Personal Finance

How much did it cost you to raise your child?

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  • Nov 26th, 2014 6:16 pm
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Banned
Jul 3, 2013
1508 posts
300 upvotes

How much did it cost you to raise your child?

Hey,

So I currently have a partner but we do not have any children. I am big on planning and would like to prepare myself for the day that we have children (~next 3-5 years). I am currently blessed to have a good career which allows me to save ~50% of my net pay + bonuses.

My question is, what is the incremental cost of raising a child? The only costs that I can think of are food and clothing. Housing, transportation, and so on are not incremental costs as I would be incurring them regardless. My rough math tells me that one child would drive incremental costs of approximately ~$500 a month which works out to $108k over 18 years. In addition, higher education would cost an additional $50-70k.

Basically, if I save ~$106k (PV of $77k for monthly cost, and PV $29k for univ) in principal before the child is born, a return rate of 4% annually would cover 100% of the cost of raising the child plus their university education. I am assuming that I draw the $106k down to zero over the 18 years + university education.

Am I understating the cost of raising a child? My goal is to save enough before the child is born and be able to finance their upbringing + university education off of the interest and principal of the account. Based on my current savings rate it will be very easy for me to do this.
90 replies
Jr. Member
Oct 5, 2014
181 posts
26 upvotes
Desert Blume, AB
You forget about sports and the travel associated with that.
Banned
Jul 3, 2013
1508 posts
300 upvotes
stephenelsker wrote: You forget about sports and the travel associated with that.
What was the average annual cost for your children? Would $500 annually be a fair estimate?
Deal Addict
Nov 11, 2009
1948 posts
337 upvotes
FutureCEO wrote: What was the average annual cost for your children? Would $500 annually be a fair estimate?
If it's hockey... Anywhere from $1,000 to $6,000 depending of the level.
Deal Addict
User avatar
Apr 12, 2012
2905 posts
2578 upvotes
Toronto
Costs a lot more than 100k to raise a child, think of allowances, lunch money, video games, cell phone plan, kids will cry at the store to make you buy things, etc. your probably going to end up spending 300k plus on one by the time they are 18.
Deal Fanatic
User avatar
Nov 2, 2013
5697 posts
1522 upvotes
Edmonton, AB
When i was in vancouver, excluding special things like bigger toys and trips, vacationns (we only had 2 in our entire lives...), it was usually around 1000/mo being extremely frugal. No daycare.
Accountant (Public Practice)
Banned
Jul 3, 2013
1508 posts
300 upvotes
zobi123 wrote: Costs a lot more than 100k to raise a child, think of allowances, lunch money, video games, cell phone plan, kids will cry at the store to make you buy things, etc. your probably going to end up spending 300k plus on one by the time they are 18.
Great input. I knew that I was leaving a lot off the table. My parents raised me on the cheap but times have changed and kids expect a lot more these days.

I need to go back to the drawing board and add all of those things.
Deal Addict
Dec 21, 2010
1864 posts
1174 upvotes
GTA
I read somewhere recently that is costs $250,000 to raise a middle-class child. This is likely inclusive of all extra-curricular activities, some private education/classes/tutors, competitions/tournaments, parties, social gatherings/events, clothing (including seasonal wardrobe changes - rain coats/winter coats/snowpants/bathing suits), footwear (multiply several pairs including shoes/boots/sandals over one year), medication and vitamins, bathing supplies, outtings, furniture (new items or one-time cost averaged over 10 years), toys/amusement/electronics....

The list does go on and on and on.... But it's worth every single cent (spoken like a proud mother!) ;)
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Moderator
May 28, 2012
12485 posts
5278 upvotes
Saskatoon
Extracurricular activities, especially music lessons, can be really expensive. I was paying $24 for each half hour of guitar and piano lessons, add to that the cost of the instruments. $2500-3000/year for tae kwon do, $2000/year for figure skating not including paying the coach for each private lesson which was $12 for every 15 minutes of instruction...then there was the testing fees and uniforms for both activities. Thank goodness they weren't interested in hockey!

To be honest, we didn't do a tally of how much things cost for each child. It's a question of priorities and those tend to change after you have children; you make sacrifices so that they have a good start. Other than birthdays and Christmas, I don't buy the children a lot of "things" but I don't mind paying for activities that enrich their learning.
Sr. Member
Nov 5, 2013
624 posts
122 upvotes
It doesnt surprise that it cost me close the to the figures below to raise my child, considering his exchange trips to europe, china, and puerto rico, his piano lessons, a new car to him during his high school yrs, etc, plus around $100,000 for 4 yr university education (tuition, books, $2,000 laptop, room and board).

