The real cost of a child

The real cost of having a child
How much money does the first year of a child’s life really cost you?

Every thought about the real cost associated with having a child? It’s not something most of us worry about because we know we want children and if we thought too much about it then we might have second thoughts, but I thought it would be fun to do the math. Many other professionals have thrown numbers around saying it costs close to $200,000 per child to raise them until the age of 18. This includes a college education. Having a three year old and another one on the way I thought it would be fun to calculate the real cost of the first year of a child’s life.

There are obviously many factors involved when discussing the financial obligations of children so I’m just going to use my personal experience as an example. Some people will spend much more and much less in different categories so this article is just for fun, but will give you a good idea of how to calculate your own costs.

Here are some one time costs that will occur in the first year of a child’s life.

Hospital Bills from delivery: $1,500
Baby Gear (Car seats, strollers, diaper bag, etc.): $300
Activity Equipment (Bouncy seat, mats, play center, etc.): $200
Nursery (Crib, sheets, furniture, monitor, lamps, paint, etc.): $450 (can be much more)
Feeding (Bottles, nipples, bibs, sippers, highchair, etc.): $200
Other: $100

Our total one time costs for the first year are estimated at about $2,750

Next, let’s discuss ongoing costs associated with the first year.

Childcare: $500 per month with and occasional babysitter for a night out so another $25 per month
Diapers and wipes: $100 per month
Feeding: $100 per month for 6 months for formula and then $50 per month for formula and another $5o per month for baby food.
Clothing: $60 per month
Medicine and Doctor Co-pays: $30 per month
Toys and books, etc.: $20 per month
College Savings: $100 per month

Brings our total ongoing costs for the first year to about $11,220 and a grand total for the first year to $13,970 so we will round to $14,000. Doesn’t sound like a lot of money does it? One thing most people don’t take into account is the cost of not investing this money. Most expert financial advisers will agree that it’s easy to get an average of 8-10% return on your investment over an extended period of time. I had my first child at age 26 so I will be able to retire in about 33 years from her birth. So take the one time investment of $14,000 and put it in a IRA or mutual fund and my $14,000 would have been worth over $370,000 in 33 years. WOW! Having a child cost me that much in just one year now think about eighteen years of expenses, I’m sure we are well over the $1,000,000 mark! Is it worth it? Every penny!