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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75826  
Subject: How much do children cost? Date: 10/25/2004 4:08 PM
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I decided to post on the retirement investing board, since it's my retirement planning where this comes up.

Could someone please write me up a detailed budget explaining the costs of children, and how much each additional child will cost? (Assuming the second child will cost slightly less than the first, since you'll already have a playpen).

Ok, seriously now. When I'm explaining my retirement plans on the Fool discussion boards and mention that my wife and I will be having kids (or at least 1), I immediately get two reactions. First I get "Then give up planning your retirement, each kid will throw that back at least 20 years", and then I get "Kids don't cost nearly as much as that guy says, he's crazy, you just have to be smart about it".

I have 3 younger sisters (and a nice 6 year gap between myself and my oldest sister) so I was able to watch them grow up. I have a vague idea as to what a child requires. Could anyone slightly help me with some type of concrete numbers? I'm not asking for a budget (as funny as that was). I just really don't have a clue. You hear figures quoted all the time about 25k per year per child, and total cost of 1M for each child you have, etc. I'd love to know where these numbers are coming from.

How much of a child are required costs, and how much are extras? I know my parents spent obscene amounts of money on myself and my sisters, but very little of what I saw was needed. IE expensive vacations, $150 pairs of shoes a few times a year, way too many expensive toys (pinball machine, air hockey, foosball, in-ground pool). There's food, clothing (can be very reasonable in these areas if you don't go out a lot and you can shop at Kohls rather than Structure), medical (should be covered for a bit extra on our existing medical policy). What else am I missing?

College is the obvious one, but if I put a bit away into a 529 every year after they're born and they head to a nice public in-state college, it shouldn't break the bank.

So any information from you wise older people (or even younger I suppose) would be a great help.
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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42850 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 4:31 PM
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The costs vary a lot, depending on what your decide to do.

Since my wife and I both have had careers, we needed from the beginning to make provisions for child care. Also, we sent our children to private school. My daughter through high school; my son through junior high school. Private school with after-school care now costs around $15,000/year. More if you want "prestige", which is worthless. But the kids did get an excellent education.

That was the big expense. I never calculated out the cost of food and clothing.

Then there is college. That can be anything.

There are some people who are so focused on retiring or retiring early that they simply refuse to pay for their children's college education. I do not have any sympathy with that.

We have never spent much money on vacations or expensive toys. We never pushed the kids to join local teams. I felt that with school from 7:00 in the morning to 6:00 in the evening, they should have the weekends and evenings off for play. That may or may not have been a good thing.

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Author: rosietomato Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42851 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 4:35 PM
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Day care
Babysitter
Bandaids
Auto Insurance for teenagers
Braces

Children are NOT cheap.

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Author: Quakeboy02 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42852 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 5:02 PM
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Children are NOT cheap.

I'd have to disagree. They're the cheapest investment with the highest rate of return you'll ever make in your life.

Hedge

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Author: rosietomato Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42853 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 5:04 PM
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>I'd have to disagree. They're the cheapest investment with the highest rate of return you'll ever make in your life.
>
Please note that I was responding on the factual/economic/cost level not the emotional level. It is not up to me to make value judgements concerning the 'worth' of children.


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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42855 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 5:25 PM
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Day care
Babysitter
Bandaids
Auto Insurance for teenagers
Braces

Children are NOT cheap.


Thanks, finally I have at least a few items I can work with :)

Day care - My wife's company offers day-care on site. We have no idea how much it costs, what the waiting time is (she heard there's a long waiting list), etc. That could make a big difference on things, and having the kid a minutes walk from where she works would be great.

Babysitter - If they're at day-care, no need for a babysitter then. As for normal dates (mom and dad go out things), I have my parents nearby, about 10 sets of aunts and uncles. That's one financial thing my family has always gotten right, I've never seen a babysitter that's not a relative, and I assume my wife and I will go along the same track.

Bandaids - Well, they're pretty cheap :)

Autoinsurance - I know most of my friends had to work to pay for their own insurance if they wanted to drive. I assume my wife and I will have to pay for at least a portion of it since I want our kids to have some free time. That's a good point, something to keep in mind.

Braces - Are braces covered by medical insurance? I know insurance is certainly a cost that will go up.

Auto insurance is a big one, along with medical insurance. Day care could be big, we'll see what we learn about DW's work's day care program.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42856 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 5:32 PM
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Auto insurance is a big one, along with medical insurance. Day care could be big, we'll see what we learn about DW's work's day care program.

You would be smart to educate yourself in the inrtricacies of your possible health insurance options. If you are both working, then the first child might be the "plus one" on one of your policies which could be cheaper than the family option.

Also, when you look at day care and medical costs, you'll need to check out flexible spending accounts vs tax credits, etc.

I have 3 children - the youngest is 17. Some of the costs are pretty difficult to project. If early retirement is a big goal, you might want to reconsider kids - seriously. Rent the movie Parenthood and decide whether you like the roller coaster or you really prefer the merry go round :)

rad

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Author: dofitch1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42857 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 6:00 PM
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As I stated in a previous post, if you wait until you think you can afford kids, you'll probably never have any. The sooner you have them, the less they will cost in inlated dollars. Kids require 3 things, food, housing, and unconditional love. If they have the last, the rest will work out for all of you. If finances are your primary goal, you probably shouldn't have kids, but then you would miss grandchildren, and they are certainly special. Regards, Hal

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Author: dofitch1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42858 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 6:03 PM
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ps. Since my kids are 30 years old, I think I spend more on the grandchild than I did on them. Don't think the expenses will magically go away when they turn 21. However, if you have them soon enough (I was 19) when you are in your peak earning years, they will be out of the house (and hopefully out of the budget) when you will be making and hopefully saving the most. Hal

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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42863 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 8:00 PM
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As I stated in a previous post, if you wait until you think you can afford kids, you'll probably never have any.

Well, that's not necessarily true, at least in our situation. We have 3 empty bedrooms, and our budget has an extra 2k per month that's not spoken for in our retirement plan, so affording them isn't necessarily the issue, just assuming a single child won't cost an extra 2k every month.

If finances are your primary goal, you probably shouldn't have kids, but then you would miss grandchildren, and they are certainly special.

Certainly not our primary goal, but I would like to think that I can balance all of our goals. If kids came with annuities to pay for every one of their costs and they added 3 years onto our lifespan for each child, it's possible we'd have 4 or 5 of them. However, our goals in life include both raising children, and having a rewarding retirement. So I'm budgeting for a child (or possibly two), and making plans for retirement as well. We will put off our retirement in order to have the child if needed, but I don't see any reason so far that it's necessary. I might need to cancel our pinball machine budget, but golly, if that's the worst thing then I'm pretty happy.

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Author: rosietomato Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42866 of 75826
Subject: Re: How much do children cost? Date: 10/25/2004 8:15 PM
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>As I stated in a previous post, if you wait until you think you can afford kids, you'll probably never have any.
>
I don't believe thats how it works after the first rugrat is born. You will probably become so enthralled with your kids, all your nickel and dime planning will be out the window!!!<g>!

rosietomato
(I was busy the day God passed out the Mother genes!)

