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  • Costs of raising kids

    intersting stat in the WSJ this morning. 2013 cost of raising a child to 18 broken down by income.  Low income $176k.  Middle $245k.  High $407k.  I had seen the 245k figure before but not the 407k.  Frightening really.

  • #2
    You are reading my mind.  

    I was engaged in an offline conversation with another member of this forum, a younger member than me, about the costs of raising children. As I look back, I think that without my children, currently ages 14 and 17, my net worth would easily be 50% greater. They cost considerable time and money, and I do not regret a single moment or dollar.

    The warning is to those who are fresh out of training and think that they can work for ten or so years and retire by age 40 (or whatever) while starting and raising a family. In my opinion, these plans are extremely unrealistic as everyone I know underestimates the costs of having and raising children. These MMM fantasies of having your child home schooled and play stick ball with friends in playgrounds after school and on weekends is just not how it plays out today, especially for physicians and their families.

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    • #3
      I always find these numbers interesting but I'm sure there's a wide variation even within the same socioeconomic classes. E.g. choosing between private vs public schools and colleges alone could potentially make a difference of $100k easily.

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      • #4




        I always find these numbers interesting but I’m sure there’s a wide variation even within the same socioeconomic classes. E.g. choosing between private vs public schools and colleges alone could potentially make a difference of $100k easily.
        Click to expand...


        $100,000? LOL! This is what I mean by people underestimating the cost of raising children.

        My son had some learning issues, and we thought he would be a better fit for a private school. We were right.

        Total cost (tuition only) K-12: $200,000 give or take a few bucks, which does not include capital campaigns, annual giving, books, sports, etc. We live in the Midwest; the cost is much higher in New York, Boston, SF, etc.

        College not included in that number. The difference between Your State U. and Fancy Private College can approach $200,000, too.

        $100,000?  

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        • #5




          I always find these numbers interesting but I’m sure there’s a wide variation even within the same socioeconomic classes. E.g. choosing between private vs public schools and colleges alone could potentially make a difference of $100k easily.
          Click to expand...


          I agree with you. Many of the variables in the cost of raising kids are choices. Vagabond MD made the right choice, and fortunately he (she?) could afford to do so, but his situation is not the norm. I also wonder how these projected costs are calculated, i.e. if you would have bought the same size home whether you have 2 or 3 kids, is it reasonable to allocate a % of the home to the cost of raising the child? Do your children have to have the latest and greatest or do you buy clothing on your neighborhood Facebook swap-sites? Do you expect your teenager to work and buy her own car or do they get a new Benz for graduation? How about if they work and buy their own clothes? (Or was I the only mean mom who expected that of her children?) And if you have family coverage health insurance, does it really cost extra for the 2nd child?
          Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6




            I always find these numbers interesting but I’m sure there’s a wide variation even within the same socioeconomic classes. E.g. choosing between private vs public schools and colleges alone could potentially make a difference of $100k easily.
            Click to expand...


            I agree with you. Many of the variables in the cost of raising kids are choices. Vagabond MD made the right choice, and fortunately he (she?) could afford to do so, but his situation is not the norm. I also wonder how these projected costs are calculated, i.e. if you would have bought the same size home whether you have 2 or 3 kids, is it reasonable to allocate a % of the home to the cost of raising the child? Do your children have to have the latest and greatest or do you buy clothing on your neighborhood Facebook swap-sites? Do you expect your teenager to work and buy her own car or do they get a new Benz for graduation? How about if they work and buy their own clothes? (Or was I the only mean mom who expected that of her children?) And if you have family coverage health insurance, does it really cost extra for the 2nd child?
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7
              Being an Ob in my former life I found it interesting that some patients told me they were only having one child so they could do everything for it.  Other people just seemed to be oblivious to the costs.  Many people like babies and just keep having them

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              • #8
                Costs are high. Currently spending $3k/mo on childcare (both of us are physicians). Then add diapers, food, clothing, some fun camps/sports and it all adds up quick.

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                • #9




                  Costs are high. Currently spending $3k/mo on childcare (both of us are physicians). Then add diapers, food, clothing, some fun camps/sports and it all adds up quick.
                  Click to expand...


                  There was a time when the children were younger (like your children) that I thought to myself, "Wow, this is really expensive, but the cost of kids should start to decline soon."

                  It never did. It only became more expensive! You dump one expense (like diapers) and add other expenses to take the place.

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                  • #10
                    To me the # is acadamic. Kids are what it's all about. Trumps any race to retirement, FIRE or otherwise in my book.

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                    • #11
                      For high income families, the basic costs, outside of school and childcare, are not very significant.  Buying all the stuff for kids: Crib, dresser, changing table, clothing, toys, etc came to a few thousand dollars at most, and most of that stuff can be re-used for subsequent children.  A lot of that equipment can be passed back and forth among friends.   So far, with 2 kids age 10 and 6, I have spent a total of $42,000, not counting childcare, and not counting most of the extra food expense.(per Quicken)

                      The biggest expense is childcare and private schools.  The best childcare option we found was a daycare/pre-school that cost $2000 a month.   Because of the socialization and enrichment benefits, I found this to be a better option that having them at home with a parent or grandparent.

                      We also send them to private schools.   This costs us about $15,000 a year per child, but some schools around here charge over 25k for kindergarten, and it goes up each year, with high school 47k and up for the most expensive schools, and those rates go up each year due to inflation. ( Note: I'm in one of the most expensive areas )

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                      • #12
                        No doubt raising children is expensive. But I'd wager that everyone with children is pleased with their return on investment. To The Gipper's point, the # is academic. That number is useful for financial planning and being aware of what you signed up for (when you have children). But how do you quantify the happiness and satisfaction they provide? Factoring in the grandchildren, the care provided to you when you are old and frail, etc... it might just be the best investment you can make!

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                        • #13




                          No doubt raising children is expensive. But I’d wager that everyone with children is pleased with their return on investment. To The Gipper’s point, the # is academic. That number is useful for financial planning and being aware of what you signed up for (when you have children). But how do you quantify the happiness and satisfaction they provide? Factoring in the grandchildren, the care provided to you when you are old and frail, etc… it might just be the best investment you can make!
                          Click to expand...


                          Raising children is rewarding in many ways, and arguably an essential, innate component of the human experience, to propagate the population, etc. I would never call raising children an investment, though for some it may work out that way. Ask Serena and Venus Williams' father about that.

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                          • #14
                            Expecting our first child soon. Not super-thrilled by this conversation  :?

                            With a high income things like expensive baby/child paraphernalia hasn't really had much of an impact on finances so far. But I've surprised myself by already developing a nagging education anxiety that tells me I have to start squirrelling away $ for expensive private schools and colleges.  How necessary is that? How bad are the public schools in the middle-class suburb in which I live?  The public high school is behind my neighborhood!  I used to privately mock people with the exact anxieties to which I am now confessing!  What's happening?!

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                            • #15
                              A lot of that stuff is a choice. You can spend a million bucks just educating each child if you want. Some of it is more hidden, like the extra costs of living in a larger house or having to have a house in a nice school district.

                              Obviously it can't cost $400K to raise every child. Take a middle class income household with 4 kids. $50K a year x 20 years = $1M in income. Yet they spent $1.6M on the kids? I don't think so.
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