The cost of raising a kid right now if you want them to have a typical upper middle class upbringing is somewhere between 800k - 1.6M (2007 dollars) from birth to age 17. The exact figure depends on whether you want to send them to private school, whether you are feeding them all organic food, and a couple other things. Even the most basic middle class (no after school sports, summer camp, etc.) upbringing costs $500,000 - $635,000 from birth through college, with the range mostly depending on whether they go to a public or private university.
Your article doesn't really support your position: "The government says families in the top-third income bracket will spend $279,450 to raise a child born in 2005 through age 17 -- or about $16,000 a year. "
Also from the article:
"Add in extras like private school, a nanny and a flat-screen TV set in a kid's bedroom, and that figure climbs to $1.6 million."
"In San Diego, Jacqueline Jones recently rang in her fifth year with a $1,000 mermaid-theme party. The fête, held at a community pool, included a piñata, pizza, cake, juice boxes, customized goodie bags for 20 and a former beauty queen who arrived dressed head to toe as Ariel, the Disney princess."
"...toddlers in $800 strollers to 10-year-olds with cellphones. But for many families, drawing the line between attentive parenting and extravagance is a tough call;..."
"School itself is just the beginning. It might mean paying $16,500 in annual property taxes in an area with top public schools like Millburn, N.J., ..." (Note: Millburn has a median house price of $1 million, and a median income of $150k/year.)
[edit, in response to your edit: the USDA comes up with $11-13k for two-parent families with income of $57-98k/year. That's about $230k/child over 18 years, for a group of families all of whom are richer than average.]
We spent a lot on food (I goof around with cooking) and there is no way it is costing us $32,000 to raise both our children. Even if you normalized for the premium we pay on our mortgage to be in a neighborhood with good public schools, I don't think we're in that ballpark.
I wonder how much of this is just people sending their kids to absurd private schools.
If we accept that raising a child is a "full time job" (in reality it is more hours... not sure on the effort though), for their first five years, then all of the food of that full time parent eats, etc. adds in to that cost ;-P
You can argue that they would have eaten that themselves, however if they weren't full time caring, they would be out, earning. So one way or another you need to include child care costs: food and necessities for the primary carer, or day care/nanny costs.
I think that a lot of parents end up spending more than they need to with their children because they pander to their food requests. Learn to cook food that your children will eat, that is a simplified version of what you will eat (like my parents did)!
That said, I must learn to fix my own eating habits, then work on those of my girlfriend with her... then we might actually stand a chance at that last one if we get to that stage :-P
"The government says families in the top-third income bracket will spend $279,450 to raise a child born in 2005 through age 17 -- or about $16,000 a year."
The reason that the government figures are wrong is that, to quote Parenting, Inc. again, they don't include the cost of "maternity clothes, new home purchases and moving expenses, childbirth education and newborn classes, prenatal vitamins and extra fruits and vegetables, of Glider breastfeeding armchairs; of 'babymoon' vacations and bumblee-themed baby showers.
When the Wall Street Journal looked at the suspect government figures in an effort to make them somewhat realistic, it added costs such as sporting equipment and tutoring (which is no longer just for the wealthy-- the average income of a family seeking tutoring for a child is between $50,000 and $70,000) and came up with a total cost of raising a child to age seventeen that rangeed from $800,000 to 1.6 million."
To quote the WSJ directly, "We placed all these expenses on a spectrum, from those that parents and experts say are the most common, up to more unusual -- and costly -- frills. At the lowest end, our estimates came in at about $800,000 (in 2007 dollars) through the age of 17."
So the $800,000 figure is based on a survey of parents to figure out what they most commonly spend on various things.
Very true. Government figures don't include the cost of vacations that parents take before the baby is born (I had to google just to figure out WTF a "babymoon" is). They also leave out the cost of booze to lower the mother-to-be's inhibitions and the cost of the backseat of the car where conception occurred!
Alex, do you have any idea how the bottom 95% live?
"Alex, do you have any idea how the bottom 95% live?"
Statistically or qualitatively?
In all seriousness though, I have no aspirations of living the elite-NYC-preschool lifestyle. That being said, life is about tradeoffs and while some of the expenses might seem patently absurd, others seem like things that anyone might reasonably want for their children: to play sports, go to summer camp, to be able to get a chemistry tutor if they needed one, etc.
That's not to say that all of these expenses are necessary or that your kids can't have just as good of a childhood without them, but at some level enough of these expenses do have merit that there is a tradeoff.
Ever notice how many of the highest performing athletes in the world tend to come from exactly the kind of environments where parents don't have a lot of money to spend on things like sports?
So, maybe it's possible to play sports without spending a ton of money?
My kids play sports but not because I realistically think they are ever going to earn a living at it. It'd be nice if they could get a college scholarship, but even that is a long shot. The main reasons I have them in sports is that it's activity that keeps them fit, it's a social opportunity that allows them to make friends, and it helps them learn an important part of American culture.
