How to Avoid Spending $300,000 (or More) to Raise Your Child

Single mother with babyHaving children can be an expensive proposition. But despite the scary figures in a recent government report on the subject, you shouldn't panic, because there are things you can do to cut the price tag down significantly.

The Department of Agriculture just released its annual survey of how much families spend on their children. For many, the figures will be shocking:
  • The report divided households into three income groups. The lowest group can expect to pay about $212,000 to raise a child, the middle group will pay roughly $295,000, and the highest group can expect to shell out a whopping $490,000.
  • The biggest component of costs was housing, which ranged from about $3,000 to more than $7,000 per year based on income level. Child-care and educational costs came in second for the middle- and upper-income groups, while food came in at No. 2 for the low-income group.
  • Overall, annual costs ranged from $12,290 to $14,320 for middle-income families.
How much we spend on our children

But before you panic, consider a few things. First, the methodology behind the study assigns costs to a new child in ways that may not reflect your true cost. For instance, as far as housing, if your home already had an extra bedroom, then your actual housing costs may not change at all, even though the estimates include an amount that reflects how much others would pay to get a home with an additional bedroom. Similarly, assigning costs like transportation on a per-capita basis can be misleading if your usage patterns don't actually reflect equal use among all family members.

Age and cost of children

More important, there are plenty of steps you can take to cut those costs. Hand-me-down clothes from family or friends can slash the $11,130 to $19,080 clothing figure in the report, and smarter food shopping and eating out less can give you back some of the estimated $31,050 to $47,640 per child in food costs.

In addition, smart moves in one area can cut costs in others. For instance, choosing a home based on the quality of public schools may lead you to pay more for housing, but if it saves you on education costs down the road, it's well worth it.

As much as you might want to spend as much on your child as you can, coming up with $300,000 over 17 years is a stretch for most families. With some effort, you don't have to spend that much to raise your child successfully.

For more on smart family money moves: Fool contributor Dan Caplinger spends enough on his daughter, although she might not always agree. You can follow him on Twitter here.

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what the article fails to mention is that only white people do this, minorities dont spend any where near that

July 07 2012 at 2:49 PM Report abuse +3 rate up rate down Reply
1 reply to docmetcalf1955's comment

Minorities get it all for free baby!

July 09 2012 at 2:54 PM Report abuse +1 rate up rate down Reply

uuuuuuuuuuuuuuuh how the hell is it THIRTY PERCENT to "house" a kid ? we all live together and no one I EVER KNEW had a "suite" or private room either ! Looking back maNY OF US OUT HERE don't know how everyone fit inside 2 bedroom apts decently and the 2 bedrroms were considered a luxury as some had upwards of 7 people in one room studio type set us as well-- so HOW WOULD ONE KID's ""housing"" run 30% ????

July 07 2012 at 12:10 PM Report abuse +1 rate up rate down Reply

yeah and the morons in a federal court DECIDED FOR WE,THE PEOPLE,that WE ARE responsible via welfare WIC medicaid and foodstamps etc FOR THE ANCHORS DROPPED BY THE ILLEGALS. how many BILLIONS ANNUALLY WASTED and are you aware that THEY ARE CAPABLE to send out BILLIONS EVERY MONTH TO messico ???????? all due to FRAUD ? and WE ARE PAYIN FOR THIS ????

July 07 2012 at 11:54 AM Report abuse +4 rate up rate down Reply

Here's how not to spend a dime raising a child. Go down to the local welfare office and claim disability, you know something really drastic like how your “feets be hurting all the time and you can'ts be working and you ain't gots no money to feed you chaps". Then you won’t have to worry about housing because they’ll set you up with one for free. They’ll even pay all your utilities and give you free cable TV. Don’t worry about paying for Healthcare, you’ll get that free too, it’s called Medicaid. And Food, don’t worry about that neither, you’ll get a little card called EBT and you won’t shell out a dime for food. You’ll get everything for free. Have a couple more kids too if you want. That way you’ll get even more! And when the kids go to school they’ll get free breakfast and free lunch year round. The taxpayers pay for it all and you don't shell out a dime or break a sweat having to work some silly job.

July 05 2012 at 11:24 AM Report abuse +6 rate up rate down Reply
1 reply to ilm9p's comment

And do not forget to teach all those kids how it is done, so the talent is passed on for future generations.

July 05 2012 at 10:51 PM Report abuse +4 rate up rate down Reply