Whether you’re a single parent raising the kids on your own or contemplating divorce, it’s important to understand the true cost of raising a child before you negotiate child support payments with your partner.
According to the latest statistics released by the U.S. Department of Agriculture, parents will spend an average of $235,000 to raise a child born in 2011 to the age of 17 (not including the cost of college). Consider, however, this is simply an average. According to the report, lower income families can expect to pay less, approximately $212,000, while the highest income can expect to pay $490,000.
What does this estimate include? It includes housing, health care, child care, school expenses, and clothing. If you want to take a vacation or throw in music lessons you can expect to pay even more. Obviously, some of the highest costs can be housing, child care and elementary education.
Downturn in Economy makes it tough for families
Unfortunately, many families who have lost their jobs or who have been unemployed for months may be facing challenges unseen in recent generations. Given the current economic situation, families will have to make some tough trade-offs. It is no longer about whether or not they can take a great vacation but trade-offs may be more difficult such as what types of food can be purchased or whether the family needs to move into a smaller house.
Childcare and Education costs rise substantially
The USDA’s Expenditures on Children by Families report also notes the two fastest growing expenses for children are educational costs and child care costs. In 1961, the year the first report was issued, the cost of child care and education totaled 2% of the overall costs for child rearing. This cost, however, has increased to a whopping 18%.
In fact, it’s not unusual for many families to find the costs of daycare for several kids to be thousands of dollars each month, more than some families pay for their mortgage. The cost of childcare has also led to a growing trend of one parent returning home to care for the children, and increasingly this is the father.
So what do you do when the costs get too high? It’s time to retool the budget. Many families are able to cancel unnecessary services, sell unused items, delay large purchases and ask friends and family members to help with baby-sitting.
Experts note that they have seen many families successfully cut their costs by developing a budget or a spending plan. In fact, the first step to cutting costs is understanding how you and your family are spending the money. After you understand where the money is spent it becomes easier to identify areas to trim.
If the small cuts don’t get the job done it’s time to get even more serious by getting a second job, moving to a cheaper house, getting rid of cable and cell phones and driving one car. These cuts are tough but often necessary to ensure you don’t spend more than you make.
How do you cut costs with kids?
Keeping costs down with kids utilizes the same principles: buy used clothing, sell items at consignment shops, use coupons, eat at home, buy online, and find free activities in your community which are free.
Sometimes if you take the right steps you will find the cost to rear children is not as high as some people think it has to be. In fact, what we think our children need and what children actually need can be quite different.
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