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Author: pekinrobin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42871 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 10:42 AM
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It depends on your school district. Some people, such as in many areas of Orleans Parish, have to send their child to expensive private schools (or else still fairly pricey and exceeding inferior fundamentalist private schools) starting with kindergarten!

In my parish, the public schools are better than the best private schools and are known state-wide, if not throughout the south, so you have no education costs until college.

There is not really any "group discount" for having more children, as each child eats her own food, needs her own medicine and education. The tiny amount you save by handing down playpens and making your child be the butt of jokes by wearing hand-me-downs is not even worth considering.

Also, there is the issue of, when you have a child, you are inviting a stranger into your home, not knowing that person in advance. There is no guarantee of a healthy child. This was my parents' issue. They did not expect to get a sick child. While the associated costs of my condition were fairly trivial back in the day, since there was no treatment, today the parents of a high-functioning autistic can be expected to be soaked of pretty much every dime they have in their pocket for unproven treatments. And if your child is sick, you'll do it too, anything for hope of a better future for your child.

So the costs are truly unpredictable.

If you are a "control freak," I wish you wouldn't have children. If you can roll with the punches and accept the unknowable, it is a lot more pleasant for any children you might have. If every dollar must be accounted for, your child will not have pleasant memories of childhood. Only you can be the judge. No one here, when all is said and done, can tell you the cost of having YOUR child.

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Author: pekinrobin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42872 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 10:50 AM
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Kids require 3 things, food, housing, and unconditional love

This way lies madness.

Children require medicine and education.

You probably already buy food, and you probably have a house already.

The big costs are medicine and education, which are unpredictable. One child may go to community college, and end up living on your couch until he's 40 -- as happened to a friend of mine -- costing his mother (a widow), oh, let's guess $200K after age 21? Another child might go to a real college, actually get a job, and only cost you $100K. We won't even talk about the costs of medicine, counseling, etc. or the increase in childhood diseases like autism, peanut allergy (didn't even exist in my childhood), and so forth. Two of my friends had childhood diabetes -- think about what that might cost. And they weren't fat kids either, it wasn't something they brought on themselves.

Any parent who doesn't realize that kids get sick must have been very, very, VERY fortunate because kids do get sick and quite unpredictably.

Unconditional love is another unknowable. You don't know before the child arrives if you will be capable of it. Many women are not -- hence the phenomenom of post-natal depression, which sometimes leads to suicide of the mother. Not all mothers love little kids. Mine didn't. Don't assume, if you dislike screaming babies, that you will suddenly love one because she's yours. For some, the hormones get stirred up and all works well and they're addicted to the kids and have this addictive type unconditional love. For others, love is hard to come by, at least until the kids are older and you can all be together as adults and look back on the hard times and laugh.

In either case, unconditional love is not something that can be faked or purchased. It is beyond your control whether you love someone.

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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42873 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 10:59 AM
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One child may go to community college, and end up living on your couch until he's 40 -- as happened to a friend of mine -- costing his mother (a widow), oh, let's guess $200K after age 21?

It won't cost this much if you kick the bum out and change the locks.

IF

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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42874 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 11:14 AM
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I'm still in the early stages with a 4 month old, but I can think of two things that haven't really been discussed yet:

- Extra housing expense. If you don't already own a large enough home to house yourselves and add a couple of kids, this can be a killer.

- The possibility of a SAHM, at least for a few years. Realize that when you have a child with a dual income family, you may be looking at the prospect of putting a 3 or 6 month-old in daycare. This may be hard for you and/or your wife. We made the decision a year in advance that we did not want to put an infant in day care, so my wife quit her job, took some time to recharge her batteries, and then started her private practice. She pursues her business on a part time basis now and her primary duty is taking care of the kiddo and keeping up with the stuff that I just do not have time to get to. For us, this was only a modest financial sacrifice, since we figured out that after the incremental costs of working, taxes, and paying for daycare all we were losing out on was roughly minimum wage. However, this is not a decision to be made lightly and you should at least consider the possibility in tallying up the costs.

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Author: dofitch1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42875 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 12:28 PM
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I have worked for a major corporation most of my adult life and always had excellent medical insurance. My kids were both healthy, and my wife had a daycare in the home, so was there if either were sick. I was spoiled.
My son went to MIT and got a 5 year masters with a double major. He had 75k in student loans when he got done, but he got the education he wanted. I sent $400 a month to him during his freshman year. The parent loans I took out were paid by him. I was spoiled.
I said you had to provide them with unconditional love. I stand by that. If you don't think you can love them more than yourself, you are probably incapable of this one. Sorry for your personal experiences in this area, but it is a necessity if they are going to grow up to be self assured and happy. Otherwise, you had better plan more money for their councelling. Hal

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Author: gogreengo Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42876 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 12:30 PM
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They're the cheapest investment with the highest rate of return you'll ever make in your life.

Well, I hope people don't have kids to get some kind of "return"! Like grandkids, or rides to the airport, or visits every holiday. Wouldn't that be selfish?


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Author: Quakeboy02 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42877 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 12:50 PM
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After reading these posts, I have to conclude that many (most?) of those posting just shouldn't be parents. Dofitch1 has it right. Love your child, teach him/her responsibility and it'll all work out without breaking you. It can get lonely when you get old, though. So be prepared for that.

Hedge

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Author: Quakeboy02 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42878 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 12:51 PM
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Exactly! Or, in financial terms, the joy of seeing a successful startup with your name on the door.

Hedge

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Author: gogreengo Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42879 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 12:54 PM
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After reading these posts, I have to conclude that many (most?) of those posting just shouldn't be parents.

Wow.



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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42883 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 4:44 PM
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Thanks, finally I have at least a few items I can work with :)

Here is another item that might not be thought about much. When you have kids, it will typically mean you need a larger residence that if it was just you and a spouse. With the larger residence comes increased utility costs and most likely higher property taxes.

In addition to a larger residence, you may very well need a larger vehicle. If you have a two-seater now, that will need to be replaced with something bigger. The bigger car may cost more in insurance and will most likely cost more in fuel as well.

Outside of these two things, I think most of your expenses will be in the line of activities such as park district classes or sports, clothing, food, books, toys/games, gifts, school, etc.

For instance, our oldest just started kindergarten and our youngest just started preschool. The preschool is through the park district and that runs $96 per month for two days per week. Last year my oldes went three days per week and I believe that was $115 per month.

Our oldest is in karate and that runs $49 per month. Over the summer he played T-Ball and that came with a fee, as well as the cost of buying a glove or anything else he may not have already had. Our kids both love books so we are often picking up books at garage sales or used book stores. Rarely do we order new books, unless it is from the school programs.

