The True Financial Cost of Having Children
If you have children or are considering it in the future, then you probably know that it can be a hefty investment. In fact, couples in the US can expect to spend between $12,350 and $14,000 a year to raise a child. The lifetime cost of raising a child ranges from $174,690 to $372,210, and depends largely on location and family income level. The average lifetime cost for parents who had a child in 2015 comes in at $233,610 and accounts for costs from birth through age seventeen. While having children can be an expensive venture, it is completely manageable when you have a plan in place.
We’ve put together a list of the most common costs so you can be prepared and at ease as you create your financial plan.
Costs of Childcare
Here in the sunny state of Florida, the average family spends $8,299 on childcare yearly for an infant, $6,571 for a four-year-old and $3,822 per school-aged child. Whether you choose to have a nanny, opt for daycare, or elect to have one parent stay home and raise the child without outside care, there is a cost involved and it helps to be aware of any fees or loss of income early on so you can plan ahead.
Costs associated with school – both private and public
We all know that college is expensive, but there are also costs associated with elementary public school. Parents can expect to pay up to $3,500 a year for extra costs for public schooling. That includes things like extracurricular activities such as sports, field trips, books, and other incidental expenses. This cost will vary quite a bit depending on which activities your child participates in, and is also largely based on your school district as well. The average cost of private elementary school is $7,770 in the US, and private high school is over $13,000 on average.
When it comes to attending college in Florida, in-state students can expect to pay close to $4K per year for tuition, and out-of-state students can expect to pay about $16,500 per year. Even if your children are young, it’s never too early to start planning ahead for his or her future education.
Medical expenses are important too
The average per capita spending on children for medical care was $2,437 in 2012 and continues to rise each year. While many of these costs can be covered by insurance, approximately 17% of these expenses are recorded as “out-of-pocket” expenses for parents. It’s important to make sure that your health coverage will be adequate for your family’s needs, but it’s also a good idea to keep some money in reserve for unexpected doctor’s visits and additional medical expenses.
Start saving for the future
In light of all of this, what is the best way to start saving for your child’s future? We believe that every family deserves to have a plan in place that accounts for all the expenses you can expect to pay for as well as those you might not anticipate. Of course, your situation may or may not include things like private school or sports, and will need to take into account where you live and your socioeconomic status. From birth through the college years, it is important to set up a financial plan that will help you finance all the milestones along the way.