Cost of Raising a Child

According to this CNBC article , the government estimates it will cost $291, 570 to raise a child born in 2008 to age 18, which does not include the cost of college or childbirth. On average, the cost is $16,200 per year or about $44 per day. That sounds pretty high to me, especially during the child's younger years.

I suspect that the total reported amount is not the incremental cost of raising a child, but rather a combination of fixed cost allocation (e.g. housing costs) and incremental variable cost (e.g. daycare, clothing and food). For us, we'd live in the same house, whether we had children or not. So, I wouldn't assign any housing cost to our child. Also, since we're retired, we only have pre-school costs, which are much lower than full day child care costs. Thus, I would expect our child rearing costs to be much lower than the reported average in the article.

Finally, as I previously posted, our total household expenses have only been slightly higher after having our daughter because we had become more frugal and were choosing to spend less in other areas. In addition, we also qualify for a $3500 exemption and the $1000 child credit on our tax return. Thus, for us, the incremental cost of raising our daughter is about the same as our monthly expenses prior to having a child.

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This is not financial or parenting advice. Please consult a professional advisor.

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