What does it cost to have a child? The answer seems definitely loaded, full of and if and questions about where you live, cultural expectations, family values, etc. Even so, researchers have tried to pin down a number of them, and some convincing results that relate specifically to American families are published in Family spending on children, 2015.
In the report, data collected from multiple sources on 23,297 married couple households and 7,030 lone-parent households is used to create estimates of money spent on things like housing, food and child care. . Parents can expect to spend between $ 12,350 and $ 14,000 per year each child, averaging $ 233,610 over a child’s 17 years at home.
Using the same data, the researchers also disaggregated the cost of raising a child by region, determining that married couples raising children in the urban northeast are expected to rack up the highest education costs. Life in the urban Midwest and rural areas of the country is associated with the lowest spending on educating children. The regional aspect of this report turned out to be extremely interesting, and we did some research to take a closer look at the cost of raising a baby – and how where you live changes the number.
Being pregnant and having a baby
Without a doubt, one of the first major expenses associated with the birth of a baby is the cost of pregnancy and childbirth. Although 91.2% of Americans are insured, this leaves a notable number of people without insurance and does not take into account excluded services. Uninsured parents in the United States spend about $ 10,808 for an uncomplicated vaginal birth, according to reports from Business Insider UK.
Having insurance does not necessarily save parents significant expenses. Break further, Business intern published issues provided by FAIR Health. Parents in Alabama have the lowest childbirth expenses in the United States, with the cost of an uninsured birth averaging $ 9,013.88 and an insured birth costing an average of 4,884 , $ 44. Having a Cesarean increases those expenses, of course, with an uninsured Cesarean section costing Alabama residents an average of $ 12,593.60 and an insured Cesarean an average of $ 7,404.07.
The northeastern states are among the highest numbers on the list. For example, in New Jersey, an uninsured vaginal birth costs an average of $ 16,674.62 and an insured vaginal birth an average of $ 8,755.88.
For parents with infertility, there are additional expenses that can be financially debilitating if you live in certain states. Only 15 states require insurance coverage for the diagnosis and treatment of infertility, according to the National Conference of the State Legislature, and some of these states do not require coverage for all expenses associated with infertility treatments. In New York, for example, IVF is not considered an eligible expense for insurance.
With only 15 states with laws imposing some sort of coverage for infertility treatment, many families find themselves funding expensive infertility treatments out of pocket, meaning becoming a parent can cost a small fortune before. even the arrival of the baby.
The cost of child care
Paying child care and school fees is often the next major expense parents worry about, and for good reason. Child care costs can quickly dominate a family’s budget.
“Education and child care for two children cost us about as much as our mortgage each month,” said Jamie Beth Schindler, one of the parents of a two-earner family. “I was not prepared for the share of our revenue that was going to go towards these costs.”
A quick glance at the How does your condition compare? figure provided by the Institute for Economic Policy shows that, relative to family income, child care is the most expensive in the Northeast, with Washington DC taking the lead with an average cost of $ 22,631 for a year of child care. Taken as a percentage of median income, this means that Washington DC parents with a median income spend 35.6% of their income on child care in their child’s early years.
These figures correspond to Schindler’s experiment. She says she was happy to see her housing expenses drop when her family moved from Los Angeles to Pennsylvania, but was shocked to learn that child care would cost her as much in the Northeast as it did in the United States. ‘Where is.
Comparatively, the southern and midwestern states have lower annual child care costs. The cost of infant care is $ 6,294 per year in Kentucky, $ 8,632 in Missouri and $ 5,747 in Louisiana. In many of these states, however, child care is still not considered affordable as it continues to represent a large percentage of median family income.
Meeting basic needs
When it comes to caring for a child, meeting their basic needs really begins to add up. In fact, two of the largest expenses reported by families with children include accommodation and food, according to the “Spending on Children by Families” report.
For the average family, housing accounts for between 26 and 33 percent of what parents spend on their children in a year. Spending varies from region to region, with urban areas in the northeast and west leading the way when it comes to spending on housing. Rural areas of the country have the lowest housing expenditure.
The purchase of groceries accounts for 18 percent of spending on children’s education. While it is not clear whether the cost of feeding a child varies significantly from state to state, a Go Banking Rates the article reports that southern families the highest grocery expenses, followed by those in the Midwest.
Having children usually involves health care costs. Even when both parents are healthy, it’s important to anticipate and prepare for expenses related to emergency room visits, allergy tests and braces, says Byron Ellis, a certified financial planner with United Capital Financial Advisors in The Woodlands, Texas.
The cost of “extras”
While this is much more difficult to measure, it’s worth noting that some of the most unexpected expenses associated with raising children have a lot to do with meeting expectations. It seems to be less tied to a region than to individual communities.
Take, for example, birthday parties. Thanks to Pinterest’s existence, having a party can come with a lot of pressure to run on elaborate themes – investing in favors, decorations, and games. An informal survey conducted by BabyCenter showed that 25% of families spend between $ 200 and $ 500 on a single party, while 11 percent of families spent more than $ 500. Mother of four children, Chaunie Brusie tells HealthyWay that it wasn’t just the cost of the holidays that caught her off guard, but that buying gifts for the parties her kids attend is a big expense as well.
There are also enrichment activities that are not included in traditional schooling and inflate the cost of raising children. These include sports expenses, music lessons, and swimming lessons to name a few. Even if your child only participates in one or two extracurricular activities, the costs multiply quickly.
“I was surprised at the cost of the courses and how quickly they add up, especially when you have two children,” says Mary Beth Forster. “I signed up my daughter for swimming for something like $ 75 a month, thinking it was quite expensive, but it looks average for a weekly class.”
Ellis says it’s in line with the expectations of the community you find yourself in that will have the biggest impact on the cost of parenting. “If you’re in a community that has highly rated schools and really proud of the percentage of their students who go to college and take their academic performance seriously… that means the pressure is still on.”
If you intend to raise your family in a community where sports, music groups and other extracurricular activities are a source of pride, there will likely be additional pressure to enroll your children in extracurricular activities, pay fees. tutors and foot the bill for travel and cultural activities. experiences whether you pay tuition at a private school or not.
Prepare for the costs of parenthood
If you are planning on having a baby, Ellis recommends approaching the discussion about parenting expenses as you would any other major financial decision.
“As a family you need to have a cash reserve,” he says. “It’s money that’s there for emergencies or opportunities that arise. Things are going to happen. That’s what a cash reserve is for, so you don’t have to use the credit card. “
As to how much concrete families need, it really depends on your monthly expenses. To calculate how much you need to set aside, add up your expenses for three to six months of living as a couple. Then add what you think you should pay for the additional expenses of a child.
“It’s difficult, depending on your region. In some areas you will have more needs, others less, ”says Ellis. “I would say if you don’t really know the numbers, go ahead and add one more month to it.”
In addition to preparing for those initial parenting expenses – medical bills associated with labor and delivery, childbirth and childcare – Ellis suggests parents (or future parents) plan for the seasons ahead and plan ahead. the cost budget they expect to associate with their new addition starting school, throwing a birthday party, and participating in classes or sports.
When the opportunity to grow your family is on the table, it can be hard to put emotions aside, but it helps to think about expenses as objectively as possible so that you can make informed decisions when planning for the family. future of your family.