Other big expenses could be medical, dental or vision costs. My one son has been seeing a particular doctor since he was born. My insurance just changed and his doctor and hospital are not in the new plan, which means higher costs for us out of pocket now.

With all of that said, I have not really ever tried to sit down and compute the cost. We would not trade having our kids for anything, even if it meant FIRE tomorrow. It is possible to have kids and save for retirement, as myself and others are doing. Life is about sacrifices and only you can decide which sacrifices are worth making.

dt

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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42884 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 5:15 PM
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Well, thinking ahead and planning these things also helps save money in the future. My wife and I knowing we might have children already bought a house with extra bedrooms so that we could have children here. We also made sure to buy in a great school district (so we won't need to pay for private school if we don't want to). On a side bonus, it also made our house extremely easy to sell, since people are lined up to move into the neighborhood. And as a double bonus, since it was our first house, it's the cheapest on the block, making it even more likely to keep it's value.

Utilities are a good point, I like to keep the AC and heat low since I just hate to think of the money being wasted, but I wouldn't want to freeze/melt the kids :)

As for cars, we'll probably need to upgrade one at some point in time. We have a 4 seater car, but it doesn't have much extra space, so vacations would be difficult. I'm thinking I could trade in the 3 seater pickup for a more expensive 4 seater for any larger trips that are needed. That's a good point as to a cost I'll need to think about.

I've saved all my books since I was a baby (well, I admit my parents saved the books from when I was younger), so I have a large enough library now to keep a kid busy for years. I'll just keep praying that my kid will like to read half as much as I always have.

Our medical plan will require some changing, but since my wife and my companies both offer health care, I think we can switch things around and not cost ourselves too much money.

Someone mentioned that they don't spend much on items, but more often on learning and experiences. I like that approach. I have spent quite a lot of money on classes on myself and have never regretted it, so I'll be happy to send my kids to music lessons, scuba lessons, karate, dancing, etc. The main purchases I've regretted were all objects that I thought I would like and never really got my money's worth out of them. I'm hoping they'll end up with some of the values I've picked up along the way.. we'll see :)

An interesting side note: I spent over 12k last year in Scuba diving expenses (went from never dove to an instructor in about a year.. very intense, lots of diving). I love the idea that I learned so much that year, and even if I don't dive for the next 20 years I'll be glad that I went through the experience. However the few thousand dollars of gear that I haven't used in a couple months is really bothering me. Just interesting how objects don't maintain their value nearly as much as experiences do.

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Author: rosietomato Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42886 of 75826
Subject: Re: How much do children cost? Date: 10/26/2004 9:11 PM
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>It can get lonely when you get old, though. So be prepared for that.
>
It can be lonely whether you have children or not. Loneliness is a state of mind that is chosen by an individual ("Geez my kids don't have time for me anymore" or "Sorry kids can't babysit the grandkids this weekend, my red hat group is heading to NYC for a 'Dinner and Theatre' weekend".

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Author: 1eng One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42911 of 75826
Subject: Re: How much do children cost? Date: 10/27/2004 4:42 PM
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Actually, it's a good question, irrespective of the almost overwhelming human desire to have children without regard to cost, which most people have. My youngest is 18 yr so I know the cost best for the teenager:

Food: $7/ day nails it. So $2000/yr.

Medical: He's healthy. Insurance+ dental+ doctor = $500/yr.

Car: I didn't have to buy one but it helps him get a job and thus develop responsibility. It's a beater. I don't care what anyone thinks about it. He buys gas. Cost including insurance, maintenance, and depreciation = $2000/yr.

Other: School lunch, presents [he wanted a guitar so I bought it, not connected to birthday or Christmas-I can't defend doing it], clothes, toothpaste, etc = $1000/yr.

So overall, the teenage years will be about $5500/yr. For years before age of 14, costs will be less but there's always dentures, dance lessons, and other surprising expendatures. In college, in the Midwest, figure $12,000/yr for a state supported school. I figured paying for 3 years. After that, the kids can get loans and stay there as long as they want on their own dime. So 3x12,000 = $36,000, amortized over 18 years with a reasonable return is = $1500/yr or less.

So I guess, overall, the $100,000 estimate per child, isn't too bad. If it helps to know, it's well worth it, in my opinion. Now, I wish I had three instead of just two children, but time has past for me.

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Author: SteveNieters Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42915 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 12:17 PM
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Good question--and many fine responses. Here are a few things from our experience (three teenaged sons, none yet driving)

1. Babysitter @ 70 hours a week when the kids were young. Replaced by dad quitting job to stay home with kids. Monetary offset by fact that mom can now work longer hours because she has no household or childcare responsibilities. Net after-tax loss from leaving 6 figure job--somewhere in the low five figures a year. (Dad does all maintenance on house too)

2. Education, education, education. College is a given in your case it sounds like. Next questions: How good are your public schools? How likely is it that your kids will have special needs on the extreme right side of the curve? (The other side of the curve is even more expensive, but less predictable.) Summer sessions, math camps, special classes at local colleges and online, travel to national competitions i math/science and the like . . . . Although it may seem "unnecessary," you'll want to work to ensure that your kids aren't bored to the point of becoming problems to themselves and others(granted, an extensive library and the internet can fill some of these needs). There are a host of variables here--even apart from the prestige factor that seemingly drives the most over-the-top school spending.

3. music/Piano lessons? Instruments are expensive if you have one or more kids who have talent.

4. We've refused to participate in this one, but athletic expenditures start early and mount rapidly. Traveling soccer and hockey clubs start in grade school, as do other sports, I'm sure. Many of the boys' friends have substantial expenditures on this area (e.g., hockey teams competing for north american title get very expensive for the parents)

5. Family vacations? Are the Mom and Dad both able to take sufficient time off of work to drive? If not, is one comfortable driving the kids and picking the other adult up at the destination airport? Cost of flying is very high if you have 5 instead of 2. (Same with accomodations and activities, of course.)

6. Regarding food expenditures, it can get difficult to prepare meals if both parents have busy jobs and the kids are in activities. Planning is essential even with one parent at home.

7. Clothes haven't been a big expenditure for us. Hand me downs and even inter-cousin handmedown packages. First purchases can be even cheaper than Kohls/Target. Value City, Symms, and other "out of style" merchandisers are great. (Query whether this would work as well if I had three teenaged girls?)

Someone already said this in another way, but our joy of children has to be quite strong to overcome the economics! And, at least in our case, we have never regretted our decision to raise children. It is a great adventure.

Steve

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42916 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 12:29 PM
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Could someone please write me up a detailed budget explaining the costs of children, and how much each additional child will cost?

The government recently calculated the cost of raising a child from birth to 18 and came up with $160,140 for a middle income family. Talk about sticker shock! That doesn't even touch college tuition. But $160,140 isn't so bad if you break it down. It translates into $8,896.66 a year, $741.38 a month, or $171.08 a week.
http://www.cryobank.com/cost_child.cfm?page=9&sub=58

Add at least another $100,000 for college, and $200,000 is probably a better figure. Each.

