I recently saw on from CNBC article on Yahoo that was interesting for a variety of reasons. The article was written because the Department of Agriculture recently revealed that a middle-income family raising a child born in 2010 can expect to spend approximately $227k (in today’s dollars) for food, housing, and other living expenses. And this number doesn’t even factor in college or pregnancies.

The whole idea isn’t to scare you into not having children. Although, which such a high price tag, that may be some people’s first reaction. However, the high cost of raising children is absolutely something that should be understood. I don’t think that you should make decisions about children based on money, but I strongly believe that you should have a plan for a first couple of years of parenthood if you plan on having children. An emergency fund should be built for any complications, space requirements in the house and cars should be assessed, and determinations about careers and employment will need to be made.

Costs of Raising a ChildAlso staggering were the differences in lifestyle inflation based on incomes of the parents. It may sound obvious, but upper-middle-class families spent significantly more raising their children than less-well-off families. The USA report reveals that a family earning less than $57,600 would expect to spend $163k on a child; while parents earning more than $99,730 should expect to spend about $377k raising a child. Parents with incomes between those two levels spent $226k per child. I think we can assume that $163k covers the essentials, so parents earning more than $99,600 per year are spending $200k on non-essentials (trips to the movies, eating out, etc.).

However, what I found most interesting about this article, was that the author didn’t take the slant of “the costs of raising a child are very high”, but that “the costs of raising a child are soaring!” The article is titled The Inflation of Life – Cost of Raising a Child Has Soared, which one would usually take to indicate that the costs have increased at a pace greater than what was expected. The author states that “the cost of raising a child from birth to age 17 has surged 25 percent over the last 10 years.” I think that a 25% increase over 10 years is hardly a surge. That’s a compounded rate of approximately 2.3% per year, which is abut what someone should expect due to inflationary increases in food, medical, and other needs. It’s actually probably lower than I would have expected overall due to surging costs in healthcare, which I would imagine a child needs a decent amount of.

Whether you’re planning for children or simply interested in how the media sometimes sounds the alarm inappropriately, I think the article is interesting so I wanted to post it. If you’ve been thinking of having a child, does the high price tag give you pause?

(Photo courtesy of Flickr)