You have read those cost projections for raising children. MSN, back in 2001 projected a cost of $249,180 (over $350,000 in 2010 dollars) for a family with a $65,800 or greater income. The Baby Center web site tells us the cost of raising a child from baby to adulthood is $266,698. The Wall Street Journal estimated the cost at $222,360 last year.
While I am not one to dispute the research of such prestigious publications, I simply can’t believe that the average parent with the average baby one might encounter in an average grocery store or sporting event or church service is really going to spend a quarter of a million dollars raising that child. Something somewhere is flawed.
It has been a few years since we raised our four children (our youngest is 30) but I can assure you that Janice and I didn’t spend an extra million dollars to raise them and I want to further assure you that it is OK to bring babies into this world even if you aren’t sitting on a huge nest egg. So…whether you are just getting started or already have several children, these ten money saving tips will help you keep a rationale perspective on how to afford your baby.
1. Have a budget.
You only have so much money, so a working budget is going to be your best friend. Because baby will require diapers, baby food, doctor’s visits and child care, you will need to cut back your current spending to keep your budget balanced. Whether it is eating out less, forgoing a car purchase or simplifying your vacation, you and your spouse need to be on the same page.
2. Don’t assume baby needs a bigger house.
The biggest single expenditure from these studies is normally housing. This includes all extra you might spend on housing, utilities, and home furnishings because of the baby. If you can afford it and would like a bigger house, go ahead and get one. But don’t think that Junior will grow up needing therapy if he has to sleep in tight quarters or share a room with a sibling. Janice and I had a big house before our children came along and we still live in the same house. Yes, some brothers shared a bedroom, but they never seriously damaged each other and are great friends today.
3. Try cloth diapers.
At around $15 each, cloth diapers sound pricey, but when compared to using 6-10 disposables every single day, you can recoup your cost in a couple of months. Cloth diapers with Velcro fasteners are much more user friendly than in the days when I used to fold and pin them around my babies. You can buy one size fits all and also be environmentally responsible. Try the calculator on Diaper Pin web site to learn your savings.
4. Feed table scraps.
Yes, I really said that. Janice and I didn’t like the thought of putting the prepared green paste called “peas” into our baby’s mouth, so we bought a baby food grinder (still available for around $10) and fed our baby (within reason) the same food we ate. The little grinder requires no batteries and will grind vegetables, fruit and meat to a healthy consistency. Once we purchased our grinder, we never bought another jar of baby food. According to Wholesome Baby Food, our “table scraps” cost about $.03 per ounce compared to $.23 per ounce for store bought, an 87% savings.
5. Clothing at yard sales.
Guess what? Babies and toddlers do not wear their clothing out – they outgrow them. You can therefore find baby clothes in pristine condition for nearly nothing at yard sales. While you are there, you can also find strollers, car seats and playpens…often in new condition.
6. Day Care.
Yes, childcare can take a big bite from your budget, but check to see if your employer offers Flexible Spending Account and figure your childcare tax credit . Other thoughts: weigh your (or hubby’s) net income after deducting child care, travel expense to work, lunches out because of job, and clothing required for job. One of you might be better off staying home with baby, especially if you could develop a home income stream.
7. If possible, breast feed.
A study on Kellymom indicates a savings of between $714 and $3,164 for one year of breastfeeding compared to formula.
8. Have proper life and disability insurance in place.
Ask yourself this question: “If something happens to my spouse or me, how will the remaining spouse be able to care for our child and continue to pay the bills?” You probably spend more eating out in a month than life insurance and disability insurance premiums would cost, so you absolutely can’t afford to not have them.
9. Don’t select schooling you can’t afford.
If you can’t afford (meaning cash flow) a private grade school or high school, use a public school. If you can’t afford that prestigious college, let your child attend a community college and state college. No degree is worth ten or twenty years of debt payments. Read my post 10 tips on how to graduate from college debt free for ideas and encouragement.
