The Costs of Raising a Child

The Costs of Raising a Child

Besides purchasing an expensive home, raising a child is the single most costly thing you’ll ever pay for in your lifetime.

If done correctly, raising a child is worth the financial responsibilities that come with it. Problems occur when people have children before they are financially ready. They either have a child by “accident”, or they have a child to fill a void in their life. Neither is correct, and ends up being worse for the child and society as a whole.

You should only be having children once your finances are in order and you have your life together with a significant other. The only reason for having a child is to provide the child with the best life possible, not the other way around.

Time for some tough love in this week’s blog post.

Expenses in Year One

Soon to be parents often anticipate financial help from family and friends, but in reality, this is rarely the case.

Financial help might occur in the first year or two, but not for the entirety of your child’s years. You need to assume the absolute worst case scenario, in order to protect you, your loved ones, and your child.

But if you haven’t realized the financial impact having a child has, you’ll get your wakeup call in your child’s first year. I’m a numbers guy, so let’s look at some numbers.

Prior to having a child, how much money would you save? Hopefully enough.

 Since most people don’t save AT ALL, financial burdens come to those whom have unexpected children.

Roughly 72% of Americans have less than $5,000 saved, yet a child’s first year costs on average $20,000. Anyone with common sense knows that these numbers favor no one.

Not only are parents not prepared, but they aren’t fully aware of where their child’s first year expenses come from (probably because they don’t follow a budget). Most parents think that diapers, baby items, etc. will be their biggest expense (around 48%) of their child’s year one expense when it’s actually the least. Only 37% of parents understand that the majority of their child’s first year expenses come from childcare, which averages out to roughly $8,000 per year.

Don’t Be Average

If you think your first few years of raising a child are expensive, buckle up for the next seventeen years. Your child’s expenses typically increase as they get older. Food, transportation, clothing, health care costs all increase with a child’s age.

The average costs of raising a child in the U.S. has recently topped $260,000. And if you historically track these numbers, they are increasing every year. To make matters worse, this $260,000 does NOT include your child’s college education. College education is an added bonus.

From, the average costs of raising a child from birth until 18 years of age can be broken down into the following categories:

  1. Housing – $84,420
  2. Transportation – $60,192
  3. Health Care – $40,214
  4. Health Insurance – $34, 895
  5. Food – $28,509

To keep this portion straight to the point, don’t be your average American parent that overspends on their children. Your top two expenses, housing and transportation, can be cut down tremendously by having one parent stay home and raise the kids. This requires you, your children, and your significant other to live on a single person’s income. 

The only way to make this possible is by cutting expenses while following a budget, and having a high enough income.   

Your Budget & Your Income

If you haven’t learned how to budget and fully reduce your expenses, you should not be having a child, period.

If you have an “unexpected” child, you are still 100% financially responsible for the upbringing of that child, so learn how to budget and cut expenses quickly. Your child is innocent and had zero say in the circumstance to which they were brought into this world. You are responsible.

Before intentionally having a child, you and your significant other need to strictly follow a budget for some time being. If not, the costs of raising a child will run you financially dry. The biggest reason for divorce are financial issues, and the pricey costs of children can easily be financial issue number one.

Also, you and/or your significant other need to earn enough money to afford raising a child, AND meet your financial goals. Sounds impossible, but it definitely is. This DOES NOT mean you need to be “rich.” A decent salary and a strict budget takes your far in this financial world.  

Like all financial decision, raising a child takes reasoning with a significant other to determine if you’re ready. However, the consequences of not doing so WILL have lifelong effects for everyone around you. Be responsible, take control over your life, and don’t let having a child ruin your finances.

Hope you all enjoyed this week’s blog post! If you’ve missed last week’s post on how deodorant is harmful to your body, click here. As always, don’t forget to like, comment, share, and subscribe!

“Spending time with children is more important than spending money on children.”

Book of the Month: “You Need A Budget” by Jesse Mecham

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