The Real Cost Of Raising A Child
Choosing to have kids or not is a pretty big topic for millennials right now.
When we considered starting a family, we ofcourse thought about the costs but decided to go ahead anyway.
I have friends who have chosen not to go down this path at all, and money is top of the list for why not to have kids.
This makes me wonder if our parents had a similar consideration about whether to bother with kids.
And had my parents chosen not to bother, I often wonder how things might have turned out.
Unlike my fellow millennials, I've kinda moved past the stage of considering whether I should have kids or not.
At the age of 30, I became a dad for the first time and we since followed that with another son and then stopped.
If my parents could have their way, we'd be on our third right now!
Rest assured, I'm fighting the resistance with the cost of having kids right at the top of my reasons to say NO (for now at least).
To be frank, I think it's a real shame that many of my generation feel pretty stuck and many are deciding not to have kids because of the cost of raising them.
Interestingly, I've come across those who can have kids but have either ruled it out or sitting on the fence.
Then there are those that would absolutely love to have kids but sadly can't for one reason or another.
Then there are those with 1 or 2 kids and who are considering whether they should have another or not due to broodiness or pressure from loved ones.
Whatever your circumstances are, chances are this is a topic that has either crossed your mind or remains a subject of discussion.
This post is part 1 of 2 and is followed by The Real Joy Of Raising A Child.
It might surprise you to know that although I've overall enjoyed my journey of fatherhood so far, I've aged too in a short period of time.
I can't remember much of life before that blessed Mother's day when our first son arrived.
I'll be focusing on the day to day realities of parenthood on the next post.
For now, though, I'd like to explore the real cost of raising a child.
Typically when people talk about costs, they think of money only.
They also only think of the more obvious costs, and completely ignore what I'd like to call the ‘Additional costs of excitement or stupidity' aka incidental costs of our choices.
An example of this is the need to move to say, a 4 bed home from a 2 bed flat as a result of deciding to have children.
We actually bought the house and moved in ahead of the children arriving… haha.
Please don't make the same mistake!
Although it has worked out for us as it was actually a part of our 10-year plan, it took a relentless focus on our goals for mortgage freedom for this to work.
Hopefully, my point here is clear –
Decisions you make over a few glasses of red wine and sheer excitement have real (costly) consequences and often with no going back.
Hopefully, I haven't put you off ‘cos we haven't even looked at the numbers yet.
Cost of Money
Let's look at the typical costs of raising one child.
You can ofcourse then scale up for 2 or 3 kids although there are some savings to be had if you have kids of the same gender.
To work the numbers out, I'm going to keep things simple (this is meant to be fun) and make some basic assumptions:
- Life is assumed to be in the UK or similar country and near a major City.
- Costs for the first 21 years of life using 6 years actuals (from my parenthood so far) & 15 years forecast.
- 2% inflation is factored in.
- All figures are in GBP with USD equivalents.
Given kids can be raised at different costs, we'll explore 4 possibilities
i) Basic Life
The cost of raising a child is the least here.
You rely on the State for education (Primary to Secondary), healthcare and your child doesn't bother with University.
ii) Basic Life+
The cost of raising a child is the same as ‘Basic Life’ above except your child decides to go to University for 3 years.
iii) Mid Life
The cost of raising a child is a bit more expensive as you send your child to Private Primary Education and also to University.
You also pay for private health insurance to add to your State benefits and you have life insurance that also covers your child.
iv) Rich Life
The cost of raising a child is at the highest here.
Your child is exclusively privately educated all through and then also attend University.
You also pay for private health insurance to add to your State benefits and you have life insurance that also covers your child.
In addition, everything else is expensive from extracurricular activities to holidays and car costs as you likely drive brand new cars.
Below is a summary of the numbers for each scenario:
The immediate reaction to these numbers is likely one of shock and utterances of 4 letter words!
I've tried to keep them as realistic as possible and probably missed out on a few cost categories.
Note that the numbers are inflated by 2% every year, so the totals are the sum of future costs.
You'd have to discount backward to see the present value although, to be honest, they won't be that different.
These numbers basically say that the cost of raising a child over time is not insignificant no matter what path you choose.
Note though that a huge factor here is location.
Someone raising a child in a remote town or village will ofcourse do it a lot cheaper.
However, in any case, there is money to be spent!
One way I try to look beyond the money problem is to see it as a time problem.
This removes the major focus on the numbers as one large figure and places it on how I can create the assets that will cover these costs over time.
Someone I met a long time ago referred to this as creating a ‘Money fountain’.
Another way I solve the money problem is to keep costs low and where possible, focus on the essentials.
Cost of Aspiration
Aspiration is a great thing. In fact, I'd say it's necessary for pushing us out of our comfort zones.
However, it also comes at a cost.
Many people who haven't quite attained in life typically want better education for their children because they see this as the possible path to success.
You also see this among ethnic minority or immigrant groups who are often playing catch up and aspire for success by investing in education.
One's hope is that aspiration and the expensive decisions often taken to make them a reality will result in a high return on investment.
