Having a child isn’t cheap—leading up to the birth there are medical bills and after the birth, there’s childcare, housing, food, and medical bills. But out of all of it, childcare is reportedly one of the biggest expenses in families’ monthly budgets. According to Care, “59% of families are budgeting to spend more than $10,000 in yearly childcare costs,” and over the first 17 years of a child’s life, a family can expect to pay up to $233,610 to care for the child, meaning that on average it takes a quarter of a million dollars to home, feed, clothe, and educate a child.
This amount is broken down into the major components of childcare:
- Housing – 29% ($82,525.30)
- Food – 18% ($51,222.60)
- Childcare and Education – 16% ($45,531.20)
- Transportation – 15% ($42,685.50)
- Healthcare – 9% ($25,611.30)
- Miscellaneous – 7% ($19,919.90)
- Clothing – 6% ($17,074.20)
From the first ultrasound to the first job, parents are constantly faced with what seems to be a truth concerning their child’s care: higher costs equate to higher quality.
The COVID-19 epidemic has changed the way that childcare is provided and how much it costs to raise a child. Children are now living at home with their parents, or at school with their parents. This makes it more challenging for parents to plan and manage child care. Parents are faced with yet another question: “How can we manage to work, care for our child, and all this while there is a pandemic?”
The pandemic has affected parents and children, which has made things more unpredictable. The transition to at-home learning is not without its challenges. Or “How will we find the time and money for us to quarantine the children who were exposed?” Once able to rely upon the school to care for their children while they worked, families now have to figure out how to fund childcare.
Planning to bring a child into this world can seem overwhelming and even impossible, especially in the face of a pandemic. However, it doesn’t have to be difficult. It doesn’t have to be difficult to find the financial support your child requires.
Prepare For Expenses
Knowing the average costs of raising a child is important, but it’s equally important to know that there are ways to cut back on costs. For example, you don’t need to spend money on a new nursery if your old room has enough space for another bed. If you’ll be able to breastfeed for at least a year, the formula won’t be an expense for you either. As your child gets older and begins going to school, you’ll find that the costs drop even more — although that means new expenses like school lunches and after-school activities will take their places in your budget.
And don’t forget the government subsidies that may be available to help you pay for childcare or education expenses — keep an eye out for them during your research!
- Start saving before your baby arrives by putting aside even small amounts for major expenses, such as college tuition, that may come years down the road.
- Avoid taking on unnecessary debt by making sure you can pay off credit card balances every month and not borrowing more than you can realistically afford when buying a home or car.
- Once your child is born, start contributing to his or her college fund right away so you have time to save more than if you wait until he or she is near college age.
- Open an account with a financial institution that has no-fee savings accounts and automatic savings transfer options so you can easily contribute funds to your child’s education.
Expect The Unexpected
We all know that having children means being able to deal with the unexpected. You can plan for unexpected events and focus on the most important things: Helping your family succeed.
It’s essential to come up with a plan for the unexpected. That seems counter-intuitive but the idea is to build up savings specifically for the unexpected. And there will always be something unexpected!
The unexpected never stops: illness, injury, summer camps, extra activities (for example did you know an Irish Step Dancing dress is thousands of dollars for one dress?), growth spurts, entertainment, fashion and so much more.
Plan For the Future
When your children are young you can’t wait for them to get older so you no longer have diapers and all those additional expenses. But then, they have proms, graduations, college, weddings. There are so many programs you can take advantage of depending upon what you are saving for.
Consider life insurance, wills, retirement plans, college saving plans, etc.
Other Factors in The Cost To Raise A Child
Location
Where you live plays a major role in the cost to raise a child. Considerations include rural areas, urban, North, South, East, and West.
Income and Lifestyle
How much you as parents earn plays a role in the cost to raise your children.
Age
How much is spent on a child not only varies based on different milestones in a child’s life but also based on the age of parents? What stage of life are you in when you have your children?
Number of Children
Brand new parents of a first child may tend to spend far more than on a second child. Conversely, the youngest child after everyone else has left the “nest” may also be more expensive.
Single Parent Or Couple
Raising a child or children on your own is far more challenging financially than if you are a couple.
Overall, there are many hidden costs affiliated with having a child. But of course, these costs will vary depending on the parents’ socioeconomic status. Let’s not forget, there are indeed many benefits to having a child as well. But don’t let that detract from the new (and often unforeseen) expenses involved in raising a child. It could certainly put quite the dent in your savings account – and it may not be welcome news for some.