Are you thinking of starting a family? Chances are, you’ve considered it once or twice. If you’re in a serious relationship, it’s probably come up in conversation. Children are a lot of fun and it’s a noble idea to want to continue your family’s legacy. But there are some costs associated with raising children that you should prepare for.
So in this video we are going to look at the cost of raising a single child from birth to the average age they are expected to move out their parents’ house, which research has disclosed is 22 years old. Although here’s an interesting fact, research has found that, more than 1 in 10 adults are still living with their mother and father at the age of 40, this is shocking!
In a report released in 2017, the USDA says it will cost $233,610 to raise a child in America today. That’s a harsh reality, especially if you want a large family. But there are some things you can do to be prepared for that reality.
The average middle income couple with 2 children is estimated to spend $233,610 to raise a child. This number doesn’t include college expenses, but with the average college tuition in America costing on average $33,480 at a private college and $24,930 at a public college, the cost of raising one child skyrockets to over a quarter of a million dollars. That’s one expensive kid!
The cost of raising a child obviously depends on several factors, Including housing, food, education from preschool through high School, child care, healthcare, personal care and entertainment expenses. In 2015, the USDA surveyed about 30,000 households and determined the cost really depends on your lifestyle and where in the country you live.
For instance, it costs an estimated $1,500 more to raise children in an Urban setting versus rural. It costs parents in the urban northeast about $264,000 to raise children versus just over $224,000 in the urban Midwest. Contrast that with moms and dads who spend about $232,000 to raise children in the urban south and a little over $245,000 in the urban west. Those living in rural areas pay the least at an average of about $193,020 according to the FDA data.
A family’s largest expense is housing, which accounts for 29% of the overall cost of raising a child in America. After that are food at 18%, child care and education at 16%, transportation at 15%, healthcare at 9%, 7% for miscellaneous purchases and 6% for clothing.
If you anticipate paying for your child’s private school education or hiring tutors, your costs would be higher than a family that sent their kids to public school. And if you grow or raise most of the food your family consumes, your food costs will probably be lower than the family that shops at the supermarket.
Although these costs are outstandingly shocking, here’s the good news. Families who plan on having 3 or more children can expect to spend 24% less on average per child compared to those with two kids. This is thanks to a phenomenon referred to as the “cheaper by the dozen effect”, thanks to the economies of scale with regards to children, as families increase in size, children may share a bedroom, clothing and toys can be reused and food can be purchased in larger more economical packages.
But don’t let all these numbers overwhelm you! Children may be expensive, but they’re worth every red cent. Now you can be more financially prepared to become a parent.
Thanks for watching.
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References:
https://www.usda.gov/media/press-releases/2017/01/09/families-projected-spend-average-233610-raising-child-born-2015
https://www.marketwatch.com/story/these-5-charts-show-how-expensive-it-is-to-raise-children-today-2018-03-29
https://money.cnn.com/2017/01/09/pf/cost-of-raising-a-child-2015/index.html
http://time.com/money/4629700/child-raising-cost-department-of-agriculture-report/
https://www.telegraph.co.uk/women/mother-tongue/9170709/Why-the-average-British-adult-is-19-years-behind-on-their-life-goals.html