You may have heard the recent report that raising a kid costs a fortune. To be more specific, the government estimates that it costs $300,000 over the first 17 years to raise a child. Gulp.
But don’t worry, it gets worse. Add in the cost parents spend on children after age 17 and the income parents forgo during the child rearing years and the cost inches up to a mere $900,000!
The number comes from an article by Carl Bialik of the WSJ. The number includes the cost of college and the lost opportunity cost for not investing the college tuition.
Now at this point you may be saying it’s impossible to spend $900,000 on little Johnny because you won’t make that much during his first 20 years or so (at least not after taxes). Not to fear. The United States Department of Agriculture has developed a calculator to help you estimate the cost of raising your little darlings. You can check it out here.
The USDA also keeps copies of its past estimates on raising children. The oldest report I could find online dates back to 1995. As with its current report, it provides three cost estimates based on family income (see graph above).
In 1995 the middle income group spent $145,320 to raise a child, adjusted for inflation. In the last 17 years the cost has doubled. We can all thank inflation for that increase.