Although you wouldn’t exactly call having a kid a depreciating value proposition — they’re your instant playmate, endlessly entertaining, and obligated to one day change your diapers — like your car, they immediately start costing you money the second you drive them off the lot. Childcare costs can increase your annual expenses by an estimated $8,000-$10,000, and depending on your income and where you live, it’ll run you anywhere from $176,550 to $407,820, to get the kid to college (age 17). Whatever cash you have left goes towards putting them through school; sorry, anti-anxiety meds cost extra.
If all this has you freaking the hell out, well, fair enough. At the very least, there are some budget calculators and tools to break down everything in detail for the super diligent and/or masochists among you. First, a quick rundown of where you can look forward to your money going:
- Housing: 30%
- Child care and education: 18%
- Food: 16%
- Transportation: 14%
- Healthcare: 8%
- Clothing: 6%
- Miscellaneous Expenditures*: 8%
*If you’re curious, this includes personal care needs like haircuts and toothbrushes, entertainment like media players and baseball mitts, all those books you need to make your kid a genius, and, if you have anything left, admission fees for the fun stuff you thought parenthood was going to be all about. Pro tip: All of the above increases in the summer when Junior’s got nothing but time to spend your money.
You can also use this handy calculator to input the amount you think you’re going to spend on various one-time and monthly purchases (car seat and crib vs. diapers and clothes, for example) during your kid’s first 2 years, and then see what it’s actually going to cost, based on national retail averages. Hint: it’s more.
Finally, the big, scary numbers. Based on the most recent U.S. Department of Agriculture reports (2014), the annual cost of raising a child in a 2-child, 2-parent, middle-income family (pre-tax income between $61,530 and $106,540), ranged from $12,800 to $14,970. Those averages increase over time, so total child-rearing costs through age 17 for that same hypothetical family amount to $245,340. Total expenditures for families in the lowest income group (pre-tax income less than $61,530) and highest income group (pre-tax income greater than $106,540), net out at $176,550 and $407,820, respectively. Remember that those figures are all in 2013 dollars and don’t account for inflation, then smash your head against the wall a few times.
All of the above is an average of regions, so the simplest way to shave a few dollars off the total would seem to be moving to the urban South ($230,610) or, better yet, the rural anywhere ($193,590) — particularly if you’re coming from the Northeast ($282,480). However, if you factor in the cost of a move to a larger space, as the real estate wonks at Redfin do, the cost of a baby’s first year could total as much as $26,000. Again, this varies regionally, so moving to San Jose for baby’s first year might cost you $41,600, whereas Atlanta suddenly seems a little less humid at $18,500. And it should be noted that Redfin wants to sell you a new place, whereas the Department of Agriculture doesn’t mind you trying to make it work in that 1-bedroom.
Finally, as noted above, the numbers fluctuate with family income. So you could always become poorer to spend less, but you might might want to check with the kid’s mom before employing that strategy.