Friday, June 15, 2012

Child Raising Expense, Including Education

There's a new report out about the cost of raising a child, and it's reviewed in Cost to Raise a Child: Around $300,000, Not Including College:

"Middle-income parents who welcomed a new child last year can expect to spend nearly $300,000 over the next 17 years, according to a new report.
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The U.S. Department of Agriculture prepares an annual report about families’ expenditures on children for use in developing state child-support and foster-care guidelines. Annual child-rearing expense estimates ranged between $12,290 and $14,320 for a child in a two-child, married-couple family in the middle-income group, which is defined as a before-tax income between $59,410 and $102,870.

The amount spent on a child by families in the highest income group, on average, was more than twice the amount spent by families in the lowest income group. A child born last year to someone in the lowest income group would cost $212,370 over 17 years, compared to $490,830 for highest earners.

The biggest share of the expense in raising a child, according to the report, is housing at 30%, followed by child-care and education at 18%, food at 16%, transportation at 14% and health care at 8%.

The report has been compiled since 1960, when adjusted for inflation, a middle-income two parent household would have spent around $192,000 over 17 years in 2011 dollars to raise a child. The biggest change over 50 years is the share of expenses going to child-care and education, which was just 2% in 1960.

On a regional basis, it cost the most to raise a child in the urban northeast of the U.S. and least in rural areas of the country.

If you’re already balking at the quarter-million dollar price tag, consider this: the report stops at age 17. Parents who send their children to college can add a significant sum to the total. The report notes estimate by the College Board that in 2011-2012, annual average tuition and fees were $28,500 at 4-year private (non-profit) colleges, while annual room and board was $10,089."

Summing Up

Raising a child is a huge and important responsibility. It's an expensive proposition as well. Accordingly, we should insist that government services, including schools, provide first class learning opportunities for all American children.

The two things that stand out in the report are the increase from 2% to 18% for child-care and education costs since 1960, and the fact that the cost of attending college is excluded.

The single largest reason for the increased costs are child-care related expenses due to the higher percentage of mothers that work today compared to 1960. {In both cases, costs for public schools, subsidized lunches and so forth are excluded from the reported costs.}

It would seem to me that We the People should pay a great deal more attention to how good of an education our children are receiving through age 17, in order that they will be well prepared to perform well at the college level or whatever else they elect to do in adulthood.

In that regard, many of our already too  expensive K-12 public schools need to be improved radically. (Please see today's post about hiring more teachers in "Successful" Politicians Don't Lead ... They Pander ....")

We'll deal with the high cost of college in the next post.

Thanks. Bob.

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