Do you know how much of your family's yearly income is spent on your children? Chances are it is more than you think. Knowing how much it costs to raise a child can be helpful for many reasons.

This publication is a valuable tool that will help parents and professionals categorize the costs associated with raising children into six areas.

http://www.idea.iastate.edu/idea/marketplace/costs/

USDA REPORT ESTIMATES CHILD BORN IN 1999 WILL COST $160,140 TO RAISE ($237,000 adjusted for inflation)

WASHINGTON, April 27, 2000 Agriculture Secretary Dan Glickman today released a new report finding that a family with a child born in 1999 can expect to spend about $160,140 ($237,000 when adjusted for inflation) for food, shelter, and other necessities to raise that child over the next
seventeen years.

http://www.usda.gov/news/releases/2000/04/0138

I haven't read any of this in detail, but I would expect this is calculated for the majority of "middle income" families. If you get into "special situations" then the costs could rise dramatically. Special education, autism, legal problems, or other extraordinary things could change these numbers dramatically.

I had a friend in Pittsburgh, falsely accused of several felonies, who had just graduated college, and his parents were forced to re-mortgage their house and empty their retirement to pay his legal bills, which ran well into six figures. (He was eventually found innocent of the 16 various crimes including armed robbery and rape, the real bad guy was caught, and CBS made a movie about it, for which he got $10,000 as a "rights" fee. Didn't come close to repaying the folks, of course. Legal bills are legal bills, they don't just evaporate because you're innocent!)

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Author: Seapickle Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42917 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 12:58 PM
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How much will children cost?

So far by my experience, they don't cost nearly as much as they are worth. A great value investment.

SP

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Author: mawhinney Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42918 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 2:19 PM
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One child may go to community college, and end up living on your couch until he's 40 -- as happened to a friend of mine -- costing his mother (a widow), oh, let's guess $200K after age 21?

It won't cost this much if you kick the bum out and change the locks.

Have you considered "the bum" may be suffering from a mental illness? Despite trying all available medications and therapies, many who suffer from a mental illness find little help. If a person were suffering from an incurable form of cancer, would you toss them out on the street?

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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42919 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 2:34 PM
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Have you considered "the bum" may be suffering from a mental illness? Despite trying all available medications and therapies, many who suffer from a mental illness find little help. If a person were suffering from an incurable form of cancer, would you toss them out on the street?

There is no indication that the person was suffering a medical condition. By using the term "living on your couch", it is reasonable to assume bum unless the widow didn't own a bed.

IF


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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42920 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 3:00 PM
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Now that I have my head in the right mindset, I think it's possible that the costs won't be quite as bad (at least for us) as some people have mentioned.

1. Babysitter - Ok, that one's expensive.

2. Education - Public schools are great in our area (moved here on purpose to have good schools). Public in-state university (University Illinois - Champaigne) is also good. Hopefully the costs will stay reasonable.

3. Music, scuba, athletic etc lessons - Those will probably be somewhat expensive, but will be partially offset by the fact that I assume I won't have time to indulge myself quite as much. IE, last year I spent 12k on scuba lessons. I spent many nights and weekends diving and taking lessons, won't be doing that with kids.

4. Vacations - My wife and I knew that once we had kids we'd have less free time (and free cash), and all the adults around us told us to take advantage of our temporary cash/freedom. In the last few years we went to Grand Cayman, Kauai, Las Vegas, New Orleans, Bahamas, and Florida. When I grew up my family took all their vacations in Wisconsin, we have a couple houses lakeside that I grew up with. It's the 100% perfect place to vacation with kids and I'm certain we'll do the same thing. Sit on the beach with a book, watch kids swim/fish. Take them on canoe trips, water skiing, snorkling, and sit around a campfire at night. All for the cost of gas and property taxes :)

5. Food - I very recently put my wife and myself on a restaurant budget (partly for the money, partly for my increasing waistline). We were spending well over 1k per month on restaurant bills. I would absolutely hate myself if I took my kids out to eat very often, I think it's important to have family time (and eat healthy) especially when they're young. So now that we're getting used to eating in more, that will cut more from our budget.

6. Clothing - Hopefully we'll have boys :) That's a cost that can't be avoided too much. Hand-me-downs will work sometimes, but oh well, it's a cost :)

Just a final disclaimer. This is not a "how much do kids cost because I want to decide if we should have them or not". Here's the exact reasoning:

I have a spreadsheet that goes month by month until I'm 100 years old. I use formulas to calculate increases in spending, income, investments etc. I update it on the 1st of the month with how much each specific account/investment has in it, how much our salaries are, and everything else. While I know it's incredibly inaccurate even looking towards retirement, I figure as each month goes past I'll get a better picture of our financial situation.

I found this especially helps when I'm looking 30 years down the road. I start putting an extra 100 per month into a drip, and 30 years down the road it makes a pretty substantial impact on our finances. So I wanted to be able to make at least a few guesses as to how much children will cost. It could be 75% off, but it will be better than putting question marks across the spreadsheet in 3 years (or however long it will be before we have kids). As time goes along, I think the spreadsheet will be very interesting to look back on. Theoretically I'd love to look at this when I'm 80 and say "look grandkids, see how planning helps you? I'm so rich that I could buy you all cars, but I won't" and then I can cackle a little.

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Author: dofitch1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42922 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 3:14 PM
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I wish I knew enough to do the spreadsheet you are talking about. It sounds a lot better than the way I do it. Hal

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Author: SteveL103 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42924 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 3:25 PM
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A decision to have a child can't be a financial one. While waiting until you have enough resources is certainly prudent, trying to anticipate to cost of rearing a child to 18 in my opinion is not really relevent. AFter all, why are you having a child?

The reality, having a child changes everything--FOR THE BETTER. HAving raised three boys (my oldest is a college grad and married and my youngest a High School Junior) I can say they have been the best additon to my life I ever could have desired.

They come into the world helpless and totally dependent. So you have food, pampers and some baby clothes. A crib and car seat round out the necessities. But the payback is huge.

However, if you're wrapped up in how much it costs, don't do it. IT will be expensive and it gets costlier as they grow older. In your own letter you cited the unnecessary expenses your parents made. I would say that things like vacations and possibly the pool enhanced the family quality of life! The essence of relationships is sharing time and experiences. Watching the kids enjoy vacations and the pool probably brought great joy to your parents.

Finally, you put this on the retirement board because your focused on saving for the future. But what are you saving for--if their are no children and eventually grandchildren to bring the real joy to your household. Who cares what it costs!

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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42925 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 3:50 PM
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A decision to have a child can't be a financial one. While waiting until you have enough resources is certainly prudent, trying to anticipate to cost of rearing a child to 18 in my opinion is not really relevent. AFter all, why are you having a child?

