Kids: Now More Expensive Than Ever

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Earlier this week, we learned that median family wealth has fallen dramatically over the past several years, taking us back to levels not seen since the early 1990s. Now the Department of Agriculture (which for some reason studies these things) reports that the cost of raising kids from birth to the age of 17 has increased by some $8,000, to a whopping $235,000 for middle-income Americans. Great.

I’m not entirely sure why it’s the USDA that’s looking into the cost of raising kids. Kids aren’t veal, and as far as I know most parents aren’t planning to eat their children once they hit the age of 18. But the USDA has been issuing these reports since 1960, and they are used to develop guidelines for child support and foster care payments.

In calculating the cost of raising kids, the USDA considers expenses for everything from housing and food (the two biggest expenses) to education, health care, clothing, transportation, and so on. The estimates for this year are 3.5% higher than those from last year, mainly due to increases in the costs of gas, food, education and child care.

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The cost of raising kids can vary tremendously. Class – at least as measured by family income – makes a giant difference. As the USDA notes:

A family earning less than $59,410 per year can expect to spend a total of $169,080 (in 2011 dollars) on a child from birth through high school. Similarly, middle-income parents with an income between $59,410 and $102,870 can expect to spend $234,900; and a family earning more than $102,870 can expect to spend $389,670.

Geography makes a big difference as well. Families in rural areas, and in the urban South, pay less to raise their kids than those in the urban Northeast. And there is a bit of a cheaper-by-the-dozen effect: Families with more children pay less per child than those with fewer. (If you have enough children, you will be given your own reality show, which will help a great deal with the expenses.)

You can figure out what raising a child is likely to cost you by using the USDA’s Cost of Raising a Child Calculator.

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Because the USDA focuses only on the expenses up to age 17, their estimates leave out one gigantic contributor to the cost of raising kids: college education. As every parent knows, these are considerable; the USDA report notes that the average annual tuition at a private school today is $28,500 with another $10,000 in expenses; tuition for in-state residents at state schools is about a third of that, and expenses a little less.

And that’s just what it costs now. By the time the 2011 model babies turn 18, it’s a whole other ballgame. If current trends continue, experts say, a single year of college 18 years from now will cost roughly ten bazillion jillion dollars. I exaggerate only slightly: The site 529s.com estimates that the total cost of attending a private university will be $420,000 18 years from now, with the cost of a state school running to $195,000 for state residents.

Children are the gift that keeps on taking – at least financially. They are said to have many other redeeming features.

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