10. Make retirement investing a higher priority than college savings.
You may be tempted to start a college fund right away, but don’t sacrifice your retirement investments. Junior has lots of options to cover college expenses. What alternatives to retirement do you have?
11. Make a will.
I realize that I promised ten tips, so consider this one as a bonus…a very important bonus. If both of you die without a will, the courts will decide who cares for your child. Is this what you want? Make a will so you can name the guardian that you want. Do it today. (Oh, and did I mention you can do it for FREE at RocketLaywer?)
Concluding thoughts
Yes, your new addition will take a chunk out of your budget, but don’t get psyched out about these exorbitant claims of how much they cost. If you want to have children, I think you should have children. God is the giver of life and if he decides to give you a child, he will provide a way for you to care for the child.
One more thing: whatever they cost, they are worth it.
Do you think $250,000 is a reasonable figure for extra money required to raise a child? Why or why not? Which of these tips is your favorite? What additional tips can you share?
{ 13 comments… read them below or add one }
Joe, it’s easy to spend that much on a child – we’ve already spent in excess of 250k on diapers! Ok, just kidding..
I do agree that having children shouldn’t be one of those things that you necessarily wait on just because of money – although it certainly helps a lot of you’re financially prepared, have a budget and figure out other ways to save – as you have listed.
We are 5 months from the birth of my first child! The Wife and I have discussed the cloth diper thing and we aren’t convinced about the money saving aspect. Breast feeding – 100%…for health and money reasons.
The scrap thing is another 100% thing. All you need is a bad ass blender and some veggies/fruit!
@Money Smarts,
Haha. Yes, those disposables are pricey! But one hint is to consider the cloth.
@Evan,
Congratulations! Five months will be here soon…hopefully in time to claim on this year’s taxes.
Candidly, we tried the cloth diapers and eventually succumbed to the convenience of the disposable ones. Diaper pails are gross! But in case you are interested, the link in this post takes you to a Cash Money Life post where Ryan makes a comparison between cloth and disposable.
As mentioned, the table scrap diet worked great for all four of our kids. We even took our little grinder to restaurants with us…convenient and cheap.
Very interesting. It seems that your experience is somewhat at odds with some of the research, and I am not surprised. I really wonder why these studies may be overestimating?
Roshawn,
Like I said, I am not qualified to dispute their research, but something has to be wrong somewhere. I simply don’t believe that the average parent spends that much money. $250,000 for each child over a 20 year period is $12,500 a year per child. We had four, so, according to some of these studies, I would have been spending an extra $50,000 a year in today’s dollars to raise these kids. We were a single income family, so I can promise we didn’t spend anywhere near that much. It wasn’t there to spend!
I love the suggestions to breastfeed and use cloth diapers. Both have saved our family a ton of money. With our oldest we used disposable diapers for 4 years, then started using pull ups/good nights at night for 6 more years. During that time we threw away nearly $6,000! When our 21 month old was born we decided to go with cloth, I did the math and even if we only used the diapers for him we’d save a ton of money.
I’ve spent $300 total on diapers, reusable wipes and wet bags. Half of that was on buying 24 brand new all in ones that fit from 5 lbs to 35 lbs, with 48 inserts. The rest of the items were used, people tried cloth and it didn’t work for them so I bought up almost new products dirt cheap.We recovered our investment in the diapers about 16 months ago, after using for 6 months. We have #3 on the way and plan to use cloth for her as well.
Our oldest has decided recently that he wanted to get in on the cloth too and loves it. He loves that we can just throw it in with the rest of the things in the wet bag and no one will ever see me at the store getting the large good nights knowing that they’re for him.. He has medical issues that cause night time enuresis I’ve let him control the decision on what to use for the past 5 years.
As for breastfeeding, with our oldest formula cost me about $150 a month. So I was determined to breastfeed #2. It was difficult at first and I wanted to quit, but we had discovered he had a dairy allergy. When we looked into the cost of the prescription formula that he would have needed, that our insurance didn’t cover , we decided to just stick with breastfeeding and I’d make dietary changes. The formula would have cost us over $1,000 a month out of pocket! I’ve been unemployed for 2 years now so that really wasn’t an option for us.
