There is ample evidence that household finances affect relationships, stress levels, lifestyles, choices and happiness. Financial security and flexibility are obviously on any list of reasons childfree or childless couples are often happier than parents.
So if you are planning to have kids or wrestling with the decision, you might want to consult a calculator or accountant, especially in this uncertain era in which resources are limited, household incomes are stagnant or shrinking, inflation is lurking, and the cost of raising and educating kids has increased rapidly.
The USDA’s “Cost of Raising a Child Calculator” is a great place to start. “Cost” is a bit misleading, because the USDA numbers reflect what parents spend on kids before they are 18.
Dr Mark Lino, USDA Economist, explained in an email to WhyNoKids:
“The data we use (the Consumer Expenditure Survey) examines what families are spending. Cost can be a somewhat subjective concept. For example, we look at how much families are spending on children’s clothing. This is a different concept than what it may cost to adequately clothe a child (two pairs of shoes a year, five pairs of pants, etc.).“
The USDA site and study are worth a look. But start with this story published July 16:
Middle income parents of a child born in 2011 can expect to spend about $234,900 ($295,560 if projected inflation costs are factored in*) for food, shelter, and other necessities to raise a child over the next 17 years. Let’s look at the breakdown:
- A middle income family, defined as a married couple with two children and a before-tax income averaging $79,940, spent approximately $13,050 per year on each child for their first 18 years of life.
- Expenses averaged about $760 less for younger children from birth to 2 years old, and averaged $1,270 more for teenagers between 15-17 years of age.
- Teenagers are more expensive because they have higher food costs, as well as higher transportation costs when they start to drive.
- Housing accounts for the largest expense (30 percent) for a child. Housing expenses escalate with the need for additional bedrooms and bathrooms. This is followed by child care/education (18 percent) for those with this expense, and food (16 percent).
In (Child)Free Money #2, we will calculate how much money couples can save over 18 years by not having children and investing what they would have spent instead.