How to Save Up to $250,000 on Raising Children
Does It Really Cost a Quarter Million Dollars Per Child?
People say raising a child costs $200,000 to $300,000. (Perhaps both to average out that figure and make it more scary to people who don’t do math well, sometimes you hear “a quarter of a million dollars”).
Actually, I think this is true, and also buying a car costs a quarter million dollars. You certainly can spend that much on either one, depending on how much you have and whom you are trying to impress.
However, so far (when you calculate all the tax cuts and gift cards and assets of many sacks of clothes and toys we’ve been given) I think we may have made money by having three children, and that’s not because we’ve sold them into slavery! (They’re a bit young for that.) Not everyone has the same sources of help we have, but we’re probably not too far off normal, considering how many people who certainly don’t have a million dollars of disposable income manage to raise at least four children anyway.
I have not specifically calculated the figures (what’s the value of jeans with holes in the knees that are good play clothes for us but which nobody else will want?), but since I usually do our taxes, I have a good idea where our money goes. So, especially for those who haven’t had children yet, let me explain the economics of all the things you DON’T need to buy.
Not Exactly Ill-Clothed
Costs of Conceiving a Child
We are older parents. Younger parents can save costs compared to us by not having to buy books on fertility and thermometers and vitamins and pregnancy tests and stuff like that. The main cost-saving strategy here is to protect your fertility. Don’t wait till you’re 30 or over to start having children, don’t do things that would lead to STDs (as in, don’t have sex outside marriage – and don’t laugh either, abstinence is both possible and also nicer than being naked in front of someone who doesn't like you enough to stay with you), don’t mess up your hormones with contraceptives or get scar tissue (physically or mentally) from an abortion.
Pre-Natal and Birth Costs
At the time I got married, I called a hospital to find out what the cost of an uncomplicated vaginal birth is, without insurance. It was then about $2000 (not counting the cost of the doctor, which about doubled the figure). Three years ago when I actually had a (very slightly complicated) hospital birth, it was about $3000. It’s not a fun check to write, but less than many plumbing emergencies, and you get ¾ of a year to save up for it. YOU CAN HANDLE THIS. Even without insurance.
But, twice we had a home birth, and for that we got the cost of the actual birth PLUS the cost of prenatal care (from the SAME person or team every week, who ACTUALLY GOT TO KNOW ME, and LISTENED to how I was feeling) for about the same as the cost of just the birth at the hospital. (Can you tell I think home births are great?) I can say from personal experience, though, it is a good idea to have the additional money available for a hospital birth just in case. (If you don’t end up using it, you can put it aside for a college fund, because you may not need it during the next 18 years – keep reading!)
Not Exactly Ill-Shod
Paying for Babyhood
Disposable diapers add up over time. (We did mostly disposable diapers with one child because of diaper rashes.) Cloth diapers sound like they cost a lot, but it’s only once (and with some cloth diapers one purchase will last for multiple children.) Cloth diapers do leak more than disposable diapers, if you don’t change them often enough. Consider it your reminder to keep the baby from having to sit in disgusting stuff!
We found you don’t have to wash all cloth diapers as many times as some guides say, to get them hygienic again. We have an outdoor clothesline, and sunlight is a good disinfectant. (Remember, you have a lot of ancestors who survived before clothes washers with disinfecting cycles!)
I mention diapers in such detail only because I can’t think of any other expenses we had during babyhood. We are older parents, so we have a lot of friends whose children are a few years on from ours, who handed down a whole lot of clothes. Also, on both sides of the family, for a lot of years there was doubt whether there would be any descendants at all, so we have grandparents, aunts, uncles, great-aunts, great-uncles, and some single or childless friends who were all waiting for babies to give gifts to. So we were given more clothes, toys, baby furniture, baby carriers, strollers, breast pumps, etc., than we could store in our house, much less use. Sure, not all of it was in perfect condition, but most of it you couldn’t tell from new, and considering that babies cause lots of stains, it’s not like it was going to look new after first use anyway.
Food – well, breastfeeding is really convenient and really cheap. Probably there was a little more cost for my own food while I was breastfeeding, but I didn’t notice it, and I did notice the pregnancy fat disappearing quicker that way.
Can You Have Too Many Stuffed Animals?
Will You Need a New Car?
Unless you both have motorcycles, the only additional cost for a first child will be a car seat. (Unless you have one of those two-seater sports cars, in which case you probably aren't all that strapped for money.) For a first child, someone will likely give you a car seat, or a gift card that will cover it. Most likely, your first child will be out of that car seat by the time your second is born, so you might have to keep buying new booster seats for a while (if you believe the manufacturers that you should never use anyone's hand-me-down because it might have been in a crash and they didn't tell you).
