Cost of Raising a Child

Cost of Raising a ChildIf you have had children then you are more than aware of the costs involved with raising them on a day to day basis. For new to be parents it’s probably impossible to fully comprehend the cost of raising a child so it pays to do your research and make sure you are financially sound before going into the situation.

I don’t have children and have no plans as yet but will never rule it out. I always say that you should be able to provide a child a very comfortable life before bringing them into this world. Of course here in Egypt I am often told that is silly and God will work it ou somehow….. Sadly I don’t follow that plane of thought. Planning and providing susbstantial financial support is paramount.

So, What is the Cost of Raising a Child in USA?

I won’t talk about costs for raising children outside of USA as this article would never end. I once heard that a million dollars was required for 18 years of a child’s life. That sounds like a lot and from my basic research it looks more like the figure is between $180000 and $250000 for the first 18 years obviously depending on where you live and what kind of life you give the child.

The United States Department of Agriculture (USDA) has an excellent child cost of living calculator that allows you to enter your region in USA, income bracket and more than one child including their age to give anual results.

Here are a few examples from the calculator.

Child under 1 years with two parents earning under $57000 per year (overall USA).


Housing
Food Transportation Clothing Health Care Child Care and Education Other Total
National Costs: $3,700 $1,388 $1,238 $788 $738 $2,338 $525 $10,713

Child 10 years with two parents earning under $57000 per year (overall USA).


Housing
Food Transportation Clothing Health Care Child Care and Education Other Total
National Costs: $3,700 $2,363 $1,425 $713 $838 $1,488 $775 $11,30

Obviously these costs are estimates so it’s always best to pad them out a little and add for certain events such as sports for the child, trips with school, birthdays and Christmas and a whole host of other expenses.

The upper $250000 brackets sounds more realistic to me.

The cost of raising a child does not stop at 18….

It isn’t always the case but more often than not you will have to keep helping a child out financially after the age of 18. College is very important in USA these days and it’s getting ever more expensive. $40k per year is not abnormal for school and if you have planned things right a decent college fund could cover the bulk of the expenses leaving your child to worry about learning and not loans. However I do think that by the age of 18 a child should be doing some things financially on their own. At least a part time job during undergrad to pay for their social lives and maybe contribute towards housing.

Also times are tough for the youth with finding good employment and getting on the property ladder and many people are staying at home longer or borrowing deposits from parents to get out.

The bottom line is the the cost of raising a child is certainly not cheap! A million dollars set aside would not be a terrible idea!

You may also be interested in reading an excellent article from Financial Samurai “Don’t have children if you can’t take care of yourself“.

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