There are definitely many low income kids who thrive at Grid iron football. Lots of poor Latin American kids play baseball.
The sports that require alot of money to play are mainly ways for upper class white kids to avoid having to compete against the black kids and still feel like they are good athletes. At least in the US.
Not to mention rowing, cycling, biathlon, triathlon, sailing, equestrian, mountaineering, etc. I don't know the exact numbers offhand, but it seems like the vast majority of elite athletes come from wealthy families and go through colleges like Yale and Stanford. The only sports that have even nominal representation from low-SES backgrounds are made-for-TV sports, but if you look at the overall picture it's not nearly as egalitarian.
That figure is laughable. Whatever survey it came from is also laughable. You are not laughable. But those factoids? Laughable. This is a silly argument.
Good to hear, because frankly I find it terrifying even though I'm still several years from having kids. That said some of the expenses from their infographic don't look entirely unreasonable. A decade worth of footwear might not cost $1000, but I bet it costs at least $800 when you take into account soccer cleats, penny loafers, etc.
Here, let me help you: DON'T buy your child 5 years of babyGap wardrobe. DON'T buy your child a decade's worth of Nike sneakers. DON'T buy your child a $4000 designer handbag, or 4 $1000 handbags once a year. DON'T build a swimming pool in your backyard (they kill more children than guns). DON'T take your child out to $32/person meals twice a month (that's "middle" expensive?). DON'T get bottled water delivery. DON'T buy a $2000 bed from Pottery Barn (that's "low" expensive?). DON'T take your kid on a $10,000 trip to Europe. DON'T spend $11,700 on "child therapy". DON'T buy your kid a $23,000 new car for their 16th birthday. DON'T send your kid to private school.
Whatever jackass made this infographic ought to be smacked upside the head with a dirty diaper.
It's the vacation you take shortly before the baby arrives. The wife and I took one (though I refuse to call it that). For the record, we probably spent about $250 on the whole trip (including fuel, lodging, food, etc).
It does not cost us anything resembling $66,000/yr (no, wait: 2 kids - $120k/year [?!]) to provide two school-age children with an absurdly privileged upbringing. I suspect college tuition is queering those numbers.
Four years of full tuition at an Ivy League school is $200k, so that doesn't even explain the absurd numbers. (And at Princeton, for instance, less than half of the students pay full price.)
Why is college tuition even considered an expense that parents have to shoulder? If you're rich enough and you want to pay the tuition, then that's just great, but is it really so bad to imagine that someone hovering around 20 would work for something useful for themselves? Sure, it's nice to have rich parents who will pay your expenses so you can "focus on school" (heh), but it's by no means a requirement.
IT'S NOT. You're not supposed to pay into your kids college fund until you've fully funded your own retirement. There are college loans. There aren't retirement loans.
there's also the opportunity cost of spending the money on child-rearing for 17 years and not letting it sit and accrue interest somewhere. great use of "queering", by the way.
True, but take a more reasonable number like $20k/year/kid, factor in the time value of money and you can quite reasonably hit a future value of half a million or more to get a single kid to college (let alone through it).
In other words, what would you have if you invested the cost of children for 17 years? a shitton of money.
(Granted, $20k/year is a hefty spend on a kid where I come from).
Can you post some sources? I'm extremely skeptical. If you have three kids in America, you're telling me that parents need to make $100k / yr just to cover the cost of the kids, not to mention their own costs? And triple that for an "upper middle class" upbringing?
Yeah, I'm really skeptical. The median household income in America is way, way less than that and I don't think most kids in America are living in the abject poverty these numbers would suggest.
it's not that absurd when you consider opportunity costs. even if your actual expenses are only 10k/yr, at a 7% avg rate of return, after 17 years you're down 170k plus ~140k in lost interest. at 20k/yr you hit 340k plus ~280k in lost interest.
This presumes people who don't have kids save the money instead, which quite frankly isn't at all true. People who don't have kids in large part just never learn to tighten their budget the way parents do, they live a higher cost of living lifestyle; in short, they act like single people. Now you could say "oh but I'd live broke like parents do and save the money" but frankly I wouldn't believe anyone who said that for a second.
In fact, I'd bring up the opportunity cost of maturity that having children brings you that you'd otherwise be missing out on by not having them. Maturity that quite frankly, probably saves you more money than you'd lose by having the child.
source: http://online.wsj.com/public/article/SB117288281789725533-WZ...
edit: The second set of figures was from p.6 of Parenting, Inc., which I believe come from here: http://www.cnpp.usda.gov/Publications/CRC/crc2009.pdf
You can actually read the entire opening of Parenting, Inc. for free on Amazon: http://www.amazon.com/Parenting-Inc-Pamela-Paul/dp/B003V1WDF...