Author Topic: What's the Financial Cost of a Child? Ages 0-18 years  (Read 10572 times)

Captain FIRE

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #50 on: October 18, 2017, 11:54:28 AM »
The biggest one is child care. Depending on what your circumstances are and what cost of living environment you are in - this is the mostly highly variable IMO.

I live in a HCOLA, and have 2 FT working parents with no family around. Infant day care is around $2500/month, with it going down to about $1800/month at 5 years old. After care when they are in school is around $500-750/month.  When we were in a LCOLA, infant care was around $1000/month for some perspective.
Are all daycares in your area this expensive? Or was this one chosen because it is better in some way?

The centers, yes. You might get a slightly better price at an in-home/private place but all the chains (kindercare, bright horizons, etc) are at that price point. At least in the Seattle metro area. If you are in the 'burbs it's probably better.
Coming from a country where daycares are subsidized by the government but perhaps less fancy than their US counterparts, could you help me understand what makes these "brand name" daycares worth the extra cost?

From my experience touring daycares (both centers and homes) in two states, cheaper centers had higher ratios, more teacher turnover, usually had more religion and were more likely to have a TV going when I toured.

More expensive centers had pretty low ratios (my kids had 3 babies to 1 adult when they were in infant rooms), experienced teachers and actual childcare philosophies (Montessori, Reggio, Rei, etc). The more expensive centers have also had a food/meal "Curriculum" with a focus on healthy cooking, fruits and veggies and manners and learning about where food comes from (so they gardened in the summer, took field trips to farms, etc).

We started with a super nice center when my first child was born because it was the first one that had a spot open up on the waitlist and they welcomed me coming in to nurse on my lunch break. After that it was very hard to make a switch to a cheaper center.

Additional factors:
- More space than mandated.  The mandated space is actually pretty small and while they may not "need" to have more, the min. space I saw seemed like people were quite crowded and on top of each other.
- Location.  My home & work both have pricey real estate, which presumably drive up costs of daycare.
- Supply & demand.  I needed to get on a daycare list many months beforehand.  The one in my office I would have needed to sign up more than a year in advance.
- Hours.  My daycare offers up to 11 hrs, which increases their costs by needing shifts for the workers.  They can handle employee sick days and vacations though.

Gin1984

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #51 on: October 18, 2017, 12:14:25 PM »
We live in a suburb of Massachusetts, so relatively HCOL compared to most other states. We avoid most of it by not buying frivolously, but we can't avoid property taxes at 5k annually. Moving isn't an option for another 30 years since her certification (teaching) is only valid in MA. I say 30 years since she wants the pension - which makes me the luckiest guy ever since it will amount to roughly 4k/mo after taxes in retirement - which is more than we (mostly) comfortably live on now if you take the mortgage payment out of the equation.

Question regarding cloth diapers got me distracted on a tangent wondering if I could run a local diaper service via private label diapers/alibaba, so thanks for that :)

Extra curricular activities, I'm in favor of. Really it's what the child shows an interest in - for me it was several sports and a failed attempt to play violin. My wife's major was Art Education, so if it's something creative I'm sure she'll take lead on it.

At present, we don't really vacation. But I'll want my child(ren) to have happy memories like I did growing up, which would be several camping trips to the Cape per Summer and trips to museums. Then again, my brother didn't like camping as much as I did, and wasn't at fond of museums..

For technology, they will have my hand-me-downs and otherwise it will be a Christmas/Birthday kind of thing. I was 16 before my family got cable, and 18 before my first cell phone - I feel I'm better for it. I'll probably provide them with a phone several generations behind 'current' - for the most part my iPhone 5s can do most of the important things the new one can do.

I hadn't even considered cord blood banking, and had to look it up. It's certainly something to consider.

Regarding child care for infant-5 years old; I'm actually shocked the rate is so high. I barely make more than that after taxes. My plan is to either quit my job and stay home with them (wife is top earner), or since I work remotely 4/5 days, try to make it work/see how long I can try to juggle both. Because my wife will collect her pension in retirement (not counting her 403b, nor social security, nor un-estimatable inheritance), I'm in the fortunate position of only having to plan for the 'now'.  If I find maintaining my job isn't tenable, I'll  try to start some sort of side hustle to help contribute.