As I already said, deciding to have a child isn't a financial decision. It seems as if you're saying that as long as I've decided to have a child, that there's no point in anticipating the costs. That sounds an awful lot like the people who are in debt 30k on their c-cards, buying big presents for their kids on christmas because "They're my kids, they deserve the best". They're going to be an expense like any other. While I plan on having them, they're certainly going to impact my spending, and I think it's only prudent to anticipate these charges as soon as possible. If I know college expenses for them now, I can make sure I have the correct amount saved up before they hit college. Unless we wish to go with what you appear to be advocating of "Don't look ahead, just make the babies, and everything will be wonderful". I would love to tell my children when they're 10 that their college funds along with some spending money is already in an account and waiting for them.

The reality, having a child changes everything--FOR THE BETTER. HAving raised three boys (my oldest is a college grad and married and my youngest a High School Junior) I can say they have been the best additon to my life I ever could have desired.

They come into the world helpless and totally dependent. So you have food, pampers and some baby clothes. A crib and car seat round out the necessities. But the payback is huge.


Ok, kids are nice, but that has nothing to do with planning for their costs. Good and wonderful things can still be planned and budgeted for. They're not a holy symbol that shouldn't be touched with cash, they're an expense, just like my food is. Just because I enjoy eating doesn't mean that I skip putting it in my budget.

However, if you're wrapped up in how much it costs, don't do it. IT will be expensive and it gets costlier as they grow older. In your own letter you cited the unnecessary expenses your parents made. I would say that things like vacations and possibly the pool enhanced the family quality of life! The essence of relationships is sharing time and experiences. Watching the kids enjoy vacations and the pool probably brought great joy to your parents.

I'm not "wrapped up" in the costs. I'm interested to know the costs. I know they're expensive, as I've said before my parents spent a ton on us. Vacations were sometimes expensive (but not too often). As for the pool (and the pinball machine, and the air hockey, etc), no, I don't think those costs were useful. If I'd had the choice, I'd tell them to invest the money from the pool and the other expensive toys, and put it into their retirement so that I could spend time with them. They're still working, they'll be working until they're at least 65 if not older. It's my opinion that if I plan for the kids, save the right amount, I can spend time with them which will be a lot more valuable than any pool could be.

Finally, you put this on the retirement board because your focused on saving for the future. But what are you saving for--if their are no children and eventually grandchildren to bring the real joy to your household. Who cares what it costs!

Who cares what it costs? You do notice people write food costs into their budgets. They budget for housing, they budget for vacations. These are all things that bring life to our lives. Can't live if you can't eat. Hard to enjoy life without a house. But we still budget for them.

I'm saving for a long life. This life will include living on our own, having children, raising children, sending kids to school, living on our own again, and eventually leaving a little bit to them I'm hoping. I will enjoy kids, they'll be wonderful, and I hope to spend a lot of time with them. If my kids cost 3 times as much as I planned for, that's fine, at least I had an idea and planned conservatively. Much better than many of the parents that I know, throwing college expenses onto credit cards and complaining about the costs that they really should have planned for.

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Author: pokeller One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42930 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 4:56 PM
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Don't forget the weddings! and the air fares! and the expanded cell phone bills. Even when they're gone, they're not gone.

Add a few bucks to a Car Replacement Fund. It will cost you plenty over and above what the insurance will pay for your car that gets totalled because the *wonderous* air bags deploy when they slide into a curb on a wet day. (A couple thousand even when replacing with a pos!)

...and don't forget the Bounce. We are expecting our Bouncer to show up early next month and have no idea of what is going to happen. We still look forward to an "early" retirement, just a little delayed.


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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42931 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 5:01 PM
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...and don't forget the Bounce. We are expecting our Bouncer to show up early next month and have no idea of what is going to happen.

We have no bounce. Our kids know they are not welcome to live at home after college unless they are seriously ill. Actually, once our last is off to college, we'll be moving to a smaller place and are not planning for room for kids except for short visits.

rad

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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42932 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 5:20 PM
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I did a bounce and I'm guessing my sisters might as well. That worked out pretty good for us. My wife and I moved into my parents house for about 2 months. I did all the yard work and dishes, cooked meals and looked for jobs. We both found some pretty quick and moved out. My parents were pretty happy having the company and having people around to do extra chores :)

They even offered to let us stay for a few years to build up a really big nest egg, but we weren't very good at thinking ahead at the time. 2 nice salaries coming in with no expenses.. that would have been nice, 95% savings rate? :)

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Author: MaggieWill Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42935 of 75826
Subject: Re: How much do children cost? Date: 10/28/2004 9:43 PM
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I admire your brilliant projection and I think you will certainly do better than I did. Don't count too much on life being predictable, though. You never know what lies ahead or how things will turn out. When my husband and I brought our children into the world, he was making an extremely comfortable living and I was lucky enough to be able to stay home with them until they were both in school. I've never regretted that, even though being on the Mommy Track didn't set me up too well for when my husband left us and started another family in another country and left me and the kids high and dry. Getting my kids through their teen years and college without any help at all from him wasn't easy and I ended up pretty much completely broke when that job was done. I'll probably never have enough money to retire, but I know with absolute certainty that I would be 1000% more impoverished if I didn't have my kids. So plan away -- I did. But just keep in mind that unless you truly control the universe, the best laid plans of mice and men oft go awry.

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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42936 of 75826
Subject: Re: How much do children cost? Date: 10/29/2004 9:52 AM
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Here are the main costs I am aware of:



First 3 years, diapers. We buy them at bulk at Costco for 30 bucks for 144 about. They go through probably 4 a day roughly. So that is 25 bucks a month per kid for 3 years.

I will put "kid start up costs" at around $1,000 for breast pump, and other items you can not find hand me down. Really really try to get a hand me down crib, basinette, clothing, etc!

Acquiring the kid costs around $1,500 for things medical insurance did not cover for each of our kids. Maybe your medical insurance is better than mine.


Clothing: $20 a month, supplementing hand me downs or friends kids clothing

Entertainment: $20 a month for little toys, ice creams, etc.

College: $150 a month. This will give you $1800 a year or $32,400, a cheap in state school assuming the money grows at the rate college tuition goes up. A better in state school assuming it goes up faster.

Formula: $15 a month as a supplement to breast feeding for first year.

Baby food/extra food: $30 a month per kid.

Preschool: $100 a month for ages 2-5, assuming only goes a half day a week a couple days a week. I assume you may forego this with multiple kids, but you may have associated equal costs later on too (lessons, whatever). This is of course at your discretion.

Medical insurance: This depends on your plan. For mine, I think it is $80 more per month for family coverage, but this includes any number of kids.

I am leaving off buying a bigger house for the room or a bigger car for the space.

