Is Starting a Family Financially Feasible?

by Hank Coleman

Can You Afford The Cost Of Starting a Family?Is the cost of starting a family financially feasible? Should the cost of starting a family even factor into your family planning and decisions?

Do you have a spare $245,340 lying around? Probably not, and you don’t need it all upfront, but this is the new estimated cost of raising a child from birth until 18 years of age in the United States, according to the U.S. Department of Agriculture.

When accounting for inflation for the next 18 years, it will eventually cost about $304,480 for the average American family to raise just one child. This figure includes birthing costs, education, food, housing, and some activities, but it doesn’t include college costs, which are estimated to be $18,390 for a bachelor’s degree at a public university later on.

These costs vary depending on which area of the country you live in, what your family income is, and how frugal your lifestyle is, but in most cases, you can expect to pay a minimum of $11,000 per year for your child’s first 18 years of life.

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Can You Afford The Cost Of Starting a Family Of Your Own?

If you’re thinking of starting a family or want to add another child to your growing nest, it’s important to look at the financial implications as well as the emotional ones. As the Pew Research Center points out, finances are a major concern for parents in America and the affordability factor strongly influences people’s decisions to have kids. Millions of babies are born each year, so it’s not an impossible dream, but this baby-readiness guide will help you determine whether it’s financial feasible to add a child to your family.

Pregnancy & Delivery or Adoption

Pregnancy and delivery fees vary widely, depending on your insurance coverage, possible complications, and whether a C-section is required for the birth. If you have excellent health insurance or qualify for Medicaid, your prenatal care and delivery expenses will be minimal, but folks without insurance can expect to pay between $30,000 and $50,000. The choice of hospital plays a role in your delivery costs as well, according to a study from the University of California at San Francisco.

If you seek out in-vitro fertilization options not covered by insurance, you’ll generally pay between $12,000-$15,000 for IVF treatments. Cost-effective IVF clinics may not have the highest success rates, so you should prioritize quality of reproductive care services over cost effectiveness in this instance.

If you want to wait to have children and freeze the mom’s eggs in the meantime, the Huffington Post reports that “cost of medication and treatment for one cycle is roughly $10,000-12,000 and storing eggs will cost $800 per year.”

Looking to adopt instead? AdoptionHelp.org points out that adoption costs can range from $0 to $50,000, depending on where you adopt (local adoption program, domestic private industry, international adoption agency, etc.). Adoption fees include a number of services, such as social worker assistance to help the child integrate more successfully into your home.

Childcare Costs

According to Care.com, the average American family spends $18,000 per year on childcare. You have many options when it comes to childcare, whether it’s asking the grandparents to help care for the little ones, hiring a family day care provider, having a live-in au pair or nanny, or relying upon a licensed day care center.

An Au Pair is when you hire a nanny from a foreign country – many come from Europe, for example – and they care for your children in exchange for room, board, and a small monetary allowance. Care.com reports that au pair childcare is one of the more affordable options at an average cost of $360 per week, but this requires having enough space and resources to allow an extra person to live in your home.

Family daycare providers are the second most affordable option at an average of $140 per day. This option involves a provider coming to your home each day to care for your kids while you’re at work.

A stay-at-home parent is viable alternative to paying for expensive childcare. Either you live on a single income earned by the working parent, or at one parent telecommutes for their regular job. Telecommuting is increasingly popular nowadays and can help you maintain your dual family income without doling out $18,000 a year for someone else to care for your children.

Food and Clothing

Feeding a child can cost between $125 and $280 per month, depending on their age and how much your family generally spends on food. There are plenty of ways to save money on groceries, such as using more coupons while you shop, buying generic brands, and relying on affordable frozen meat and produce instead of pricy fresh varieties. Nevertheless, food inflation is on the rise, and your budget needs to constantly adjust to the dietary needs of growing children.

Clothing for kids is a more flexible expense thanks to the proliferation of super cheap kids’ clothing websites and stores out there today. Hand-me-downs are also cost-effective solutions for growing kids’ wardrobes, but you shouldn’t skimp on good pairs of shoes or a sturdy backpack for school, either.

Health Care

According to a study from the Health Care Cost Institute reported by NBC News, health care costs for children are growing faster than the general population’s costs. Like the pregnancy and delivery category, these costs will vary widely depending on your health insurance coverage, any conditions or disabilities your child might have, and which hospital or health clinic you go to.

Low-income families could qualify for the Children’s Health Insurance Program (CHIP), which covers an array of services such as check-ups, immunizations, prescriptions, emergency services, and more.

Middle-income families who do not qualify for Medicaid or CHIP and do not have private or employer-provided health insurance could look into child-only health insurance coverage to cut back on any unexpected health care expenses that could crop up during your child’s tumbles and falls on the way to adulthood. If you do have insurance but it comes with a high deductible, then you could qualify for a tax-friendly Health Savings Account to cover your family’s medical expenses.

Education and Activities

Parenting is full of “maybes.” Maybe your child will struggle in math later and you’ll need to hire a tutor. Maybe your child will be a high school football star and need hundreds of dollars to remain competitive in the football program.

If your child is yet to be born, then you have no idea what they’ll be interested in when they’re in middle school or high school. The only guarantee is that there will be additional educational expenses – especially if you send them to a private school. And, they will have hobbies and activities that could cost you as little as a couple hundred dollars a year or as much as $1,000+ per month.

As a parent, you’ll have more control over the sports and hobbies your kids participate in, and these extracurricular activities are important for learning lifelong skills and making friends as they grow up. However, they are also another expense category that you must take into consideration before starting or adding to your family, so keep this in mind.

Miscellaneous Expenses

Need to feed your baby formula? That costs between $70-100 per month. Diapers? About $40-80 per month for the disposable variety. Books? Video games? Bedroom furniture?

All of these are unavoidable expenses that come with raising a child from infancy to adulthood. What you spend money on may change as they get older, but the how much side of the equation generally won’t decrease unless your child gets a job to bankroll their hobby in their teens.

Alternative Family Choices

If having children or even one child does not seem like a financially feasible option for the foreseeable future, there are alternative family choices out there. It’s widely known that Millennials are deciding not to have kids at all in order to focus on their careers and avoid bringing a child they cannot afford into the world.

Other couples that truly want children sometimes choose to adopt older children and give loving homes to foster children without incurring the years and years of expenses it takes to raise a child from infancy.

Although getting married and having kids has always been the norm, this tradition has become less mandatory after the Great Recession of 2008. History shows time and time again that birth declines and explosions (Baby Boomers, anyone?) align with economic conditions, and if having a child isn’t feasible for you right now, you at least have the options to wait to have kids or remain child-free.

Is the cost of starting a family financially feasible? Should the cost of starting a family even factor in your planning?

Can you afford the cost of starting a family?

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 590 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 1 comment… read it below or add one }

Janeen

I think the wise answer to both of your questions is “yes” (but with one large caveat). As to whether or not it’s feasible, you’ve mentioned many alternatives that lower the cost. As a stay-at-home mom and teacher to 5 (soon to be 6!) children, I’ve found that real-world spending is different than the sanitized dept. of Ag results. I’d add too, that becoming a parent provides an element of clarity and hyperfocus, especially when it comes to finances. Should potential parents consider cost when starting a family? Yes, it’s wise to consider all sides of the issue, but in our American culture, there’s a bit of confusion about “rich” vs “poor”. Reading this on a computer screen? Then you’re rich, my friend, and money isn’t a factor in whether or not you should have children. There might be other issues (even financial issues, such as being willing to accept loads of debt), but money can’t be blamed as a reason for not starting a family.

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