What an interesting coincidence: I received an e-mail from the What to Expect website and I saw an article on my Google Reader from The Simple Dollar, both about what the total cost might be to raise a child. What a difference! What to Expect said it would cost $242,000 (without college education expenses; that’s the qualification implied by the asterisk in my title), while The Simple Dollar opined it would cost $52,800 including savings for college.
The Simple Dollar’s total comes as a result of figuring in tax savings, reduced entertainment costs, and probably just more frugal estimates on things overall. While our entertainment costs are already quite reasonable for childless people, the tax savings are probably not calculated in most estimates. (The Simple Dollar’s estimate without calculating any savings in was $183,600–with college; so much, much lower than $242,000 without college.)
What to Expect didn’t explain how they’d arrived at their number, but I’ve seen a similar number tossed around, so I’m sure it can be found. In fact, I found a calculator that breaks it down.
I entered my stats and got a quote of $321,832 with public college included. I see that it includes $95,580 for additional housing costs (or $5310 per year). That’s one expense I can cross off, because we’re intending to be small-space parents and raise our kids in our condo for the first few years. When we move to England we will undoubtedly pay much more for a home, but I doubt it will be much bigger (if at all) than our current home, so the increased cost can’t be attributed to kids–we would still move, and still buy a much more costly (albeit no bigger) home, if we didn’t have kids.
The calculator also includes $37,746, or $2,097 per year, for transportation. It says it covers “the extra amount you’ll spend annually to buy new and used vehicles, vehicle finance charges, gasoline and motor oil, maintenance and repairs, insurance, and public transportation if you have a child.” Oh, OK. I don’t have a car and don’t plan on getting one for a kid. We live in a condo convenient to several bus lines, so we’re going to give it a go without a car. When we move to England, we may have to get a car depending on our home and job locations, but again, that won’t be anything to do with the kid. Maybe, if we do end up in a home that requires cars, we’ll someday help buy the kid a car, and of course we may need to take cabs more often with a baby, so I’ll only knock $30K off that estimate.
That brings the calculator estimate down to $196,252. I can’t really comment on the other expenses (clothing, food, medical, etc.) because I don’t know enough. Probably we won’t spend that much more on food because we are a bit extravagant now and could easily make our grocery shopping more modest to accomodate feeding extra people. And I haven’t calculated any tax savings. But I’ve already got it at less than $200,000 with college included.
I’m really tempted to try and track my spending over time, to see what the actual cost is. I can’t imagine the dedication it would take over 18+ years, though. Still, I might track my spending for awhile, just to see where it’s heading. For instance, I’m going to start taking prenatal vitamins now, even before I go off the pill. (Even that would be hard to track, because I’m planning on using pretax dollars to buy these things, so the tax-saving offset begins right away.)
Food for thought, anyway. If anyone is reading this, do you have any thoughts on the topic?
I haven’t tracked our additional, baby-made expenses over the past nine months, but I’d love to see What to Expect break it down year-by-year. I have to believe that the most practical parents won’t approach that pricetag.
I have trouble conceiving of the cost of 18 years of child rearing, but it’s much easier for me to think about the budget in terms of having a baby around. I loosely tracked how much we spent to get ready for ours, and forgetting that some of it was used and much actually came from generous friends and family, I estimated the value of the gear, diapers, clothes and delivery to be about $2,500.
Of course, cloth diapering by day helps keep costs down. Much of the time, he eats what we eat. He doesn’t require any extra transportation. We don’t keep more baby clothes around than we need, and I buy many of them used (pre-softened!).
I’m often flabbergasted by how much so many people spend on gender-specific baby stuff – not clothes, but strollers, car seats, bedding, furniture – even when they plan on having other children.
I’ll love following your spending tracker…
Thanks for the reply! Of course there are some things that would blow a budget–unexpected medical expenses, for example–but I do think these estimates are geared toward a pretty consumption-happy audience. $2,500 sounds much more do-able. I’m planning on getting everything used that I reasonably can, and mooching off friends that haven’t gotten rid of all their gear but don’t plan on using it anymore.
My vague, random goal is to have $10,000 set aside by the time the baby comes, and hope that covers most expenses with some left over for emergencies.
I probably won’t do much spending other than prenatal vitamins for a while as I’m not going off the pill until the end of March. But I’m sure I’ll have plenty of other fruitless ramblings and unanswerable questions between now and then!