Study: A newborn baby is going to cost you about a quarter million dollars
Reported by Liku Zelleke
The US Department of Agriculture has released a report that will make most parents bite their nails. It is a well known fact that family expenses have been growing constantly for years now. The cost of bringing up a child has also been rising – at a rate that many families can’t even keep up with.
Taking all expenses and forecasting their rate of rise in cost, the report has estimated that it would take about $241,080 for a middle-income couple to raise a child (an increase by almost 3% since 2011), if the child was born in 2012, until he or she reaches 18 years of age. What’s even more shocking is that this doesn’t even include the cost of sending them to college.
The USDA’s estimate includes expenses that will be incurred for housing, food, transportation, clothing, health care, education and child care. Factored in are also miscellaneous expenses like toys and computers.
Meanwhile, wages haven’t been keeping up. The median annual household income has fallen by as much as $4,000 since 2000, after adjusting for inflation. Many of the jobs that were lost due to the last recession have now been replaced by lower-wage positions.
While all expenses have been on the rise, the ones that have been the highest are spending on health care, education and childcare. Health care made up about 8% ($20,000) of the total child-rearing expenses while child care and education make about 18% of the total.
“Many families are priced out of licensed child care services. If they are priced out, then the health and safety of those children are at risk,” said Lynette Fraga, executive director of Child Care Aware of America.
Other major expenses that bite a huge chunk out of families’ earnings are transportation and food costs. Gas prices, for example, have almost doubled between 2000 and 2012.
“As prices are going up and our kids are reaching teenage years, it’s compounded quite quickly,” says Jason Hicks a father of two 10- and 13-year-old sons, who has seen his family’s monthly grocery bill grow from $500 to $800 in the past few years.