Calculator offers analysis of cost of raising a child
How much does it cost to raise a child?
The recently updated U.S. Department of Agriculture’s Cost of Raising a Child Calculator gives families the most recent analysis on what exactly it costs to raise Junior in 2014.
Current and prospective parents may find the numbers scary. Average annual child-rearing expense estimates in the report ranged from $12,800 to $14,970 for a child in a two-child, married-couple family making less than $61,680 per year. Husband-wife families in Pennsylvania in this income range can expect to spend $212,430 to raise a single child through age 17.
“I guess what surprises (people) is just how much it costs to have a child,” said Mark Lino, author of the study that the report is based on. “Children have many benefits but they are very costly.”
They can be especially costly in Fayette County, where the average annual household income is $38,108, which is well below the state average of $52,267 according to the Pennsylvania Department of Labor and Industry. The USDA calculator allows prospective and current parents to compute the cost of raising a child by entering the age of their children and the total number of children they have (up to six total). They can also select their income group, the region of the country where they reside and whether they have a single- or two-parent household. The report is based on what parents report spending on their children.
But just how useful is the calculator for local parents?
“It didn’t seem that useful,” said Elaine Barry, associate professor of human development and family studies at Penn State Fayette, The Eberly Campus. “I don’t know how a family would use that. What do you do with these numbers? Do you say, if I send my kids to grandma’s for three months, can I divide by 12, multiply by three and save that much?”
The calculator estimates that any two-parent family in Pennsylvania with an annual income under $61,680 have only approximately $563 per year to spend on their children after accounting for housing, food, transportation, clothing, health care and education costs. This $563 is allocated into a category of its own and would have to cover all recreational activities for a child in a given year, including sports and art supplies, tickets to amusement parks or museums.
Barry, a parent of five, thinks this “miscellaneous” category allocation isn’t significantly low for this area.
“In my experience with parents in Fayette County, there’s an awful lot of people who have never been to Pittsburgh,” Barry said. “It’s just not on their radar. That’s too far. Parents in Fayette County tend to stay in Fayette County. With the struggles I’ve seen families in the county are dealing with financially, that figure is closer to being accurate than we might like.”
Matt Becker, founder of the family financial planning website MomAndDadMoney.com, says that financial calculators similar to the USDA’s can be useful for parents preparing for their first child. He used a BabyCenter.com calculator to determine the costs of his first child, but he says that calculators become less relevant after couples become parents and especially after they have multiple children.
“Looking at those numbers, they’re intended to be helpful as a benchmark,” Becker said. “But in a lot of cases, they really aren’t all that relevant to your specific situation.”
Becker advises couples to look for “big wins” in their budget, one-time efforts to produce savings on a monthly basis such as negotiating a cable bill or finding a lower-cost cell phone plan.
It isn’t easy raising a child, and Lino’s study is the latest proof that isn’t cheap either. But it can be worth it for parents whose preparation for their children matches their love for them.
“I don’t want it to seem so gloomy,” Lino said of his report. “People ask, well why would people have children? Because the benefits outweigh the costs.” And since the costs vary greatly from household to household, Barry and Becker both suggest that parents rely only so much on a calculator in planning the future of their family.
“Focus on your own financial situation, not a calculator,” Becker said. “Run your own numbers. Track your spending. See where your money is going, and from there you can make personal decisions about what you can change to make your life a little bit easier.”
Link to calculator: http://www.cnpp.usda.gov/tools/CRC_Calculator/default.aspx