Anyone here have experience trying to work from home with a child present?
I have and likely you won't be able to do much with a young child present so you'll have to work when your wife is home and on weekends as well as when the baby is sleeping.

ChpBstrd

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #52 on: October 18, 2017, 03:41:51 PM »
I estimate $12-13k per year. That's in a LCOL area with daycare at $7,400/yr and a company that pays 90% of my insurance premiums. The daycare expense will end at age 5 when we plan to put little one in public kindergarten. However, a couple years after that we'll RE and the insurance component will rise to about that.

kayvent

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #53 on: October 21, 2017, 03:22:00 AM »
Single parent, one child. Live in one of the lowest COL areas in Canada.

Some years my child costs me nothing. On other years, she is an accounting benefit of a few thousand dollars. This year she may cost 500-1500 net. She went to three camps, did four sports, goes to daycare, goes to the dentist bi-annually, learned to bike (i.e. I bought her a bike), and she is involved with lots of activities not listed above. I save a couple hundred dollars a month for any possible post-secondary schooling she may go into.

How does this wonky math occur? In the 90s in Canada, greedy bourgeoisie middle class Canadians started seeing their incomes skyrocket. They petitioned the federal and provincial governments to lower their taxes, add in boutique programs or tax breaks, and institute some social benefit programs disproportionately benefiting themselves. Between just three programs (dependent tax write-off, daycare write-off, and CCTB), I get 10k from the governments for having a child. I’m in the top 3% for income for my age.

Even to this day the greedy middle class pester the governments for more relief. Fuck them.
« Last Edit: October 21, 2017, 03:23:54 AM by kayvent »

moof

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #54 on: March 27, 2022, 10:16:17 AM »
I figure that attempting to answer this question will be a lot like answering 'how long is a piece of string?' - but all the same:

What does it cost to raise a child on a yearly basis? Obviously some expenses will fade over time (diapers), and others will spring up (medically or hobby wise); approximately how much should I set aside for every year 1 through 18?

If you can afford it, one parent should stay home until the kids are at least in kindergarten.  So, count on one less income plus all the other costs of raising a kid.   It will delay FIRE, but you won't care (unless you're selfish).
We went this route.  At the time my wife’s job was only 25% of my salary, so it was a no brainer.  A good job landed in her lap right as the kid went to kindergarten.  Now she still has that job and I am RE.

Kids cost a a metric tonne of time.  If you try and live your old life by outsourcing that time to others it will cost a ton of money.  If you fall for all the heart string tugging marketing to get the best for your kids it will cost a ton of money.  If you roll the dice and have kids with major health or behavioral issues it will cost a ton of money and sanity.

I love my kid dearly and have zero regrets.  However if I put on my analytical engineers hat it is hard to ignore 5 years of my wife’s income, 50k saved away in a college fund, a 50% increase in groceries, at least a 50% increase in clothes costs, and so on.

There are also a lot of knock on effects from all the effort a kid takes.  Home maintenance fell behind, hobbies languished, stress over school issues increased, and spare time is almost always driven by being kid friendly or kid focused.  My wife and I often take separate breaks to be able to do non-kid focused trips (girls only beach trips, solo bike tour trips, etc).  The changes kids bring are for sure a proximate cause of many divorces.

We embrace the life changes for the most part, but it can be hard when you stop and think of the “life not lived”.  On the other hand I have an amazing 9yo I love the heck out of and I am overall very happy to have be part of my life.

Car Jack

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #55 on: March 28, 2022, 09:21:58 AM »
Both my kids are over 18.  The big costs start near or after 18.  I learned a ton over the years.  Some random thoughts.

Our town's schools held "College Financial Planning" seminars.  I first started attending very early, when my older son was 8.  We saved a lot to pay for any college, with a marketable major for both.  How much did we save for college?  $1M.  How much was spent?  Not yet complete, but close.  Older son $300k and he has a great job as a structural engineer and makes good money.  Son #2 was not a college fit.  Crashed and burned through 1 year of community college.  He's now in a welding course that was only $16,400.

