3rd January 2013 | by MFC Team
The high costs of having, and raising children
Most people know that raising children costs money. From diapers and strollers to clothing, health care, food and schooling, parenthood can put a strain on a family’s financial resources. But would-be parents might be surprised to learn just how expensive raising a child really is. According to MoneySense magazine, it will cost today’s parents a whopping $243, 660 to raise a single child until they are 19 years of age. A recent article in USA Today suggests that the lowest income earners can expect to pay about $212,000 per child, while the highest income earners may pay up to $490,000 per child! These figures do not take into account college education or educational saving plans.
Housing accounts for about 30% of these costs. Childcare, food and education costs also take a significant bite out of the family budget. In Canada for example, daycare costs range from an average of $8460 per year in the province of British Columbia, to as high as $24,000 per year in Toronto. In addition, with the increasing trend toward couples delaying having children until their later reproductive years, many are faced with the financial costs of fertility treatments before their child is even born.
The rising costs associated with raising children have been implicated in the decreasing size of families. According to Statistics Canada, the average number of children per family was 2.7 in 1961. In 2011, that number had decreased to 1.9. In addition, half of all household debt in Canada is owed by couples who have children. Families with children also have 26% more debt than the average household. In the USA, the average number of children per family is 2.1, with considerable variability based on ethnicity.
Despite the significant costs involved in raising children, financial expert Robert McCullagh says many couples should, but often don’t consider finances when planning their families. The transition to parenthood can be challenging enough without the burden of unanticipated financial pressures. If you are considering becoming a parent or if you are already a parent and are considering having another child, it may be wise to consult with a financial planner to discuss your finances and develop a budget and spending plan.
If you want a rough estimate of the cost of raising one or more children, click on the link below:
In the USA – http://www.cnpp.usda.gov/calculatorintro.htm
Read more about this issue here:
Million-dollar babies [Macleans]
The skyrocketing cost of raising kids [Financial Post]
Read more about the USA Today article here.