When Are Kids The Most Expensive? The Answer May Surprise You – Guest Post

My husband and I are putting together the family budget for 2014. For the first time this year, we’ll have both of our kids in public school — our littlest one will start all-day kindergarten this fall. Although some people don’t like the idea of kindergarten lasting all day–instead of the “half-day” kindergarten we all grew up with–I, for one, am thrilled. Because we’ve got all-day K, we are going to save nearly $20,000 next year on daycare costs.

As we were putting together our budget, thinking about what we could do with that extra money, I got a little curious. When are kids the most expensive? Is it when they’re babies, and need all that neonatal care and doctors’ visits? Or when they’re toddlers and go to daycare and preschool everyday? What about teenagers, who need cars, SAT prep, and expensive academic camps? Or even afterwards, when kids go to college?

Well, I ran some numbers and did some research, and this is what I found:

1. The total cost of raising children is pretty consistent, except for one factor

To quote Forbes: “Children Today Not Much More Expensive Than 1960: Up To A Point.” The point, of course, is college. Otherwise, the costs of having children have stayed relatively consistent, or at least kept pace with inflation. 

There are a few factors that will affect whether your total child cost is higher or lower than the national average:

• Health care: if you’ve got good insurance and a healthy child, you’re in good shape. If not, this is where the majority of your money will go.
• Private schools: if you choose to put your children into private schools, you’re looking at an additional $50,000+ a year on top of the other costs. 
• Geography: According to Time Magazine, families who live in rural areas spend less money raising children than families in urban areas, particularly the urban Northeast. (I don’t think any of us really needed Time Magazine to tell us that.)

2. Even without college, parents still spend the most money when their children are adolescents

I was a little shocked to uncover this statistic. Shouldn’t teenagers be pretty much self-funding? I remember getting a summer job to pay for my Guess jeans and movie tickets, after all.

As it turns out, however, teenagers still cost more than younger children, even when you take $20,000 daycares into account. To quote The Nest: “Smaller children have higher expenses for clothing (such as diapers) and child care, while old children have higher food and transportation costs.”

In addition to the stereotype of the teenager who eats all the food in the refrigerator and is still hungry, there are a few additional factors that come into play here. Fewer teenagers are getting after-school jobs, first because their parents want them to spend time on academics, and second because these jobs are no longer available. Adolescence is also when parents ramp up spending on test prep, tutoring, orchestra camp, and other activities — every penny spent there turns into savings in the form of college scholarships. 

And, of course, there are those all-important cars: teaching teenagers to drive is an important life skill, but car payments and insurance are not cheap. Thankfully, auto insurance companies are working to offer competitive prices to teens, in the hopes of getting more of them on the road safely. 

I was astonished to learn that as much as my husband and I were spending now on our kids, we still needed to plan to spend more on our kids as they grew older. So, after I did the research, I told my husband we couldn’t spend the day care money on a huge vacation or backyard pool. We needed to save it for when our kids were teenagers. I hope they’ll thank us someday.

*image source: Via Flickr: 401(K) 2012 under CC BY-SA 2.0