As the parent of an only child, I get a lot of "suggestions" from family, friends and even strangers to have another kid. I've heard it all:
“He needs sisters and brothers.”
“He will always be lonely.”
“You need a daughter to care for you when you’re older.”
Still, no matter how much convincing they try to do, the decision to stick to only one child (or at least wait a while) stands.
The reason: Kids are expensive!
Although he’s only in first grade, my son, Darren, has already cost us quite a bit of dough. There’s medical insurance and co-pays, food, clothing, school supplies, field trips, his allowance and (the insanely high-priced) video games and entertainment. It seems the older he gets, the more he wants and needs—and the bigger the number on his kid "price tag."
Get started with a free financial assessment.
Get started with a free financial assessment.
I’m worried that by the time he turns seven, his dad and I will both have to take on additional jobs just to handle the expenses. And new research shows it's not just us—it's the new reality of having kids.
What Does It Cost to Raise a Kid, Anyway?
The cost of raising a kid from birth to 17 rose a whopping 25% in the past decade, according to the United States Department of Agriculture. In its most recent report, for a child born in 2010, a middle-income, two-parent family can expect to shell out almost $227,000 for the necessities needed to raise that child (not including the cost of the pregnancy, childbirth or college).
Factor in inflation and those parents are looking at a grand total of around $287,000.
Of course, housing, transportation, clothing, childcare and other miscellaneous expenses contribute to the large bill, but two major expenses associated with raising a child have climbed significantly.
Hint: They’re in your refrigerator and the medicine cabinet.
What We're Spending the Most On
In 2000, the grocery bill for raising a child to age 17 was a little under $24,000. In 2010, it had skyrocketed to more than $36,000.
To keep that same child healthy until age 17, in 2000 the fee was almost $9,000. By 2010, parents could expect to cough up double that amount, more than $18,000. (In fact, recent data shows that annual premiums alone for typical family health coverage rose 9% in 2011 to $15,073. We talked more about the rising cost of health care, and what you can do about it, here.)
As for your grocery bill, "the price of staple foods has been steadily rising, particularly because of global warming, and it impacts everything we consume on a daily basis," says Stephany Kirkpatrick, CFP®, LearnVest's Director of Financial Planning. "Rather than officially raising prices, companies tend to make smaller packaging. So what was a 24-ounce package is smaller, and we go through it faster."
While there's not much we can do about rising prices or shrinking package sizes, what we can do is become more conscious consumers. "As moms are working to balance work and parenting, we often find ourselves buying pre-chopped vegetables or the ready-made chicken dinners at the store, because we're looking for convenience, instead of sticking to a plan," says Kirkpatrick. "What will make the biggest difference is coming up with a budget, and sticking to it."
Now Take a Breath ...
Although the news may sound bleak, having a child doesn’t have to be financially crippling. "If you're reading this now and pregnant, or you just had a baby, don't panic!" she adds. "And if you're reading this and have grown kids, don't panic either! Take a step back, and think about the smart things your own parents did to make it work when you were growing up. Cook dinner and eat leftovers the next day. Use coupons! It might be old-fashioned, but they're there for a reason."
There are plenty of other things you can do to help curb the costs of having kids, too. Here's a handy list of LearnVest resources:
- Getting started. Are you pregnant, or did you just have a baby? Our 10-day Baby on Board bootcamp is chock full of ideas, tips and tricks to get you financially prepared for your little bundle of joy, including everything from setting up a nursery and deciding whether or not to go back to work to figuring out which life insurance policy is best for you, how to find and set up a 529 college savings fund and determining who will be your child's guardian.
- Family budgeting. Like everything else, handling family finances is much easier when you have a plan. We can help you figure out what a smart family budget looks like.
- Grocery savings. We have a ton of helpful advice to get you started saving on groceries. For starters, these eight ideas will help you stop wasting food, and these 14 tips will lead to huge grocery store savings. Plus, this guide will help you figure out when it's worth it to buy organic foods.
- Saving on health care. Don't get down on rising health care costs, either. We can help you save more money on prescription meds. Plus, read this to stop your kid from getting sick in the first place and find out how to tell if your child is getting run down.
- Cutting back on entertainment: Like I mentioned before, keeping a kid entertained (even one kid!) isn't cheap. If their activities are straining your budget, use these tips to save money on kids' entertainment, and read this to determine which kids' activities will get you the most bang for your buck.
Tell us, how do you save more money on family costs? Share your comments below or in discussions!