Disclaimer: This post is sponsored by PSECU, a Pennsylvania-based credit union.
We all know that raising a child is expensive, but have you ever stopped to think about the actual numbers or exactly how much it costs to raise a child from birth to age 18? Let’s take a look at those numbers and figure out exactly how much money you should start putting away if you’re raising one or more children.
Birth
The birth of a child is a wonderful and emotional time, but it’s also an expensive one. The amount of money that you spend during this part of your child’s life will depend on a lot of things, including where you live, the type of delivery, your health insurance and whether or not there are any complications with your health or the health of the infant.
For the sake of argument, let’s assume that you have good insurance with a $2,000 deductible for maternity care, and no complications. Without insurance, you could be looking at $9,700 bill for a normal delivery.
Adoption
If you choose to adopt instead of having your own biological children, expect to pay quite a bit more. The average cost of an adoption within the United States is around $37,000 and international adoptions are often even more expensive. Adoption is a wonderful thing, you’ll just need to factor the cost into your projections.
Raising a Child
The average cost of raising a child has hit an all-time high, as of the beginning of this year. It’s now estimated that to raise a child from birth to age 17 will cost families more than $300,000. Housing costs make up the majority of that amount, at 29 percent, with food coming in a close second at 18 percent.
This is where income comes in though – this number is for ‘middle class’ families that make between $59,000 and $107,000 annually. Families that fall below that tax bracket are more likely to spend around $275,000 during their child’s first 18 years of life, and families in the upper-class brackets are more likely to spend around $500,000 for the same period of time.
Families with two children will spend 27 percent less per child, and the number continues to fall with each additional child.
After Graduation
The expenses don’t vanish after your child turns 18 and leaves for college or moves out – you’ve still got college and even wedding expenses to consider.
College prices will vary depending on what kind of college your child chooses to go to. For the 2016-2017 school year, the average price including room and board for two-year community colleges was around $7,500 a year. Public colleges double that, coming in at $14,000 and private colleges are usually $26,000 or more a year.
Keep in mind that those prices are per year – so the cost of a full degree will be multiplied by the number of years that it is expected to take. A four-year degree at a private college will set you back $104,400. Most parents only pay for around 36% of that cost though.
Weddings can be an expensive time as well. In 2017, the average cost of a wedding was more than $35,000. While the bride’s parent can expect to fund 44% of that, the groom’s parents only spend on average 13% of that cost.
Even if your children don’t want a big extravagant wedding when they finally do get married, it’s a good idea to have a decent amount of money put away if you’re planning to contribute. If they don’t spend it all on the wedding, it makes a great honeymoon fund!
Raising a Child Could Cost You Around $355,000
If you’re planning on having a child, it’s a good idea to start saving now. How much money will you really need?
Based on the numbers above, raising an only daughter could cost you around $355,000 by the time they’ve graduated and got married. However, you can’t put a price on the joy and love you get from having a family.
For a full breakdown of how much it costs to raise a child or multiple children, check out this graphic below created by PSECU.
Leave a Reply