Working on a budget to start a family? Take a deep breath and make sure you’re sitting down, because we have some news to share with you. It’s probably going to cost you about a quarter of a million dollars.
Well, it will cost you $241,080 , to be exact (for the first child). That’s the estimated figure for middle income families ($60,640-$105,000) projected by the U.S. Department of Agriculture (USDA). Before we tell you why or how to deal, we have to hit you with one more piece of bad news: that doesn’t factor in college at all.
Areas like childcare and education continuously get more expensive, and made up 18 percent of child-rearing costs for 2012. Wondering how that stacks up in the big scheme of things? In 1960, this segment only amounted to 2 percent of total costs. With more working parents, it makes sense that more of our dollars are going to things like day care.
In all other areas, though, financial priorities haven’t changed much for parents since the sixties. We’re allotting similar percentages to housing and transportation, and even less on food and clothing. But their grand total for raising a child only amounted to $195,690 (in 2012 dollars).
Blame the economy, blame competitive schools, or blame over-indulgent parents. But it’s reality, and there are ways to make sure you are spending your money wisely.
“One of the major expenses on children is food,” says Director Robert Post, PhD. “On our website we provide shopping strategies and meal planning advice to help families serve more nutritious meals affordably.”
Another thing to keep in mind is that another child doesn’t double the cost. Families with three or more kids spend 22 percent less per child, largely because of shared bedrooms, hand-me-down clothes, sibling discounts, and buying in bulk.
Families with an annual income below $60,640 will most likely pay less per child — closer to $173,490 than $241,080.
The statistics for a child born in 2013 will be released in the USDA’s annual report this August. That gives you plenty of time to win the lottery.
How are you budgeting for a baby?