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Past Parenting.SE questions have asked about the affordability of having a child but didn't provide a specific estimate of what it actually costs.

I found this USDA report, which estimates the cost of raising a newborn child from 0 to 18 by a two-parent family to be around $250,000. But that number doesn't provide much in the way of a range of estimates.

For example, is it likely that my expenses will be between $230,000 and $270,000, or is it more like it'll be somewhere between $100,000 and $400,000? That variability is important -- there's a big difference between needing to spend $270,000 and $400,000!

So, the single-point estimate doesn't tell me much in terms of how expensive it really is to raise a kid. Obviously every child is different, but are there any citations that can provide more of an expected range for whether I can responsibly afford it?

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John Feminella
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  • If you're looking from the perspective of "can I afford it", would annual minimums, rather than a summary range, be useful as an answer? I know of some sources I can pull together to draw a picture for a low-end ballpark, but I don't want to post it if it won't really address your question. –  Jun 04 '14 at 16:52
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    @Beofett: My question is really about understanding the variability around the average cost and how large it is, so knowing the minimums would be helpful, but it's only one piece of the puzzle. (I edited the title to hopefully be clearer in this respect.) – John Feminella Jun 04 '14 at 17:30
  • Is your purpose for this to find out whether you can afford a child, or is your purpose academic in nature (ie, you want to write a paper or some such on the topic)? – Joe Jun 04 '14 at 18:27
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    @Joe The former -- I want to know what we should think about having in the bank to responsibly raise a kid. – John Feminella Jun 04 '14 at 19:50
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    This is so incredibly dependent on your parenting style and general cost of living that you set yourself to. Some families don't buy many electronics and don't have cable television; some parents buy their children every gaming console and video game that comes out. Some families go on lots of vacations, others don't. Some families have their children sleep together in the same room, others want larger houses so everyone has their own room. Do you buy new clothes for all your children? Used clothes? Hand-me-downs? Cheap toys? Expensive toys? Those are the kinds of variations. – Doc Jun 04 '14 at 20:14
  • @Doc I understand that. I'm asking for actual statistics to back that up. Parenting is obviously a very subjective affair, but that doesn't mean we can't draw useful, objective conclusions from the many parents that have come before us. – John Feminella Jun 04 '14 at 20:25
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    The problem is that the dispersion isn't going to be a useful measure of how you will spend, because the dispersion is a result of several mutually confounding factors: location, family type (1 worker/1 worker 1 home/2 worker/etc.), availability of free childcare [ie, grandma], various parental desires/beliefs, medical expenses... there's so much noise that I can't imagine any useful statistic. Look at the table in the USDA paper on % of income spent, by income range: people spend more as they have more to spend. – Joe Jun 04 '14 at 21:41
  • "If you have to ask how much it is, you can't afford it..." – DA01 Jun 04 '14 at 22:04
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    But I have to agree with the others. If you're asking to see if you can afford it, the answer is: No. No one can afford it. But we all get by. – DA01 Jun 04 '14 at 22:06
  • Also, there are a lot of extra factors, eg: 2 kids is less than twice as expensive as 1, but a third one is much more expensive - due to most services and facilities assuming a 2+2 family. – Rory Alsop Jun 05 '14 at 15:20
  • This question does not help you become a better parent. It's actually a money/finances/budget question, hence is IMO offtopic fot this site. – Dariusz Jun 06 '14 at 17:58

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I suggest you go back and read the full report you cited more thoroughly, as I doubt you will find anything better than that. It is 32 pages long. You will find:

  • If your gross income level is less than about $60K, you will spend about 25% raising a child. At $60k-$105k, you will spend about 16%. Over $105K, you will spend about 12%. These are averages based on what people are currently spending. You do have the option of being more frugal.
  • Expenses increase slightly as the child ages, mostly in transportation costs.
  • It breaks down, by percentages, how much of that total is spent where. Housing, for example is 30% of this, childcare is 18%, food is 16%, and transportation is 14%. If you can find savings in any of those (or other) areas, you can reduce your overall estimate. For example, you may have two children sharing a room, so no additional housing cost for the second child. You may not have childcare expense if there is a family member to watch young children. Your employer may cover health insurance.
  • Some areas of the country are more expensive than others. If you live rurally, you will spend about 2/3 of what someone in the northeast (urban) area of the country will spend.
  • Second children are less expensive than the first.
  • People who make less spend less on their kids (even though it is a greater percentage of their income). A 2-parent family making $39K manages to raise a child for a total cost of $143,000. If you make more than this, and you spend as frugally as this couple, you too could do it for $143K.
  • There are charts at the back of the report showing cost by age of child, family income, single vs two-parent, and area of the country. Each chart is broken down by how much is spent on each area of responsibility (housing, food, etc.). If you can identify savings in any of those area, you can make adjustments for your family's estimate.
  • These estimates are for ages 0-18. They do not include college expense.

There's a lot of math involved in tailoring the information to your own circumstances. Fortunately, the website even includes a handy calculator to get you started!

MJ6
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    I did read the report thoroughly (all 32 pages), but again, all the estimates are of single-point values. They don't provide any sense of the dispersion in possible values. – John Feminella Jun 04 '14 at 17:28
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    The range is what's doable. For children born in 2012 to 2 parent families, raising a child can be done (minimally) for $9290 per year and maximally for $21,000 per year (based on this study of the way people actually raise their children now). That's a range between $217k and $501k. If your family makes about $80k per year, you will probably spend about $12,800 per year ($230k). You can choose to be more frugal or more lavish. Perhaps I am not understanding your question? – MJ6 Jun 04 '14 at 19:22
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    @MJ6 I think he's looking for something like a standard deviation. So while a 2 parent family earning $80k/year will on average spend $12.8k/year, what is the standard deviation from that value (how many are above that value and by how much, and the same for below). While I understand the approach from a scientific view, the fact is that it doesn't really matter, because the cost will completely lie with how you want to raise your kid(s). – Doc Jun 04 '14 at 20:21
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Here's a different take on the cost of raising children from the Fraser Institute (2009) in Canada which looked at numbers for Canada, the US, Great Britain, Australia and New Zealand. They found a significant flaw in traditional methods of calculating the cost of raising children, which is that adding children to the family doesn't so much add costs as it changes the way a family allocates its money. Consider this table:

enter image description here

On average, couples with one child tend to earn a little more, they eat out less and buy groceries more, they buy fewer clothes for themselves in order to buy for the children, their child care costs are partially offset by a reduction in their own educational costs, they drink and smoke less, and in the end, they are only spending about $4000 more per year (which is partially offset by their making more money).

This does not exactly answer your question, but it seemed significant research to add to the discussion.

MJ6
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