The Cost of Raising a Child in 2010

Filed under: Work Life

Child care costs can top $200,000 over a lifetime. Credit: sleepyneko, Flickr

Before you forge ahead with your family planning, you might want to take note that the U.S. Department of Agriculture estimates the lifetime cost of raising a child is well over $200,000 -- and that doesn't even include the cost of a college education.

The agency offers an online calculator to help couples plan for the cost of having children. According to finance expert Eleanor K.H. Blayney, the annual cost of child-rearing for a married individual living in the Northeast is estimated to be approximately $27,000.

Blayney, a certified financial planner with 20 years of experience, says it's important to note that the costs are estimated for a child up to the age of 17, so they do not include the price of a post-secondary education.

"The [Department of Agriculture] also estimates that for middle-income Americans, at 3 percent inflation, it costs $291,000 to raise a child from infancy through age 17," she says.
That's a lot of cash. What does a kid get for all that moola? Food, transportation, child care and education, health care, that notorious "miscellaneous" or personal care category, entertainment and noneducational materials. Housing accounts for the lion's share of the cost (35 percent) followed by food, child care and education each coming in at about 16 percent.

These are the costs most parents expect; after all, kids need roofs over their heads, clothes on their backs and food to eat. But there are "hidden" costs that mom and dad might not always consider when preparing for a child from a financial standpoint.

"I think most parents are aware of the type of extra household expenses attributable to a child, but they may underestimate the true costs," Blayney says. "One cost that is very significant is the lost earnings, usually of a mother, by the choice toleave the workplace, take part-time work, or 'lesser risk' jobs that are more amenable to flex hours or part-time arrangements."

The costs do fluctuate by age, and Blayney says parents should anticipate that annual expenditures will increase as the child gets older -- child care costs, for example, will be replaced by more transportation costs. And this: "Ask any parent of a teenager what 'peer pressure' costs in terms of clothing, gadgets and entertainment," Blayney says.

But you can stave off financial pain if you plan ahead, and Blayney wryly recommends that parents do so "with the first double plus sign" on the pregnancy test.

"I would also counsel women, in particular, to be aware that the longer they delay childbearing, generally the better in terms of reducing the cost of lost wages," she advises. "On the other hand, delaying too long could result in expensive fertility treatments."

Parents can save money by resisting the urge to have the latest and greatest for their kids and buying secondhand items, instead. There are also plenty of community resources out there for enterprising parents who are looking for low-cost child care and entertainment. Get ahead of the game by educating yourself about tax breaks for families in the form of educational IRAs or 529s to save for college, Blayney adds.

The kids can help, too, once they are old enough, she says, sharing several of the tips from her upcoming book, Women's Worth.

"I offer a number of ways parents can involve their children in household budgeting and decision making," Blayney says. "Example for a young child: Have them open the bills, and circle the amount that is due."

In this way, kids learn what services and utilities parents pay for to run a household. Give older kids some decision-making authority over a category of expense (Blayney suggests eating out or vacations), or have them prepare a project budget for a family outing.

Related: Just Say Yes to Cutting Your Parenting Budget

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