7 Eye-Popping Stats on the Costs of Raising a Baby
With all the media surrounding the arrival of celebrity wee ones this year, including the royal Prince George and North West, it’s almost too easy to get caught up in baby fever. Seeing Kate Middleton step gracefully out of St. Mary’s Hospital looking radiant in a cheery blue polka-dotted tunic, the woman almost made childbirth look too easy. But the real world has to remember that the whole process in fact isn’t easy, and neither is the child-rearing one that follows it. And luckily, we all have the the U.S. Department of Agriculture to contribute to that buzz kill, because it released its annual report on child rearing expenditures this summer, revealing some surprising yet valuable results for American consumers planning on raising a child in the next decade, and helping them deter their own from doing the same too early.
The report calculates annual child-rearing expenses, and provides estimates for major components of the budget by age of child, family income, and region of residence, presenting the 2012 estimates for husband-wife and single-parent families. Here are some eye-popping statistics that can help educate expecting families, and help convince children to hug a parent today:
1. Annual Expenses Based on Household Income
Unsurprisingly, the expenses that families paid in 2012 to raise their children varied widely based on the income level they stood at. In a husband-wife household with two children, each child’s annual expenses ranged from $8,990 to $10,230 on average for families with an income less than $60,640 before taxes. For those with a before-tax income between $60,640 and $105,000, expenses ranged from $12,600 to $14,700 and lastly, those households with an income of more than $105,000 before taxes saw expenditures from $20,930 to $25,180 yearly.
2. Roof Over Their Heads, Food in their Mouths
Of all that contributes to child-rearing expenses, the USDA’s report illuminates that housing accounted for the largest share of that cost in 2012, making up 30 to 33 percent of it. Next in line was childcare/education, which accounted for 18 percent of expenditures for those who required it, and food was the third largest, making up 16 percent of that cost.
3. And It Only Gets Worse
Those who think children cost the most at the beginning? Think again. In fact, the amount of money children cost annually only increases with age, evidenced by the report that for both single-parent and husband-wife families in 2012, their costs increased with every year their child aged, even without taking college expenses into account.
4. Tight on Cash? Head South
The USDA’s report also sheds light on just how much location affects child-rearing costs. Those husband-wife families in the urban Northeast spent the most amount of money on child-bearing expenditures, followed by families in the urban West and Midwest. Lastly, were those in the urban South and rural areas. They had the lowest child-rearing expenses, begging the question: what are they doing differently?
5. The Expense Wars: One Child Vs. Two
Interestingly enough, even though you can’t save more money the more children you produce, the report shows that in 2012, the more children families had, the less amount of money they were spending on each child on average.
Husband-wife households with one child spent on average 25 percent more on their one child than households with only two children. In addition, in this scenario, less is definitely not more, because households with three or more children ended up spending 22 percent less on each child.
6. Single-Parent Households vs. Husband-Wife Households
And when it comes to single parenting, reports show that they’re spending less. The USDA contends that single-parent households with an income of less than $60,640 before taxes in 2012 spent 7 percent less on child-rearing expenses than those husband-wife households with the same income. The report also pointed out that most single-parent households hover in this income bracket, while only one-third of husband-wife families do.
7. 17 Years From Now
The USDA sums up all their 2012 data in one statistic: middle-income husband-wife families with a baby born last year should prepare to spend about $241,080 in raising the little one over the next 17 years. That’s a 2.6 percent hike from 2011 and doesn’t even take into consideration payments for college, effectively putting yearly spending on each child for a two-parent middle-income family at $12,600 to $14,700 in 2012.
They’re lucky they’re worth it.