Skyrocketing Cost of Raising Kids Blamed on Two Major Expenses
I just saw my price tag and I'm shocked!
The first time I clapped eyes on the hospital bill for giving birth to my daughter I nearly popped my stitches.
That’s a lot of cheddar, yo.
And that’s just the beginning. The money just keeps flying out of your pocket. Diapers, formula, daycare, education, food, clothing, extra-curricular activities, computers, cell phones, prom dresses, college… The list is endless and the numbers keep ticking up.
As Yahoo Finance reports, the cost of raising a child from birth to seventeen is soaring, leaping 25 percent over the decade.
And, according to some people there are two very specific culprits. Can you guess what’s breaking your bank?
The skyrocketing cost of raising a kid is due to the rising expense of groceries and medical care. That’s according to the Department of Agriculture, which tracks annual expenditures on children by families. Here’s how it breaks down.
The government’s most recent annual report reveals a middle-income family with a child born in 2010 can expect to spend roughly $227,000 for food, shelter and other expenses necessary to raise that child – $287,000 when you factor in projected inflation.
And, no, the bill does not include the cost of college or anything related to the pregnancy and delivery.
Nearly $300 grand? That’s more than I’m willing to spend on a home at this juncture. Yikes. That’s why experts say it’s important to start planning for kids well in advance. But, as Matthew Saneholtz, a certified financial adviser says, “You don’t want to get too hung up on whether you’re ready financially, because no one is ever really ready and it works out in the end, but you do want to think about how you see that first year with a new baby,” he says.
Important issues to address?
Will you both return to work or will one of you quit to care for the child?
Does your employer offer maternity or paternity benefits?
Are you going to need a bigger car?
How much will your health insurance premiums climb after baby makes three?
You won’t necessarily have control over the process, but you should also discuss how many children you’d like to have and when you’d like to have them, as that affects the timeline for getting your financial house in order. For more tips on how to cut costs and the right financial moves to make click on over to Yahoo Finance.
You can also find Monica on her personal blog, The Girl Who.
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1) $287K assumes 2.4% annual inflation. Probably too low given the quickly escalating costs of just about all consumer goods.
2) Have the average family’s wages risen as fast as their expenses over the past 30 years? No. Wages have actually been flat. That is kind of the real scandal here.
Also, I can’t believe that, given the ridiculous cost of medical care, if you try to reform health care you are automatically a socialist. I think it makes you a responsible president.
This article is so on the money I just had twins. One can of formula is 25.00 it lasts maybe 3 days. How much is that per month, it doesnt include that a box of diapers is also 20 dollars and lasts for maybe 2weeks. Childcare for just my son while I worked fulltime was more than my rent. When I went to school my childcare expense rose to double my rent and I pay out of pocket. I have been on the waiting list for a childcare subsidy for 1 year although I have been approved and meet the requirements…how much will i pay for 3 children 2yo and lower? ALOT!!! This country is out of wack the money mongers drove up the value of everything then gave our country away for pennies on the dollar to other countries so we cant even get a decent wage anymore. WE have to complete with the global market place who at one time was trying ot compete with us…You have to be creative as a mom.
A homebirth with a midwife in 2007 in an otherwise expensive metro area was $3500 out of pocket. Consider this and consider other costs in line with alternate choices. Simple, whole foods are cheaper than processed. People don’t need to eat meat. Etc. etc. I’m not saying inflation doesn’t exist or we couldn’t use a national healthcare plan, but I also think there are myriad ways people can manage their own affairs more prudently.
Well, yes, you can PLAN for a homebirth, but still end up with a $100K+ emergency hospital delivery, surgery, postpartum complications, etc. The point is that while a few choices/expenses are under our control, many are not. I can plan less expensive, less processed food choices – but I can’t plan unexpected allergies, health issues, chronic diseases that require special diets. Etc. I can plan to stay at home because it’s cheaper than daycare – and then my spouse is laid off/dies/become ill and unable to work. As a country, we dramatically overestimate what we actually can control, cost wise.
Sooooo what? The only place I see I could use that amount of money is maybe in my retirement but that would never give me the joy that my kids give me. We are not struggling at all so the price tag is just an insignicant detail, my kids are worth a world more than that to me.
Also, if you’re paying for your own birth out of pocket, I guess you didn’t plan very well, did you? Having medical insurance in place ought to top your list of “things I need to take care of before I become a parent.” I don’t think I’ve ever paid a single cent for any of my delivery or maternity care and it’s occurred under several different insurance plans. And don’t even get me started on people complaining about the cost of formula and disposable diapers, because I don’t feel for you at all. Those are damn expensive choices and you made them. Deal.:/
Not everyone who has to use formula does so by choice. I fully planned to nurse my oldest but she was physically unable to latch on and pumping alone wasn’t enough to keep my milk supply from drying up 6 weeks post-partum despite everything my lactation consultant had me try (including prescription medication). We were not poor enough at the time to qualify for free formula through WIC but poor enough that it was tough shelling out $25/week (in 2002 dollars) for the formula.
The notion that everything that everyone does is just a freely-made “choice” with no coercion behind it and no consequences to it is the #1 stupidest delusion Americans are saddled with.
Linda…
I had to pay for my second son’s birth because we didn’t work at jobs that offer health insurance. Unfortunately it’s next to impossible to get private health insurance that covers pregnancy and/or labor and delivery. There’s also lots of people these days who have planned pregnancies who are employed or who have spouses who are employed when they get pregnant and then lose their jobs during the pregnancy. COBRA is really expensive.
I’m surprised that the cost of child care wasn’t mentioned. My DD is almost 3.5. We’ve paid for child care for a little less than 3 of those years to the tune of $60,000! We live in an expensive area. It’s not like she’s gotten exclusive care. In fact we currently have her at a YMCA pre-school program which is pretty cheap compared to others. So far we haven’t spent an appreciable amount more in food. Thankfully, we are lucky enough to have health insurance. She had to spend a week in the PICU at Children’s. We never saw the entire bill for that. I imagine it was astronomical.