Having kids can be a a huge joy in life, but it is also a huge financial obligation. There are so many different costs involved in raising a child, from the added basics like food, to the costs of education, and more.
The USDA has calculated the costs of raising a child for both single parent households and dual parent households, and it can cost anywhere from $118,590 to $250,262 to raise a child to 18 years of age. And then you get to college!
So, how safe will your finances be when you have kids?
The Costs of Children
There are so many different costs involved in raising children, but beyond the basics, some of the biggest costs include day care and then education. When deciding on whether to get day care or to watch the children yourself, there is a big trade off to consider. Sometimes it may not be beneficial to get day care, while other times it could be a necessity. You can read the trade-off here: Are Two Wage Earners Better Than One?
After child care, there are the cost of education, including college if you’re going to pay for it.
Tricks to Get Prepared
There are a ton of different tips and tricks to get prepared for children and the costs involved. One of the most popular tricks is to budget on one income and saving the difference. This savings can turn into a great emergency fund, and then when children are present, allows for the extra expenses in the budget.
Another popular trick is to ask friends and neighbors about their costs when it comes to raising children. Ask a good friend where they find child care and how much it costs. Ask about what it costs for medical care for their children, and maybe what doctors or health plans they use. By asking around, you can get a good glimpse of what it will cost.
Readers, what other hacks do you have to protect your finances from your children?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.