Before having my son, I asked other parents, searched the internet, and tried to forecast the actual per month costs of raising a newborn. In all of the research I had done, I couldn’t come up with the true cost. Some folks said I should spend a certain percentage of my income raising my baby, others gave figures in the thousands per month. I thought this was all bullshit.
Does it really cost $200,000+ to raise a child today? That’s what the US Department of Agriculture says it will cost, so it has to be true, right? I mean, if we spend less than this on our child, it must mean we don’t love them, right? If everyone else is doing it, surely it is the correct thing to do…
Apparently, when I bring this topic up with other parents, my position is strangely controversial: kids cost EXACTLY what you spend on them. If you decide to send them to private preschool to learn Mandarin before they can walk, then sure, you can definitely spend hundreds of thousands of dollars (maybe even millions if you REALLY love your kids…). Oh, and to pay for all of these insane costs, you should ensure both parents are working 50+ hour weeks to make ends meet. This is best for your kids, because the marketing brochures, commercials, and advertisements tell us so.
So we know all of this is bullshit, but what is the truth? Some costs are indirect (like your mortgage, car expenses, life insurance, etc.), some are somewhat direct (increased food costs for a breastfeeding mother), and some are direct (diapers, wipes, clothes, food). We can do a lot of fuzzy math and scare the shit out of new parents about how many bazillions of dollars kids cost, but let’s instead look at the direct costs.
Newborns are simple (and cheap) little beasts. I estimated that our little guy would cost about $300 per month, but he is actually between $100 and $150 per month. He is breastfed, so we don’t have to spend a bunch of cash on formula, so if you are unable to have your kid breastfed and need to buy formula, you will need to increase this per month amount. We use disposable diapers, and this is where the majority of the monthly cost comes from – about $100 for diapers and wipes. Miscellany (extra shirts, burp rags, and swaddles) make up the remaining budget.
We looked into childcare, and had to weigh the financial and non-financial costs of this option. The financial costs would have gobbled up a large majority of one of our salaries. The non-financial cost of having someone else raise our child runs against why we had him in the first place: to raise him ourselves! Therefore, his mom stays at home with him during the day, and he appreciates this very much.
Not everyone has the option (or desire) of having a stay at home parent. Mostly because of financial reasons, but sometimes because of the non-financial reasons (neither parent wants to put their career on hold, or they just aren’t digging the whole parenting thing as much as they thought they would). I’m not going to make evaluations of the non-financial reasons to stay (or not stay) at home – this is up to each individual parent. However, if one parent wants to stay at home and raise the kiddo, you can ALWAYS make this happen financially!
The way we did it was not the result of luck or accident, it was a series of intentional decisions that anyone has the option to make.
We live in a low cost of living part of the country. Food, housing, taxes, transportation, and utilities are relatively inexpensive. We also chose to live close to family, which certainly helps with emotionally supporting our new family. We have friends that live in high cost of living areas literally thousands of miles away from family, and they generally hate their existence once they become parents. So we decided not to do that.
We live below our means, and have been doing so for a long time. We intentionally chose to buy real estate and design our lives to be supported by only one income. Now we are reaping the rewards of not having to worry about money when one of us stays at home to raise our baby.
In summary, kids cost exactly how much you spend on them. I have found that $300 per month is literally more than enough to raise a child in luxury. The true cost for us is closer to $150 per month, so the “surplus” will be used for future “unexpected” costs (medical, dental, extracurriculars, etc.). We are able to afford to have one stay at home parent because we decided to live in a reasonably priced part of the country, and to also live below our means.
If you spend more (or less) than we do, let me know in the comments!