I wish all you needed was unconditional love for your new little bundle of joy, but in the real world you also need a large wad of cash. Parents-to-be need to take a break from picking out the frilly dresses and blue overalls and figure out how much that cherubic little tike is going to cost them. Without at least a little financial consideration, parents may discover that the pitter-patter of little feet is running off with their wallets.
Take Nadya Suleman, the mother of octuplets who has been splashed all over the news. Nadya has 14 children in all, with 10 of them under the age of 2. The Today show called me in as a financial expert to do some calculations to get an idea about how much each child will cost to raise from age 0-18. The results were staggering and sent my knees quivering.
According to the U.S. Department of Agriculture's 2007 report "Expenditures on Children by Families," the cost of raising a child from birth to age 17 increased by approximately 3.2 percent from 2006 to 2007. Housing costs accounted for 33 to 37 percent of total expenses, while food was the second most expensive category, at 14 to 19 percent of the total amount.
So what should you expect to pay for housing, food, transportation, clothing, health care, childcare and all those cute frilly miscellaneous items? It depends on your income.
If you earn less than $44,500 the total cost for raising a child from age 0-18 is a mere $143,790. But hang onto your hats. The more you make the more expensive it gets. For a family pulling in between $44,500-$74,900 a year the price tag on a little one is $197,700. However, if you are savvy enough to have more than $74,900 coming in each year, the nut for raising a child until they are age 18 is a whopping $289,380. Note that these figured do not include the cost of private school or any college.
So back to Nadya Suleman. How much should she expect to pay to raise her 14 children? Nadya will need roughly $ 82,282 a year or $1,550,056 in total until they are age 18. This assumes normal medical costs. In reality, the medical costs for her kids will be anything but normal. Those kids, with their fragile beginning, are likely to need quite a bit of ongoing medical attention. Nadya might better of thought about the costs before as her $470 weekly paycheck falls far short of paying for the kids ... let alone herself.
It isn't that children aren't worth the expense; it's that parents need to understand and plan for the financial impact of having a child. If parents-to-be take the time to make a financial plan when expecting a baby, it's less likely to come as a shock and more likely to help them enjoy being a parent.