Cost of raising children still going up

Kids

The cost of raising kids has gone up, according to the Department of Agriculture. Photo Credit: USDA/Wikimedia Commons/CC-BY

A veritable cornucopia of maudlin platitudes exist about how wonderful children are and perhaps they are right, but the darn things are expensive. The cost of children, according to US Department of Agriculture estimates, continues to rise.

Ferrari in the driveway or a teenager that hates your guts

Picture something for a moment.  Imagine walking to your driveway, where there sits a Ferrari. Your Ferrari. You open the door, slide into the exquisite leather seats and listen to the throaty tone of more than 500 horsepower coming to life as the engine, hand-built by craftsmen in Maranello, turns over. Highway speeds are reached in less than 4 seconds and corners that the guy down the road is terrified of in his pickup are taken with ease.

One of the reasons typical working-class people can’t buy Ferraris is they instead spend money on something which makes a less pleasant noise, breaks down more often and is far more expensive to maintain, namely children. The cost of raising a child from birth to 17 years of age, according to the Washington Post, is $235,000; broadly the same as a new Ferrari.

Housing and child care the largest cost

The Department of Agriculture releases an annual estimate of the cost of raising a child born the previous year to 17 years of age. This year’s release is an estimate for raising a child born in 2011 to 17; it marked an increase over the previous year’s estimate of 3.5 percent. The estimate of $235,000 is for a two-child, two-parent household in the middle range of income, according to the Wall Street Journal, with an annual cost ranging from $12,290 to $14,320. Small wonder so many people need installment loans to get by.

The largest expense was housing at 30 percent of the total expense or $70,500, according to the Washington Post, which has been constant as the largest expense since the USDA began compiling its estimates for the cost of rearing a child in 1960. However, according to the Wall Street Journal, the second largest cost is for child care, which combined with education makes up 18 percent of the cost of raising a child.

Child care is the most-expanded, as it was 2 percent of the cost in 1960, when day care was virtually non-existent.

Growing above inflation

Since 1960, the cost gas gone from slightly more than $25,000 in nominal terms, but $191,270 in 2011 dollars after adjusting for inflation. Housing was 31 percent of the cost in 1960, broadly the same, according to the San Francisco Chronicle. Food costs have gone down considerably since then, having dropped from 24 percent in 1960 to 16 percent in 2011, according to the Wall Street Journal. Transportation costs declined slightly from 16 percent of costs in 1960 to 14 percent in 2011.

Health care costs doubled from 4 percent in 1960 to 8 percent in 2011.

However, this is presuming a child’s parents do not pay for their college, which has an estimated annual cost for an in-state university of $28,500 for tuition and fees and $10,089 for room and board.

Sources

Washington Post

Wall Street Journal

San Francisco Chronicle

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