Private schools:  Our town has a middle school commonly called "the Black Hole".  Elementary and high had better reputation.  Older son went to private religious school for 3 years.  Guess what?  Private schools are not universally better than public.  He entered high school grade 9.  At that point, he could type 120 words per minute, had great writing skills and his math was a year behind, even though it is his strong suit because the private school didn't believe in higher level math.  Younger son went to public middle and he honestly would have been better in that private.

Learning problems:  Younger son had learning issues.  Town IEP committee concluded that indeed, he needed an outside school that could specialize in his needs.  Public school head of department changed.  Next meeting, they all denied saying he was appropriate for outside school and proposed internal program meant for head injury students (football, mainly).  Lawyer costs ensued and after 2 years, settlement covered transport for about half a year going forward and money in the next fiscal year.  NDA prevents more info.  I'll just say that you can't know ahead of time if your kid will have a learning disability.

Boys and car costs:  Expect when your boys get their license, insurance will more than triple.  Then they'll total a car, so perhaps limit them to a cheap car.  Both our sons managed to do this.

Yes, our kids did T ball and soccer and lacrosse and karate and music lessons and day care and sorry....they're all bush league costs.  If you look at day care costs and think they're high, don't have kids.  My wife left work after the second one and that cost us tons of money.  Ended up putting both kids in part time pre-school.  Initially, I thought with her commute being about 12k miles a year that we'd save a ton on car costs.  Wrong.  She drove 18k miles a year.  Where?  All back and fourth, back and fourth.  Going back to work (nurse) took 5 years of entry level jobs and wages because hospitals won't even interview a nurse besides a recent grad if they don't have at least a year of recent clinical experience.  So stay at home can mean going to zero wage and then going to entry level again.  And yes, she had to do the new nurse thing with night shifts, weekends and every other major holiday. 

Kids are not babies forever, which is what a lot of couples assume.  They will hate you when they're teenagers.  They'll be morons in their teens.  You will be used to police coming to the house, sometimes because you called them. 

Captain FIRE

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #56 on: March 28, 2022, 06:24:53 PM »
Both my kids are over 18.  The big costs start near or after 18.  I learned a ton over the years.  Some random thoughts.

Our town's schools held "College Financial Planning" seminars.  I first started attending very early, when my older son was 8.  We saved a lot to pay for any college, with a marketable major for both.  How much did we save for college?  $1M.  How much was spent?  Not yet complete, but close.  Older son $300k and he has a great job as a structural engineer and makes good money.  Son #2 was not a college fit.  Crashed and burned through 1 year of community college.  He's now in a welding course that was only $16,400.

I do not understand this math.  You saved $1m, spent close to that...but college for one was $300k.  The other did one year of community college (cheap) and now a welding course for $16500.  So...at most that seems $350k, not $1m?

MoseyingAlong

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Re: What's the Financial Cost of a Child? Ages 0-18 years
« Reply #57 on: March 28, 2022, 11:57:57 PM »
Both my kids are over 18.  The big costs start near or after 18.  I learned a ton over the years.  Some random thoughts.

Our town's schools held "College Financial Planning" seminars.  I first started attending very early, when my older son was 8.  We saved a lot to pay for any college, with a marketable major for both.  How much did we save for college?  $1M.  How much was spent?  Not yet complete, but close.  Older son $300k and he has a great job as a structural engineer and makes good money.  Son #2 was not a college fit.  Crashed and burned through 1 year of community college.  He's now in a welding course that was only $16,400.

I do not understand this math.  You saved $1m, spent close to that...but college for one was $300k.  The other did one year of community college (cheap) and now a welding course for $16500.  So...at most that seems $350k, not $1m?

I interpreted @Car Jack to mean that they saved about $1M due to their earlier research and have only spent ~$350K so far and are almost done.
I.e. some would say they oversaved but they didn't know #2 would not need the full ride.