The U.S. Department of Agriculture is reporting that it will take $245,340 to raise a child born in 2013 until he or she is 18 years old. Does that mean a family with 4 children will need an extra $1 million?
While some parents could spend this much or more, people should not get "sticker shock" and decide that having children doesn't fit in the budget. Yes, raising kids is expensive, but not prohibitively so. Each child in your family should not cost the extra $13,630 a year the USDA predicts.
Here are some tips to make raising children more affordable than the USDA estimates:
$340 extra a month to shelter a child. While some families may choose a bigger apartment or home with every child they add, most families will just swap out a single bed with a bunk bed and make do with existing accommodations. There are many reasons why adjusting to a small home may be the best financial move.
$42 extra a week to feed a child. This may be accurate, but a couple having their first child is probably going to be eating out less and will be able to use some of that difference to pay for baby food. Of course, when a mother chooses to nurse her baby, it eliminates the expense of pricey formula. Gardening can be turned into a family project that will supplement food needs. Also, buying food in bulk for larger families is less expensive per person than buying food in smaller quantities.
$159 a month for transportation needs. Most families can fit in a sedan until there are 6 people in the family. Families can choose to drive older cars without upsetting the budget when they need more seat space.
$817 a year to clothe each child. Kids are going to grow. There is no doubt about that. But frugal parents have long found ways to cloth children using hand-me-downs, thrift and consignment stores, and clearance sales.
$91 per month to provide medical care to each child. It doesn’t take long for medical expenses to add up. Kids seem to get hurt or sick often. This is one area where the USDA may be right. Families shouldn’t skimp on health insurance coverage for children. If the insurance is there to help out with the big medical expenses, families can focus on budgeting for the smaller medical expenses.
$47 a week for child care and education. This is going to vary between households where both parents work and households where one parent stays home. A second income will come in handy to cover child care and possible private schools. For a family with a stay-at-home parent, child care and education expenses should be substantially less.
Children who work. The USDA report does not address the fact that teenage children can get jobs that can reduce the amount parents have to spend. For example, many families have their teens pay for auto insurance, gasoline and clothing.
There is rarely going to be a financially perfect time to welcome a child to your family. If you wait until you have the money experts say you need, you may regret waiting too long. With some creative planning, you should be able to grow your family when you want without having to come up with an extra $13,630 annual expense per child.