The annoying thing is, the average car that can hold 5 (somewhat squashed) adults will probably not hold 2 adults and 3 children who are in child seats. I am waiting for someone to invent interlocking baby and booster seats for really small cars, but meanwhile, we did figure out, weeks before #3 was born, that there is a really small baby seat (by Cocorro) that fit with booster seats well enough to keep us from having to buy a new car.
After some number of children, child seat laws will pretty much force you to buy another car. But it doesn't necessarily have to be a new car, and you don't necessarily all have to travel in the same car when you go. There are ways to work it out, and in my experience, the people who worry most about whether they can afford a baby have no problem affording a new car.
Paying for Childhood
I read something urging parents to be financially prepared for parenthood that said, “I am sure you would not want to see your child be the only one with beat up shoes or hand me down clothes on the first day of school.” Huh. I would be highly surprised if my first-grader knew hand-me-down clothes from new clothes. (In fact, I’m not sure adults know the difference. I get more compliments on my thrift store clothes than any others.) I would also be highly surprised if new shoes survived the walk to school before looking “beat up”. Really, all I can say is, if my children’s self-worth is seriously dependent on their first-day-of-school clothes, then I have failed as a parent.
Due to the same factors as in babyhood, about the only clothes we have bought for our children so far (oldest is 7) is underwear, and a few socks (though we’ve actually gotten hand-me-down socks!) Oh, and 5 pairs of jeans we bought because there were holes in the boy’s other pants, but since there were holes in those jeans too after a couple weeks, we decided there was no point in buying more pants. (I am fine with shorts during the winter – not very different from pants with holes! Besides, if knees directly meet concrete enough times, the problem will tend to correct itself.)
We do pay more for food – but the changes are so incremental I don’t notice them except by comparing this year to five years ago, and inflation has had much more effect than children. I don’t think the food costs have outweighed the tax benefits under the Bush tax cuts (though probably that will change in 2013) Update: So far we're still seeing tax benefits in 2016.
We have a small house, and we had no room to put a baby in it until we had a baby. Then we discovered room. The next child, we also had no room for until the event actually happened. Same with the third. I assume at some point, there is a limit to what you can squeeze in, but also, if you have enough children, some are going to start moving out before the last ones arrive. I personally had quite a bit of space growing up, but a family next door had twice our size of family in about the same house size we have now. It appeared to me to work fine.
Costs of Teenagers
Well, we’re not there yet, so feel free to discount my thoughts here the way I discount single people’s opinions about children. I hear boys especially eat a lot. But then, about the same age they eat the most, they get old enough to have a job. Most parents I know seem to want to keep supporting their children until they are legally adults. Seems to me like a good thing to do overall, if you have the money, but you have to admit it is not a reasonable picture of the real world, and at some point before they enter it, children should learn how the real world works. Learning to support yourself is less terrifying when you know your parents are actually still there to fall back on if you fail in a job. Oh, and teenagers DO NOT NEED cars, computers, cell phones, etc., and if they think they do, there is no time like the present to define the difference between “need” and “want”.
One of Our Children's Bookshelves
Costs of College
Unless it is your clearly-understood family tradition, written or unwritten, you do not owe your children a college education. It is a nice start in a career, but since children don’t tend to realize how nice a start it is, it is easy for them to waste the gift out of ignorance.
If we support our children’s college education, it’s only going to be if they see the use of the gift, and have the understanding of how to make the best use of it. Actually, we’re not likely to have the money to do so anyway, which does not worry us because (despite having some pretty good college education between us) we’re not convinced colleges today are worth the price. Online education, work experience, and the library seem like something an enterprising young person could do a lot with for very little money. As for the “social experience” of college – uh – you mean the things that happen Friday nights? Anyone who is concerned about their kid missing out on that experience should certainly send their kids to college; nothing in the real world can match the irresponsibility of that experience.
Costs of Raising a Parent
I found an article that explains the eventual economic value of children to society is somewhere around the quarter-million dollars they--supposedly--cost. Whether any of these calculations are to be believed is up to you, but it's something to make sure you include in your own calculations.
This article is about economics, so I am not discussing whether children are fun (though we think so.) But for those seriously concerned about the cost of parenthood, let me add one more thing to the equation. If you have a child, in a few decades, that child will probably be the one calculating costs – about your nursing home. That should be a sobering thought, possibly one which would tend to raise the amount which you would be willing to spend on a child.
Perhaps an even more sobering thought is, if you don’t have a child, whose child will someday calculate the costs of supporting you?