Here is a rough estimate to work into your budget. Try making your own spreadsheet:
Month   Year   Diaper   Misc     medical  college  Food    Preschool
1.00 0.08 30 $1,000 $1,500 150 15
2.00 0.17 30 20 80 150 15
3.00 0.25 30 20 80 150 15
4.00 0.33 30 20 80 150 15
5.00 0.42 30 20 80 150 15
6.00 0.50 30 20 80 150 15
7.00 0.58 30 20 80 150 15
8.00 0.67 30 20 80 150 15
9.00 0.75 30 20 80 150 15
10.00 0.83 30 20 80 150 15
11.00 0.92 30 20 80 150 15
12.00 1.00 30 20 80 150 15
13.00 1.08 30 20 80 150 30
14.00 1.17 30 20 80 150 30
15.00 1.25 30 20 80 150 30
16.00 1.33 30 20 80 150 30
17.00 1.42 30 20 80 150 30
18.00 1.50 30 20 80 150 30
19.00 1.58 30 20 80 150 30
20.00 1.67 30 20 80 150 30
21.00 1.75 30 20 80 150 30
22.00 1.83 30 20 80 150 30
23.00 1.92 30 20 80 150 30
24.00 2.00 30 20 80 150 30 100
25.00 2.08 30 20 80 150 30 100
26.00 2.17 30 20 80 150 30 100
27.00 2.25 30 20 80 150 30 100
28.00 2.33 30 20 80 150 30 100
29.00 2.42 30 20 80 150 30 100
30.00 2.50 30 20 80 150 30 100
31.00 2.58 30 20 80 150 30 100
32.00 2.67 30 20 80 150 30 100
33.00 2.75 30 20 80 150 30 100
34.00 2.83 30 20 80 150 30 100
35.00 2.92 30 20 80 150 30 100
36.00 3.00 30 20 80 150 30 100
37.00 3.08 20 80 150 30 100
38.00 3.17 20 80 150 30 100
39.00 3.25 20 80 150 30 100
40.00 3.33 20 80 150 30 100
41.00 3.42 20 80 150 30 100
42.00 3.50 20 80 150 30 100
43.00 3.58 20 80 150 30 100
44.00 3.67 20 80 150 30 100
45.00 3.75 20 80 150 30 100
46.00 3.83 20 80 150 30 100
47.00 3.92 20 80 150 30 100
48.00 4.00 20 80 150 30 100
49.00 4.08 20 80 150 30 100
50.00 4.17 20 80 150 30 100
51.00 4.25 20 80 150 30 100
52.00 4.33 20 80 150 30 100
53.00 4.42 20 80 150 30 100
54.00 4.50 20 80 150 30 100
55.00 4.58 20 80 150 30 100
56.00 4.67 20 80 150 30 100
57.00 4.75 20 80 150 30 100
58.00 4.83 20 80 150 30 100
59.00 4.92 20 80 150 30 100
60.00 5.00 20 80 150 30 100
61.00 5.08 20 80 150 30
62.00 5.17 20 80 150 30
63.00 5.25 20 80 150 30
64.00 5.33 20 80 150 30
65.00 5.42 20 80 150 30
66.00 5.50 20 80 150 30
67.00 5.58 20 80 150 30
68.00 5.67 20 80 150 30
69.00 5.75 20 80 150 30
70.00 5.83 20 80 150 30
71.00 5.92 20 80 150 30
72.00 6.00 20 80 150 30
73.00 6.08 20 80 150 30
74.00 6.17 20 80 150 30
75.00 6.25 20 80 150 30
76.00 6.33 20 80 150 30
77.00 6.42 20 80 150 30
78.00 6.50 20 80 150 30
79.00 6.58 20 80 150 30
80.00 6.67 20 80 150 30
81.00 6.75 20 80 150 30
82.00 6.83 20 80 150 30
83.00 6.92 20 80 150 30
84.00 7.00 20 80 150 30
85.00 7.08 20 80 150 30
86.00 7.17 20 80 150 30
87.00 7.25 20 80 150 30
88.00 7.33 20 80 150 30
89.00 7.42 20 80 150 30
90.00 7.50 20 80 150 30
91.00 7.58 20 80 150 30
92.00 7.67 20 80 150 30
93.00 7.75 20 80 150 30
94.00 7.83 20 80 150 30
95.00 7.92 20 80 150 30
96.00 8.00 20 80 150 30
97.00 8.08 20 80 150 30
98.00 8.17 20 80 150 30
99.00 8.25 20 80 150 30
100.00 8.33 20 80 150 30
101.00 8.42 20 80 150 30
102.00 8.50 20 80 150 30
103.00 8.58 20 80 150 30
104.00 8.67 20 80 150 30
105.00 8.75 20 80 150 30
106.00 8.83 20 80 150 30
107.00 8.92 20 80 150 30
108.00 9.00 20 80 150 30
109.00 9.08 20 80 150 30
110.00 9.17 20 80 150 30
111.00 9.25 20 80 150 30
112.00 9.33 20 80 150 30
113.00 9.42 20 80 150 30
114.00 9.50 20 80 150 30
115.00 9.58 20 80 150 30
116.00 9.67 20 80 150 30
117.00 9.75 20 80 150 30
118.00 9.83 20 80 150 30
119.00 9.92 20 80 150 30
120.00 10.00 20 80 150 30
121.00 10.08 20 80 150 30
122.00 10.17 20 80 150 30
123.00 10.25 20 80 150 30
124.00 10.33 20 80 150 30
125.00 10.42 20 80 150 30
126.00 10.50 20 80 150 30
127.00 10.58 20 80 150 30
128.00 10.67 20 80 150 30
129.00 10.75 20 80 150 30
130.00 10.83 20 80 150 30
131.00 10.92 20 80 150 30
132.00 11.00 20 80 150 30
133.00 11.08 20 80 150 30
134.00 11.17 20 80 150 30
135.00 11.25 20 80 150 30
136.00 11.33 20 80 150 30
137.00 11.42 20 80 150 30
138.00 11.50 20 80 150 30
139.00 11.58 20 80 150 30
140.00 11.67 20 80 150 30
141.00 11.75 20 80 150 30
142.00 11.83 20 80 150 30
143.00 11.92 20 80 150 30
144.00 12.00 20 80 150 30
145.00 12.08 20 80 150 30
146.00 12.17 20 80 150 30
147.00 12.25 20 80 150 30
148.00 12.33 20 80 150 30
149.00 12.42 20 80 150 30
150.00 12.50 20 80 150 30
151.00 12.58 20 80 150 30
152.00 12.67 20 80 150 30
153.00 12.75 20 80 150 30
154.00 12.83 20 80 150 30
155.00 12.92 20 80 150 30
156.00 13.00 20 80 150 30
157.00 13.08 20 80 150 30
158.00 13.17 20 80 150 30
159.00 13.25 20 80 150 30
160.00 13.33 20 80 150 30
161.00 13.42 20 80 150 30
162.00 13.50 20 80 150 30
163.00 13.58 20 80 150 30
164.00 13.67 20 80 150 30
165.00 13.75 20 80 150 30
166.00 13.83 20 80 150 30
167.00 13.92 20 80 150 30
168.00 14.00 20 80 150 30
169.00 14.08 20 80 150 30
170.00 14.17 20 80 150 30
171.00 14.25 20 80 150 30
172.00 14.33 20 80 150 30
173.00 14.42 20 80 150 30
174.00 14.50 20 80 150 30
175.00 14.58 20 80 150 30
176.00 14.67 20 80 150 30
177.00 14.75 20 80 150 30
178.00 14.83 20 80 150 30
179.00 14.92 20 80 150 30
180.00 15.00 20 80 150 30
181.00 15.08 20 80 150 30
182.00 15.17 20 80 150 30
183.00 15.25 20 80 150 30
184.00 15.33 20 80 150 30
185.00 15.42 20 80 150 30
186.00 15.50 20 80 150 30
187.00 15.58 20 80 150 30
188.00 15.67 20 80 150 30
189.00 15.75 20 80 150 30
190.00 15.83 20 80 150 30
191.00 15.92 20 80 150 30
192.00 16.00 20 80 150 30
193.00 16.08 20 80 150 30
194.00 16.17 20 80 150 30
195.00 16.25 20 80 150 30
196.00 16.33 20 80 150 30
197.00 16.42 20 80 150 30
198.00 16.50 20 80 150 30
199.00 16.58 20 80 150 30
200.00 16.67 20 80 150 30
201.00 16.75 20 80 150 30
202.00 16.83 20 80 150 30
203.00 16.92 20 80 150 30
204.00 17.00 20 80 150 30
205.00 17.08 20 80 150 30
206.00 17.17 20 80 150 30
207.00 17.25 20 80 150 30
208.00 17.33 20 80 150 30
209.00 17.42 20 80 150 30
210.00 17.50 20 80 150 30
211.00 17.58 20 80 150 30
212.00 17.67 20 80 150 30
213.00 17.75 20 80 150 30
214.00 17.83 20 80 150 30
215.00 17.92 20 80 150 30
216.00 18.00 20 80 150 30
$5,300 $18,700 $32,400 $6,300 $3,700

