was for nearly nine years of childcare. Another $3K was for toys, but it doesn't include gifts from grandparents and indulgent aunts/uncles. Another $2500 was for various short-lived sports (gymnastics, dance, t-ball). $10K has been sucked into the school system-- Kumon, school supplies, bus fare, lunches, & field trips. Hopefully you can avoid $500 for six months of hula lessons and another $9000 for three years of horse lessons (dressage-- and we don't even own a horse). Three years of Scouting sucked down another $1000. The rest of it was spent for a good purpose but ended up in the "I'm too tired to care so it's miscellaneous" data-entry category.

Our kid has been extremely healthy and we've only had one broken wrist. Good luck with yours.

We've just been quoted $4200 for what I'm told is fairly straightforward orthodontia. We're doing it without dental insurance, which is a healthcare rant for another topic.

Overall I think that parenting is better than childlessness, but I've belatedly realized that it's a life sentence without parole. My brother-in-law and his wife are perfectly happy to be childless (while spoiling our kid) and I know several sainted couples who have raised a baseball team of their own and then take in foster kids. Of course under that bell curve your expenses will vary widely.

So plan & budget all you want, but it won't survive the first labor pain!


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Re: The Kid$ $uestion....
Old 07-25-2004, 06:29 AM   #3
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Re: The Kid$ $uestion....

Mrs. Zipper and I really never gave it much thought. We have 2 sons one 32 and the other 30. They are happy productive guys and the growing up years were probably expensive but we are a family and whatever it took we made it happen. Don't dwell on the dollars and cents thing, just do the best job you can. We are grandparents now and cherish every minute. We were both there for our boys and our memories are priceless!
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Re: The Kid$ $uestion....
Old 07-25-2004, 08:06 AM   #4
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Re: The Kid$ $uestion....

Hmmm...that baby web sites cost profile includes $6500 a year for "housing".

I'm stunned. I had assumed all along that the baby would be living with us.

Guess the missus and I better go start looking for a small apartment nearby.

As far as costs go, my thinking is that the kid can follow me around and eat/wear whatever he happens to find, providing he gets to it before the dogs do.
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Re: The Kid$ $uestion....
Old 07-25-2004, 08:39 AM   #5
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Re: The Kid$ $uestion....

I thought I had planned the early-years expenses out SO well. I had calculated the costs of child care, and had budgeted for my 3-month leave from work.

Somehow I forgot to count the loss of salary for the working part-time, which I did for a number of years. Believe me, adding up the cost of diapers and babysitters and strollers (used, of course), paled in comparison with the OOPS of lost wages.

And somewhere right in there, my younger stepdaughter (who was 17 at the time) fell apart in school and needed prep school tuition. . .

They were very lean years. I wouldn't consider trading it, none of it, for childlessness. The delight I have taken and continue to take in my daughter rivals nothing else in my life.

Anne
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Re: The Kid$ $uestion....
Old 07-26-2004, 03:20 AM   #6
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Re: The Kid$ $uestion....

TD,

As one who doesn't analyse 'cost' so much as 'value', my kiddie is priceless.

Trust me when I say that you could drive yourself insane trying to analyse this (should we save for the pony now or allocate the 2008 bonus to the ''Equestrian Entertainment Contingency Budget''??)

I do not think you can ever predict what a child will cost: every kid is different and so, more significantly, is every set of parents. I am pretty sure that a couple of overspending, wasteful parents will overspend and be wasteful with their kids. Conversely, the more fugal, less wasteful parents will have ''cheap'' kids.

Nevertheless, we did look closely at the significant expenditure that a child will unavoidably incur, given our own specific circumstances. Thus, we specifically budgeted in advanced and saved (continue to save) ONLY for the following:

1 ObGyn costs and hospital / delivery.
2 Initial Hardware (Cot, pushchair, etc)
3 Education (very expensive due to our circumstances - we currently save $2000 a month, but that is based on having a 2nd child)

That was / is it. All future expenses will be covered on an ongoing basis and judged on their merits as necessary, desirable, delayable or unnecessary.

That said, we were in our early thirties with a good financial basis before we had our child (now 6 months old and our pride and joy), so those extra dollars per month on food and diapers do not really cause a ripple on the monthly budgets. We are well aware that the costs will rise as ''Offspring 1'' grows, but we will take those as they come and adjust our spending accordingly. We have acknowledged in our longer term projections that our current monthly surplus will decrease (and currently allow a deduction of $500), but that is a close to a ''budget'' as we really want to get.

So try not to look at the little darlings as accounting items. Hey, I do not budget for what my wife will cost!!

Lastly, one thing that I am very pleased we did (and would recommend to anyone planning a family) was to set up the Education Fund early - believe it or not, the Ed Fund was started with the few hundred dollars that we had left over from our wedding budget!!! What kind of sad ultra-advanced forward planning is that!!!!!!!!!


Simon888 (parent for nearly 6 months and loving it)
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Re: The Kid$ $uestion....
Old 07-26-2004, 04:33 AM   #7
 
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Re: The Kid$ $uestion....

I don't know how much my 21 year old daughter has cost me in the past but looking ahead 3 more years of college, approximately $15,000 per year tuition, room and board, etc. (she does work to supplement her needs) so I figure $45,000 and I will be free at last.

Jim
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Re: The Kid$ $uestion....
Old 07-26-2004, 12:50 PM   #8
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Re: The Kid$ $uestion....

Great question TD

We don't have any rugrats yet, but I'm guessing that the clock is ticking...
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Re: The Kid$ $uestion....
Old 07-27-2004, 12:34 AM   #9
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Re: The Kid$ $uestion....

Hey Tommy,

One more thing to add to my post above.

You say you are looking to be in the family way within 3 - 4 years, that is early 30's for you (and similar for spouse I guess).

Well, you sound a pretty switched on and financially aware kind of guy - you are getting the assets up and the investments rolling and you are pummelling this board for insight, advice and guidance.

Your track record says to me that ''this guy will do well in the long term, he's knows his priorities and has a great, solid foundation''.

So please do not worry and fret too much about the family finance thing. Put the calculator down and enjoy some serious practise for the baby making!!!!



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Re: The Kid$ $uestion....
Old 07-27-2004, 10:29 AM   #10
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Re: The Kid$ $uestion....

HAHA!

*off to practice*

8)
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Re: The Kid$ $uestion....
Old 08-20-2004, 12:08 PM   #11
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Re: The Kid$ $uestion....

That web sight is a little squirrelly. *They must be inflating the numbers over time, and then re-allocating the nominal values evenly over 18 years.

I have 4 children age 0 - 6 and spent about $5k on things that were exclusively theirs in the last year (toys, presents, clothes, lessons, camp, etc). *The largest "expense" by far is the loss of my wife's income. *Without that, though, there would be substantial childcare costs that I don't have. *The tougher thing to figure out (but is substantially more than $5k), is the increased cost of many things we own or do. *Vacations cost more, cars (or more accurately vans) cost more, houses are more, admission prices to wherever you're going is more. *We're spending almost twice as much as we spent before we had kids, and we're certainly not living a more lavish lifestyle.

For me it's not an expense -- these kids are my emergency retirement fund. If my cash runs out when I'm 80 they're going to support me.
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