CANADA
According to MoneySense.ca, the average cost of raising a child to age 18 is a whopping $243,660. Break down that number, and that’s $12,825 per child, per year -- or $1,070 per month. And that's before you send them off to university.
http://www.canadianliving.com/life/mone ... canada.php

USA
Raising a child born today in the United States to the age of 18 will cost a family $245,340, the U.S. government said in an annual report today.
http://www.cbc.ca/news/business/cost-of ... -1.2739767

UK
Based on a survey called "Cost of a Child" LV= (formerly known as Liverpool Victoria), it costs approximately £222,458 to raise a child in the United Kingdom from birth to 21 years of age.(Approximately US$342,000 at August 2012.)
http://www.lv.com/adviser/working-with- ... id=3111218
Deal Fanatic
User avatar
Jan 27, 2007
5116 posts
984 upvotes
T.
Just save as much as possible. Dont complicate things by saving specifically for a kid.

Sounds like you are saving a lot anyway.

How old are you?
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Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
The expenditures for raising children are quite high. Aside from what others have said the infants and toddler years are probably the most expensive. As fast as you buy clothes they outgrow them. There are diapers, special formulas and foods, a slew of baby products that you'll go through, car seat, crib, stroller, walker, a newly decorated room, babysitters and or nannies, toys, books, learning tools, birthday parties, trips to places you haven't been to since you were a kid, everywhere you go there'll be the cost of a third person to consider and of course in today's world technology and its associated costs plays a big role.

Whatever you think your budget will be double it and never look back, it's all worthwhile.
Deal Addict
Sep 5, 2009
3301 posts
1486 upvotes
The biggest cost for me was maternity leave. The other stuff isn't so bad, it's giving up your salary that stings the most.
Banned
Jul 3, 2013
1508 posts
300 upvotes
dgnr8 wrote: The biggest cost for me was maternity leave. The other stuff isn't so bad, it's giving up your salary that stings the most.
That's exactly it. Imagine if you already saved for all of that before the child was even born.

I want to do that and take the stress off my partner and I.
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User avatar
Dec 18, 2007
4832 posts
759 upvotes
fungery wrote: It doesnt surprise that it cost me close the to the figures below to raise my child, considering his exchange trips to europe, china, and puerto rico, his piano lessons, a new car to him during his high school yrs, etc, plus around $100,000 for 4 yr university education (tuition, books, $2,000 laptop, room and board).

CANADA
According to MoneySense.ca, the average cost of raising a child to age 18 is a whopping $243,660. Break down that number, and that’s $12,825 per child, per year -- or $1,070 per month. And that's before you send them off to university.
http://www.canadianliving.com/life/mone ... canada.php

USA
Raising a child born today in the United States to the age of 18 will cost a family $245,340, the U.S. government said in an annual report today.
http://www.cbc.ca/news/business/cost-of ... -1.2739767

UK
Based on a survey called "Cost of a Child" LV= (formerly known as Liverpool Victoria), it costs approximately £222,458 to raise a child in the United Kingdom from birth to 21 years of age.(Approximately US$342,000 at August 2012.)
http://www.lv.com/adviser/working-with- ... id=3111218
That's crazy!
I'm sure a lot of people do it for less though. Personally I wouldn't pay for all of my kids education. I'd tell them to get a PT job, sure I would help, but no free ride from me. Learn some time management as well as there is more to life than grades.
Deal Addict
Sep 5, 2009
3301 posts
1486 upvotes
Let's further complicate this for you. Take a look at the research about the impact of daycare on child development. Once your bundle of joy pops out you may decide you want a parent home longer, meaning one of you may want to reduce your work hours or take a few years off. $$$...

Save as much as you can pre-baby, but don't delay having a child just because you are saving.
Deal Addict
Dec 5, 2005
1304 posts
960 upvotes
Cambridge,Ontario
Let me go add up the receipts I was going to give them when they left home.I'll be right back :)
Banned
User avatar
Jun 8, 2008
3977 posts
1423 upvotes
Toronto
Sports cost about $1000 for the year per child (summer soccer, swimming, including hockey but it's a fairly cheap league). I have friends who pay 7 times that though.

Infant daycare in the city is about $1500-2000 a month (ouch). Daycare was by far, our greatest expense but you have options obviously and it's short-lived. Our childcare costs are tiny now in comparison to what they once were.

Factor in the cost of life insurance while your kids are dependent.

We travel, so we now double the cost to pay for the 4 of us. Gets expensive but we love it and it's worth it to us.

We made peanuts when we started having kids, it was never a financial decision for us and we make choices all the time about where we choose to spend our money and we involve the kids in those decisions. I suspect financially you'll be fine no matter what, so the preparation you may want to consider is emotional.
Deal Addict
User avatar
Sep 1, 2013
1420 posts
323 upvotes
New Tecumseth, ON
My parents said it cost them their youth and sanity for my brother and I. And grey hairs in their 20s.

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