Total $62,700
2nd kid $43,000








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Author: MaryGoodnight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42937 of 75826
Subject: Re: How much do children cost? Date: 10/29/2004 7:28 PM
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Our biggest costs for our daughter were after school daycare and summer camps. Thankfully, we were able to pay for these on a pre-tax basis, so that really helped a lot.

I don't really see a big difference in the food budget when she's here during the school year versus gone during the summer. It seems 3 can eat as cheaply as 2.

We've gotten lots of clothes from girl cousins with spendthrift parents, except for a few pairs of new jeans each year and a couple pairs of new sneakers. The other stuff is cheap.

No braces, but she wears glasses...and loses them frequently :) that's how kids are. I can get two pairs for $100 at a local eyeplace and pay for them on a pre-tax basis.

We do pay more for healthcare as a family of three, than two.

Her hobbies are cheap and she doesn't like to participate in sports, so no costs there.

In some ways, she saves us money! With two parents working out of the home and one that travels a lot, we don't have much time for cleaning and other small household tasks.

As she's gotten older, she takes on some housework that we would otherwise have to pay quite a bit more for, if we hired it out.

We reward her with Blockbuster rentals, Starbucks, DVDs, game software -it's all cheap and she gets valuable lessons for life.

It seems weird, but practical I guess, to discuss her in financial terms. Her love is worth ten times all of that and more.


MG



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Author: EspressoSW One star, 50 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42938 of 75826
Subject: Re: How much do children cost? Date: 10/30/2004 1:54 AM
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Wow, it's a good thing all this information about how much kids cost wasn't around before we started our family! Those 160K+ figures from the government would have sounded pretty scary when we were first starting out! But like a lot of things, once you have done it, it doesn't seem so hard.

Several posts have done a good job on expenses already, let me just make a couple of points:

Eating out: this *could* really go up with the number of diners, but ... as a couple we ate out 3 times a week; now with kids it's more like 1-2 times, and chances are we are going to a downscale, kid-friendly place <g>. Net increase, none.

Medical: for us (healthy kids, no braces) average of an extra $500/year per child even with high-deductible insurance, but this is a huge wildcard and is really impossible to forecast.

Education: even with the excellent public schools here, we spend about $1000/year for music lessons for one child and about $600 for activities, fundraisers, and books for each. We did elect to send them to preschool for 3 years each (about $3500/year).

In sum, for both kids, I would guess that over 28 years we will end up spending 240K plus another 160K for college – significant, but a lot less than we would have spent (including interest and upkeep) on a vacation home. Life is about choices, and we're happy with ours.

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Author: khaar Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42957 of 75826
Subject: Re: How much do children cost? Date: 11/1/2004 6:45 PM
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Could someone please write me up a detailed budget explaining the costs of children, and how much each additional child will cost?

Have no idea what our two kids cost each year--we have enough disposable income (and our tastes are simple enough, and we live in an area where the cost of living is low) that we pretty much do what we want. However, the initial cost of my son was 118 acres of land at Priest Lake, ID (long story); of my daughter, a 3.5-week trip around China after a year of getting all kinds of documents blessed by local, state, federal, and Chinese officials.

First I get "Then give up planning your retirement, each kid will throw that back at least 20 years", and then I get "Kids don't cost nearly as much as that guy says, he's crazy, you just have to be smart about it".

Our culture always seems to be looking for a simple explanation or answer for things that have none!

Kids, being human, cost about as much as any other human--which means it all depends. Personalities (of kids and parents), available money and time, environment, etc., all play into the equation. Some parents insist that their kids be involved in organized sports or music by age X; some parents are very strict about what their kids eat; etc. You can get wonderful second-hand clothing and toys for very little money (although a large box will still be the favorite toy of most kids). Vacations can be extravagant or frequent picnics at nearby points of interest. While some schools are exceptionally bad or good, parental involvement is generally much more critical than the school. What is important to you and your spouse? What do your parents and siblings think--and how much will that play into your decisions?

Absolutely plan! Use your experiences growing up, observe what others do, ask questions (like you have on this board) to come up with your best guess on how things will work. As with all planning, note best/worst/most likely cases, plan for some contingencies, give it your best shot, and then rework the plan as needed. Planning for kids is no different from planning for anything else--you're trying to predict the future, and a large part of the value is in the planning process itself. Big difference is that when you do planning for you, you know something about you. A kid is a semi-unknown quantity for a number of years, although most kids tend to have personality traits similar to those of their parents (this should scare you about to death, regardless of how "good" or "bad" you were as a kid!!).

Some people swear that by having kids when you're young and having them out of the house by the time you're 35-40 is the only way to go. As an older parent (we were 36 and 37 when first kid came--he's 10 now), I can't imagine having had kids at 20 or 25--I would have been a terrible parent! True, we may never see grandkids if our kids wait as long as we did, but we felt it was more important to be ready to do a good job as parents. Do what seems best for you and then make it work.

Finally, be prepared to have to make some radical changes. While a medical condition is an obvious and expensive possibility, much more likely is the possibility that you, a careful, disciplined, planning type of person, will have to deal with a child who is not.

