Anonymous wrote:NP here. We are a fairly frugal family but kids DO cost a lot of money, regardless. In order to figure out the real costs, think about what you would spend without kids even for basic costs - a smaller home, less healthcare, less food, less clothing, no childcare or no need for a flexible job, less travel costs, no saving for college, no activities (even cheap ones) versus what it is with kids.
Having a first child means:
-an extra bedroom (3 bedroom home versus 2 or 2 bedroom apt. versus 1). Cost difference - $300-$500 per month
-extra healthcare for "family plan" ~$200 per month
-food at a minimum of $100 per month
-clothing even at thrift stores - $20 per month
-childcare - cheapest ~$800-$1000 per month for ~6 years and $300 in aftercare for ~6 years, so say average $300 per year for 18 years
-travel - requires larger hotel room, more tickets for activities, possible extra airfare costs. For a one-week vacation per year, I'd say a minimum of $400 extra ($30-$50 per month)
-activities - even doing basic ones like scouts ($200 per year), group music lessons ($300 per year), parks and rec. gymnastics($300 per year), and recreational soccer ($300 per year), assume $100 per month per kid.
So we're talking $1800-$2000 per month, and that's fairly basic costs.
Sure you might get lucky in one area - like you never fly for vacations or you have a grandma who watches your kid for free or you work for a great company that provides free healthcare for all, but those are fairly basic costs. You can adjust for your own situation. These costs do NOT include braces, travel teams, birthday parties, gifts for kids at Christmas or birthdays, saving for college, expensive activities, extra co-pays, any special needs that might arise, etc.
As to the $95K poster from DC. I think you are overlooking a lot of things. You said you didn't move when you had kids, but that means you must have bought (or rented) a big enough place in anticipation of having kids. If you had planned on only being the two of you the rest of your lives, you would not need the same space as 4 of you. If you adjusted your lifestyle because of the two kids, then you gave up something (and that opportunity cost - home office, guest room, whatever is a cost of having a kid that you overlooked).
Same is true for your flexible job. Taking a flexible job so you can work around childcare is a cost. Having your husband not get his higher income job for a few more years is an opportunity cost. Not saying it's wrong, but it IS a cost of having kids.
Switching from a higher-level healthcare plan to an HMO is a cost. Even if you like it better.
Conveniently not figuring out the cost of feeding your kids, the extra calories you need to breastfeed, the cost of cloth diapers (I did that, too), the cost of thrift store clothes (I do that too), parks and rec. classes (I do that too) does not help your cause. Sit down and write up EVERYTHING your kids cost you including the opportunity costs, and you will find that they are costing you more than you are presenting here. And, no most people do not have jobs they can work around to cover full-time childcare.
OP, one financial positive that I don't think I saw mentioned is the tax breaks that children provide (there is the extra exemptions and a childcare credit that you can take, which would lower the minimum costs I outlined above). I also agree with a PP that you should not count on grandparents for childcare, even if they say they will do so. Staying home with a baby all day is hard work and is often too much for grandparents.
You're referring to me. I bought my house when I was single. My mortgage payment, once you took into account the itemized deductions the mortgage interest added, was less than my rent had been for the previous several years for one bedroom apartment in a different part of the city. I bought a 3 bedroom house. It's not big, but big enough even now that four of us live there. I did not buy it in anticipation at having kids, I actually figured I'd likely move before having kids, but the neighborhood changed and I worked on the house and it's a great place to live and we've decided to stay because having a short commute (more time) and low costs are more important to our family than a large house. What you are missing there is that even if I had bought a larger house in anticipation of having kids, it's only the (marginal) additional interest that is actually a "cost". The rest of the mortgage payment typically builds equity -- something that increases net worth and becomes cash if you sell.
Nowhere did I say that kids were free, or that they didn't cost anything. Of course there are extra costs involved. But they do not have to be extortionate, (and some of the costs outlined by others in the early pages of this thread are just crazy).
The cost of "extra calories while breastfeeding" is utterly negligible and fairly ridiculous to even consider (unless those extra 300-500 calories are always lobster or steak - we are vegetarian and eat very inexpensively). Do I have to consider the extra water I consumed too? I mainly drank filtered tap water, but not at significant enough levels to increase my water bill. The cost of cloth diapers was about $100 for less than 2 years use x two kids. Of course, there's also the cost of washing them but we have a high efficiency washer and typically line dried. I didn't see a quantifiable increase in my water or electricity bill when I was laundering diapers. Food for my kids isn't expensive either, but sure, it adds to the grocery bill. They take lunch to school, for example, and I worked out that I typically spend $1-2, or less, for their lunches each day.
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