We are often asked by clients to help estimate the expected costs of starting a family or having another child. Although there are many factors that go into a family’s actual spending, we turn to USDA Expenditures on Children by Families Report to provide a baseline cost estimate for our clients.
Since 1960, the USDA has taken data from the Consumer Expenditure Survey and updated these figures using the most recent Consumer Price Index. They have recently published their 2013 results which are detailed below.
Costs vary greatly considering household income level, geographical location, and whether a household has two parents or one. The national average cost is $245k and reflects a two person household with a median income of $83k annually. For comparisons sake, projected cost estimates for a high income, two parent household earning greater than $107k annually in the urban Northeast are much higher at $455k.
Although these figures may leave you with sticker shock, it is important to note that these cost estimates still do not include any higher education expenses or support beyond age 17. According to the College Board, the average cost of tuition and fees for the 2013–2014 school year was $30,094 at private colleges, $8,893 for state residents at public colleges, and $22,203 for out-of-state residents attending public colleges.
Housing expenses consist of shelter (mortgage payments, property taxes, or rent; maintenance and repairs; and insurance), utilities (gas, electricity, fuel, cell/telephone, and water), and house furnishings and equipment (furniture, floor coverings, major appliances, and small appliances).
Food expenses consist of food and nonalcoholic beverages purchased at grocery, convenience, and specialty stores; dining at restaurants; and household expenditures on school meals.
Transportation expenses consist of the monthly payments on vehicle loans, down payments, gasoline and motor oil, maintenance and repairs, insurance, and public transportation (including airline fares).
Clothing expenses consist of children’s apparel such as diapers, shirts, pants, dresses, and suits; footwear; and clothing services such as dry cleaning, alterations, and repair.
Health care expenses consist of medical and dental services not covered by insurance, prescription drugs and medical supplies not covered by insurance, and health insurance premiums not paid by an employer or other organization. Medical services include those related to physical and mental health.
Child care and education expenses consist of day care tuition and supplies; baby-sitting; and elementary and high school tuition, books, fees, and supplies. Books, fees, and supplies may be for private or public schools.
Miscellaneous expenses consist of personal care items (haircuts, toothbrushes, etc.), entertainment (portable media players, sports equipment, televisions, computers, etc.), and reading materials (non-school books, magazines, etc.).
View the full report at: http://www.cnpp.usda.gov/sites/default/files/expenditures_on_children_by_families/crc2013.pdf.