22 May Cost of Raising a Child
First time parents are often overwhelmed by the unexpected jump in their expenses after having a baby. Everything from diapers to formula to doctor visits will increase a family’s spending exponentially. The 2013 figures from the Department of Health and Human Services (based on a U.S. Department of Agriculture survey) calculate that the basic annual cost of raising a child is $4,020, which doesn’t sound so bad until you add the cost of raising that same kid to age 18 and figure in the 30 year average inflation rate of 3% which brings us to an average $234,900 for those earning between $59,410 and $102,870 per year.
It should be noted that these figures do NOT include any college or university education or allowances for the child remaining dependent after the age of 18; but with the average four year public university tuition hovering around $15,400 according to the National Center for Education Statistics, it certainly is something significant to consider. Those earning less than $59,410 can expect to spend $169,080 to raise their child while those who earn more than $102,870 per year may spend upwards of $389,670.
No matter what your tax bracket, I think we can all agree that while children are the most rewarding expense we will ever incur, affording them does not come easily without proper planning. Getting assistance from a qualified Financial Planner can ease your uncertainties when it comes to preparing for a baby or saving for college tuition.
Source: Post Secondary Institutions and Cost of Attendance in 2012-2013