Today, roughly one in five women in the United States do not have children. For the first time in U.S. history there may soon be more elderly people than children.
Based on trends in costs, it’s evident why many families are choosing to have fewer children – or in some cases, no children at all. The cost of having children in the US has grown exponentially since the 1960s, when the government first started collecting data on childhood expenditures. Between 2000 and 2010, the cost shot up by 40%.
As of 2015, American parents spend, on average, US $233,610 on child costs from birth until the age of 17, not including college. This number covers everything from housing and food to childcare and transportation costs. As a someone who has recently has two very young children, I can tell you firsthand about the unexpected and ongoing costs associated with having a child.
This spike costs has broad implications, affecting everything from demographic trends and human capital to family consumption.
Moral of the story…
Create a cash reserve! I can’t stress this enough. Building a cash reserve while you’re planning for a family is hugely important. Before overspending on a new nursery, read on to appropriately set expectations for costs related to having a child. Once you feel comfortable that your reserve will cover the initial costs, such as out-of-pocket expenses on your health insurance, review whether current spending levels need to be adjusted for the ongoing expenses of raising a child.
Find out how much you should have in cash reserve, why it’s so important, and where to keep it.
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Baby bust: 4 charts show how expensive it is to have kids in the US today
Labor and delivery
The overall costs of labor and delivery vary from state to state and personal preference. Expenses for a delivery can range from $3,000 to upwards of $37,000 per child for a normal vaginal delivery and from $8,000 to $70,000 if a C-section or special care is needed. These costs are often a result of separate fees charged for each individual treatment. Other factors affecting price include hospital ownership, market competitiveness and geographical location. You may also choose hiring additional professionals, such as a doula or specialized birthing center. Lastly, it’s important to remember the cost of pregnancy itself. At a minimum expenses related pregnancy includes periodic office visits, blood work, urine samples, ultra-sounds, gestational diabetes testing, vitamins, child safety and breathing courses.
The US Department of Health and Human Services deems childcare affordable if no more than 10% of a family’s income is used for that purpose. However, parents currently spend 9 to 22% of their total annual income on care for each child. In North Andover and surrounding areas I’ve seen infant daycare costing $250-500/week. The largest factor for pricing is whether the facility is run by an individual or corporate provider. That means a family’s income would have to be between $130,000 – $260,000/year to be at the 10% threshold. Now imagine having two children at daycare or having to pay additional coverage expenses for when the child is sick.
Gone are the days where having more children meant having more hands on deck to help with the family business, farm, or general household chores. Americans pride themselves on nurturing and protecting their children. We do this best by enrolling kids in activities… many many activities. In fact, Americans families will spend on average $500 to $1,000 per season on extracurricular or sports activities for each of their children.
Free time and kids
Another hidden cost associated with having a child is that of time. In my experience, many parents do not realize how much time they will invest in their children, often at the cost of personal freedom and work expectations. I thought my first maternity leave would be fun times spent around the pool getting to know my new baby. I was wrong.
In fact, the American Time Use Survey shows that, on average, parents with children under the age of 18 spend about 1.5 hours per day on domestic and childcare responsibilities. Women spend 2.5 hours a day, while men spend roughly 1 hour on these tasks. Similar results have been found when comparing the amount of time men and women spend on caring for an aging parent.
Average hours per day parenting
American parents with children under the age of 18 spend about 1.5 hours per day on domestic and childcare responsibilities.
- Physical care for household children
- Reading to and with household children
- Playing with household children, not sports
- Activities related to household children’s education
Researchers have also found a growing trend of men and women who become single parents by choice. This group of parents prioritize children over marriage and often are on single incomes. That also contributes to the reduction in overall childbirth, from a financial and practical perspective.
Ultimately, the decision to have a child is a personal one. The data shows that the burden of costs and the stress of family life are real. Yet, despite the costs associated with having a child, many parents report overall satisfaction with their marriage and family life.
Considering the high costs of having of a child, coupled with the tension in balancing family-work life matters, states and companies are starting to invest in family support policies, parental benefits and competitive education. And individuals are creating more innovative approaches to managing family-work balance, such as a reduction in working schedules, family support and a push for more shared responsibilities within the home.
About the Author
Quentara Costa helps the sandwich generation prioritize kids, self, and aging parents. For years Quentara was the primary caregiver for her father who was diagnosed with Alzheimers at the age of 70. Since his passing she’s become a mother of two sweet girls. Professionally she received a master’s degree in Personal Financial Planning from Bentley University and has held the CFP® designation since 2010. Community involvement includes hosting the Merrimack Valley Senior and Caregiver Group and volunteering for Budget Buddies.Schedule A Free Consultation