Amy,
I hadn’t heard from many who went the cloth diaper route, so I appreciate your feedback and the fact that you actually did the math to validate your savings. Breaking even at the six month mark is awesome, as is buying used cloth diapers…a hint I never considered.
Sounds like breast feeding, especially with the unique dietary requirements, has been a financial life saver for you. Again, thanks for documenting your savings.
On another note: I love the name of your blog. I actually tried pickled pig’s feet one time on a dare. I haven’t tried them since.
Breast feeding and making homemade food was the one we went for in a big way. I could never understand why people would spend so much on buying ground up food from the shops when it cost about 5-10 as much just because it had been “fortified with vitamins and minerals and was organic”. Much easier and cheaper to boil veg and mash up chicken and fish at home and feed that to your baby whilst it was fresh.
Tanya,
Like you, we could never understand why people spend big money on prepared baby food when it is so easy, cheaper and healthier to prepare it yourself.
Thank you for this. My husband of almost 7 years and I have been on the Dave Ramsey plan for about 4 years now. We’ve eliminated an 11k car loan, a 3k cc debt, and we sold our 1890′s fixer-upper money pit of a house to move out west so I could pursue a graduate education. I had been working unpredictable hours in the tourism industry and decided to go back to school for a variety of reasons, but we did Dave Ramsey plan mainly to prepare for the adjustment of my income getting cut and to eliminate debt. I am on a graduate assistantship, which includes a full tuition scholarship and a small (as in $1000/month) stipend. I’ll defend my thesis next spring and then start coursework for my PhD.
The thing is I’m already 28 years old and my husband is 32. If I add on another 4 years of grad school, then job interviews, and starting a tenure track position, I’ll be pushing 40 by the time I have a steady income again and feel “financially ready” to have kids. We’ve decided we don’t want to wait that long and we’re thinking about how we could make it work while I’m in school. Right now, my schedule is flexible, I can work from home on occasion, and I feel like we have more control of our fiances – even though we’re living on less, we’ve killed virtually all of our debt, we have a little savings, and we’ve started saving for retirement. My main concern is childcare – it’s so prohibitively expensive, and we don’t have family close by to help us out. I realize that no matter what we decide to do, people will question it, and this is just something I will need to deal with.
I love your comment about not needing to be “sitting on a big nest egg” to start a family. I feel like this has really been holding me back – I felt like we needed to have a nice house, two cars, all of the right baby gear, extra money to save for the kid’s college.
Mama PhD,
Congratulations on getting rid of debt! I am honored that some things I said in this post are helping you with your decisions about having children. Yes, child care is expensive, but you do NOT have to be sitting on a nest egg. As focused as you two have proven yourselves to be, if you simply decide to start a family, you WILL figure out how to afford it.
For my two cents worth, if you decided to start your family now, you will not regret it. However, if you want a family and keep waiting until Venus aligns with Mars (everything is perfect in your lives), you may someday regret that you waited so long.
I wish you well. Come visit again and let me know what you decided and how it is going.
I agree with the author of this article. I think that Researches and economists way over-estimate the cost of havinf children. They make it seem like people have to somehow become millioners before ever trying for a kid. A co-worker told me somethin that I well took in consideration: ‘Once you have a baby everythings works out. People worry more than they should’. I personally think she is right. Another thing is, how do mormons can afford to have so many children with usually one income? I have a friend whose husband is a teacher and he only makes around $34k/year. She stays at home and they just had their 6TH CHILD! How do they do it? That completely goes against researches studies and estimates.
Although my partner and I are not the richest but not te poorest either so we are trying for a baby soon. We know they’re worth it.
Sereaida,
If your friend can figure out how to stay at home with 6 children, I believe you can afford one. I wish you the best, and you are right: they are worth it!
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