Young married couples are often looking for the ideal time to have children. They want to be responsible and so they ask the question, “Can we afford to have kids yet?” Essentially, they want to know if their income can cover the cost of raising children.
While the answer needs to be catered to your specific life situation, I thought I would share a little about my family expenses with the hope that it will help you to make a good decision.
“Can I Afford to Have Kids?”
- Conventional Wisdom claims, “It’s gonna cost you $10,000 per year per child”.
- My Bank Account responds, “Not as long as I’m around”.
- The Biological Clock interjects, “I’m not getting any younger”.
- Mentors advise, “Get your graduate work done first”.
- Contemporary Culture insists, “If you want to have a kid you better have the money to take care of that little baby”.
The end result is either there is never a good time, or now is as good a time as any.
Five years after my wife and I were married we started one of the most incredible and rewarding journeys of our lives – parenthood. After experiencing life as a dad I think the better question might be, “Can you afford not to have kids?”
How much extra does my family spend on kids?
I decided to sit down and calculate how much my kids cost annually. Remember, these numbers will vary greatly from person to person. My home is full of young little humans. My three children range from 4 years to 3 months. Currently we have two kids in diapers (but are hoping our son will get the potty thing soon). In our particular situation we have no kids in school so that significantly minimizes our costs. Finally, we have a reputation for being frugal folks!
What is the annual cost of raising children?
The following is an estimation (based on our budget) on what we spend annually for all three of our children:
- Diapers = $350 * we use cloth diapers during the day and disposables at night and during trips away from home. If you use disposables, you would probably want to budget around $650 per year.
- Food = $1,200 * four year old, two year old, and nursing baby
- Clothing = $100 * we only buy used clothing and reuse clothes on younger siblings
- College Saving = $1,800
- Travel = $1,000
- Medical = $750
- Misc = $1,200
I estimate that for our three kids we spend an additional $6,300 per year. For our family, that averages about $2,100 per child per year, or $175 per child per month.
Ten ideas to help minimize the cost of raising children:
- If you plan to have one of the parents stay home, adjust to one income now. This will allow you to practice living on one income. It will also give you ample time to pay off your debts or save for an emergency fund.
- If you need to borrow money (i.e. for a home) then ask the bank to make the calculations on only one income. This way you will be prepared to make the necessary adjustments when junior comes along.
- The financial costs of children increase over time, but presumably so will your salary. The cost of raising children who stay in the home is obviously significantly less then a teenager who is involved in lots of extra curricular events. Babies who nurse consume less than growing teenagers.
- If you are frugal and financially conscientious then you will find a way to make it work just like everything else. Reasonable financial concerns should not stop you from having children if you think the time is right. However, if you are really struggling to make it financially without children, I highly recommend you meeting a financial mentor who can help address some of the financial issues before adding children to the situation.
- Make the intangibles of life your focus and the tangibles of life will fall into place. What you have to offer your kids should be a lot more than money. Time and love are currencies that will mean more to your kids than anything else.
- Don’t kiss your brain goodbye. Those cuddly little babies do amazing things to the spending habits of otherwise rational adults. Don’t equate your level of love with the amount you are willing to pay to buy things for your children. Loving them and spending money on them is completely different.
- Remember that others love babies too. Churches, friends, and workmates love having baby showers. Depending on your ‘friendship base’ you might just be surprised the number of things you are given. As a general rule, do not buy any baby items until after the shower.
- Before the baby is born do some reading about college savings, because any little contributions you make today will have a huge impact tomorrow.
- When you have children if you have not already purchased life insurance, this is a great time to consider the benefits for your family.
- Prepare for a change in spending habits. In order to make ends meet, you may need to cut some of your spending. While young married couples might have extravagant spending habits, young parents are typically required to be quite frugal.
- BONUS #11 — Pray you don’t have triplets!
Photo by ^riza^.
How much does it cost you to support your kids? What ideas do you have for raising kids on a smaller income?