Sorry this isn't a nice, easy answer--others have provided some numbers, and better numbers can be found by you at your local stores, doctors' offices, schools, etc. Do your homework and figure out what you think will work for you.

Kathleen



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Author: jtcnet Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 42960 of 75826
Subject: Re: How much do children cost? Date: 11/2/2004 12:24 AM
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Not a cost but a blessing. A possibly better question to ask (but might get us all in trouble) is what does a spouse cost?

I have two older sons, and looking at some records of college expenses, the actual dollars cost was about $250K (for the one with nine years education) and $150K (for the one with eight years eductation).

My sons tell me that I cannot take it(dollars I assume) with me when I leave this world, so I might as well spend it on them. Now that I am retired - I also want to make sure to try to give my kids extra money now and an appreciation for it - so I can see its use - rather than when I am six inches under.

Thing I learned most from my children is to love no matter what happens. My generation, the baby boomers, don't always end up with the children we saw in Ozzie and Harriet. Children and their peers can reflect the best and the worst ills of our society. Children help us see that we have our own faults - as we see their faults reflected back in us. You cannot calculate the value for this insight.







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Author: OneLostFool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 43004 of 75826
Subject: Re: How much do children cost? Date: 11/8/2004 12:46 AM
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"I have a spreadsheet that goes month by month until I'm 100 years old. I use formulas to calculate increases in spending, income, investments etc..."

Forget the kids - I want your spreadsheet! Did you make it up from scratch or are you using software?

OLF

(PS: boyfriend swears the cost is closer to the $160K figure, but I argue that's over-spending a bit and not LBYM)

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Author: Ceberon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 43014 of 75826
Subject: Re: How much do children cost? Date: 11/8/2004 11:48 AM
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I don't have the updated version at work right now, but I can explain what I wrote. This will probably be long-winded.

First of all, I used openoffice (free, downloadable at http://www.openoffice.org). So no special software other than a free spreadsheet program.

I make a row for each month for the next 50 years (a bit of an overkill there). I ended up doing by hand if I remember right, since I spent far too much time trying to figure out how to do it automatically.

Anyway, I made a column called "Total Value". Then I made columns for every single thing I could think of. I figure as time goes on, I'll add columns as I think of them, but it seemed to come up with a somewhat accurate picture.

I'll explain what I put in each column then.

"Total Value" is just the addition of all the columns to the right of it. So it adds up "Mortgage" (Negative number), "Discover Card" (Negative number), "National City Stock" (Positive number), etc. Then it theoretically gives me the total of my current value for each month.

For the current month, I just type in the exact values for each column as I know them. So I go online, check the values of my stocks, bank accounts, 401k's, etc. Then I checked my mail at home to get my mortgage balance. It doesn't need to be exact to the month I figure, because after 20 months any blips should be just "data noise" (IE, 200 bucks more or less shouldn't make a difference).

For the future months, I just think of how the number is likely to change. I'll give examples:

For my discover card, I subtract $200 each month, and once it hit 0, I just changed the formula to 0's (Since I'd like to believe I'll not add back onto it). FYI, this wasn't very accurate since I paid off around $1000 the first month, but I like being conservative.

For my drips, I do something like this: =(V15*1.005)+100

V15 is the previous month's value for the drip. 1.005 is my return for the month (I calculated that as the monthly return for a 6% annual return rate). Then 100 is the amount I added that month. If I increase my input rate, I'll have to change the formulas. Once again, I check the stock prices and replace the formula with the actual value on the 1st of the month. Once you change to the actual values, all future calculations automatically correct to the new price point.

I use the 1.005 return value for all stock positions, and then I use additions as above to add values.

For mine and my wife's income, I split it out the following way:

Additions to drips and 401k's I just made rough calculations. I increased the 401k contributions by 3% each year to account for salary increases. Once it hit 14k per year I cut off the increases in the event the 401k limits aren't increased. Being conservative again.

I added the known limits into the Roth for the next few years, and then stopped deposits and just let the money grow. Then if we do pass the limit due to some wonderful raises, it won't hurt our Roth balance, and if we can continue to deposit, I'll correct it.

As for tracking expenses/income, it's certainly not perfect. I have a set of columns far to the right of my "balance" columns. One column for "my income - deductions", and then another for my wife's income minus deductions, and then columns for each expense I could think of. The total value left over is called "Extra Cash". I don't add this into our "total value" since it's possible that the "Extra Cash" will end up going into a vacation, new DVD's, etc. So I just use this to make sure that the extra cash column for each month doesn't go negative. I add in extra purchases, so I can see how much our "extra purchases" changes the balance as well. A few months in a row I noticed almost no extra purchases and I found our c-card bills dropping quickly. FYI, I put in another column next to Extra purchases just to put text in to explain what the purchases were (IE, we just had a $600 trip to Denver for the weekend, so that's in there. I figure we'll also be able to see the explanation of why our food bills went up this month, since eating out in Denver was expensive).

I have the netflix, power, water, car loan payments, phone, internet, drips, roth, etc monthly bills coming out, plus food allowances, etc. It just helps to show me keep track of how much an additional monthly expense subtracts from our extra cash flow. I can also then see how easily we could afford to add more to our investments. FYI, I do have a column with our "balances" that keeps track of our checking account, so if we don't spend the extra it does go into our balances.

Here are the actual columns I have at the beginning of the spreadsheet:

Date (1 month per row)

My age, Wife's age (ages were added just so I didn't have to figure it out in my head every time I looked at the chart)

Goal (so I could change our goal if I realized that I wanted more/less money, it's set at 2.5 million right now)

SWR (it's our "Total Value" column multiplied by .04 to get 4% of our total value)

Total Value (Which is the value of our investments, I do not include mortgage or car equity anywhere, since I view them as things we cannot make money off of)

Left to save (which is just the goal minus the total value)

So the most interesting things I've found is to increase how fast I pay off a loan, and notice our Total Value skyrocket 20 years down the road.

I also find it's very interesting to see that while our "Left To Save" may not equal 0 at the time I wanted (Which is understandable since I'm conservative on everything I could think of), if we were willing to accept a lower SWR, I can see a much earlier time when we could retire.

I also can see where to address problems in the future. I'd like to have our mortgage paid off before we retire, so we'll need to think about that. I also never increased our Drip allocations (only putting $100 into a couple drips), so increasing those makes a huge difference in the final numbers.

I think the best thing about spreadsheets is if you use enough simple formulas, you can change a single number and have it make a big difference everywhere else. I also found that I hate having car loans even more than before, since it makes a large difference on my "Total Value". It also subtracts a lot from my "Extra Cash" on my expenses columns.

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Author: TheBreeze Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 43073 of 75826
Subject: Re: How much do children cost? Date: 11/11/2004 5:51 PM
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I calculated it up:
$6783 each
http://boards.fool.com/Message.asp?mid=20225836

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