Whether you are a parent or not, you probably know that raising a child costs a fortune. And by fortune I don’t mean the amount of money it would take to book a private jet and tour the world on a luxurious holiday. I’m talking about the amount of cash that would allow you to purchase a very nice house in a very nice neighborhood and still allow you to drive an extremely nice car… or two.
A new report out claims the cost of raising a child from birth until he graduates from college is between $397,670 and $1,239,649.22, before taxes, depending on the college he attends.
Frankly, I’m surprised the number is that low considering that a mother starts spending money on her child well before giving birth. Heck, I dropped nearly $20 on the home pregnancy test I took shortly after conceiving my daughter. My prenatal vitamins weren’t cheap either nor were my maternity clothes or the medical bills that covered the care I received to insure my child would be born as healthy as possible.
According to the report, once your child is born your bank account is depleted trying to keep Junior fed, groomed, clothed, educated and entertained to the tune of nearly half million dollars, provided you aren’t paying for him to attend an Ivy League college. If that happens then you’ll likely be out more than a million dollars before your kid celebrates his 22nd birthday.
The numbers are slightly lower if you don’t factor in college. According to the U.S. Department of Agriculture, the cost of raising a child from birth to age 17 is roughly $300,000, though the number varies according to a family’s income. For example, in two-parent households with a before-tax income of less than $45,800, parents spent an average of $148,300 on their children from birth to age 17. Parents with income between $45,800 and $77,100 averaged a total of $204,060 on their offspring, and those earning more than $77,100 spent about $298,680 per child.
Two hundred thousand plus dollars may not seem like a huge price to pay considering how much joy a child brings to a family. However, if that same amount of money were invested in a traditional IRA at a rate of 7 percent, deposited in equal increments over 22 years-—the same amount of time it takes Junior to reach his college graduation—-you would end up with $964,236.93, before taxes.
Was money a factor in deciding how many kids you would have?
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