Whilst this could possibly be the case, there is usually a timing difference between the cost being incurred and the return being generated (if at all).
A case in point is the decision to invest in private education when there is a decent option of state education.
The former isn't a necessity and should really only be pursued if one has the available resources.
Not necessarily because they can afford it today.
This is the type of misjudgment that many make when considering such decisions.
I know all about this because we've pursued this Private Education path for Primary school mainly because we could not get into a decent state primary school locally.
The other reason was to see what that quality of education is like… aka Aspiration.
To make it all happen, we saved for 4 years by not paying much towards nursery because we run a nursery business as a family.
As such, we've deferred the cost of nursery fees and now investing it in Primary education only.
This remains a choice and we would move to a State Primary if there ever became a need to do it.
We plan to do so for Secondary education anyhow.
Cost of Time
When you have kids, they're your responsibility 24/7.
Well, that assumes that you're a responsible and loving parent.
Where we used to have the option of getting back from work and possibly going out for dinner or watching a movie, those are somewhat gone.
Don't get me wrong, there are days when our evening routine is seriously on point and the kids go to bed at 7.30pm.
However this is not always the case and the evenings essentially get dominated by activities like reading, writing, games, bath time etc.
Whilst these are great, they wipe out free time to do whatever and whenever!
So I don't put you off completely, the time cost can be shared with your partner and even family members.
Some people even hire in help with au pairs and nannies.
The time cost also varies as time passes.
In the first 2 years of life, you may as well give up on the hope of sleep.
From 3 to 5, the focus shifts to routine and if you're super efficient, you start to get some of your evenings back.
Although weekends remain a write-off.
From 5 – 10 the differences between boys and girls emerge even more and your time is decimated even more so by individual activities such as sports, music, tutoring etc.
Then 10 – 15 there is even more pressure from exams and so your time will be spent on emotional support and silencing outbursts although the kids will be more independent.
From 15 – 21 You'll likely give up altogether and hand over mentoring to the godparents. Chances are they will still be living at home. You'll most certainly see more of your time here.
In short, there is an inverse relationship between the decision to have kids and the amount of free time you have through life.
This is made worse if you're mainly emotional (and/or careless) about the idea of having kids and end up with 3 or 4.
God help you!
Cost of Effort
Although the financial costs of raising a child are a cause for concern, I'm more concerned about the cost of effort.
What I really mean here is the backache and heartache that comes with raising children.
This is stuff that wears you out daily and drains you emotionally.
In the beginning, the cost is felt on your back thanks to the day to day routines and activities tied to raising a child.
You feel this the most from the ages of 5 – 10 when children are most active.
Presumably down to spikes in hormones such as testosterone.
This is the stage of life where we're at present and I can tell you the struggle is real.
Heartache vs Backache over time:
In the 5 -10 age zone, kids start to test your patience too.
This is the beginnings of the heartache that continue into the teenage years and adulthood.
Our sons now team up and play off against us as parents.
They know just how to irritate us through what they say or do and have become experts at pushing us to the edge.
I've found myself using my MBA negotiations training on my kids.
Of course, they smarten up and now understand some of our tactics.
I have even explored books such as Raising Boys as the way we were raised just doesn't work today.
What's frustrating about the effort needed is that it is relentless every day.
Whether you're tired or not, you still need to wake up when your alarm goes off.
You wake them up, get them ready for the day and forget about the frustrations of the day before.
Learning to see this all as a continual work in progress is the right mindset.
Have no major expectations of your kids if you have any.
They'll keep changing the game if you're too rigid in your approach.
Cost to Relationships
As the first one among my group of friends to get married, it took some time for my then single friends to understand why life would never be the same again.
I couldn't hang out with them as spontaneously as before and the chances of an all guys holiday became next to zero.
Having kids has a real cost to relationships. You'll start to find yourself hanging out with friends with kids or making new friends with kids.
This ofcourse comes at a cost to your existing relationships and those without kids will never understand because they aren't in your shoes.
Another way it affects your relationships is in your romantic situation with your partner or spouse.
Love life? What love life? Basically, slash all such activities in half at least.
The majority focus will be on your new bundles of joy not necessarily because it's what you want to do but because it's what you must do.
It is this lack of “fun” in some relationships that lead to people doing the unthinkable and possibly start looking outside their marriages.
It's for this reason that our policy will always be – Marriage first, children second.
Cost of Opportunity
This is the most noticeable of all the possible costs of raising a child.
The opportunity cost is simply the missed opportunities you've let go as a result of your choice to have kids.
There is essentially a real trade-off that happens when making that decision.
Goals such as Financial Independence become harder to achieve depending on what your life choices are about things like education, location, home type etc.
Careers take a knock as mums, in particular, take years off to raise children and in many cases never return to work in the same way.
Dads (and breadwinner mums) take on more responsibility and pressure to keep things ticking along.
The opportunity costs are real and should not be overlooked when considering the costs of raising kids.
To conclude,
The natural response from reading the above is that having children is a disaster financially and much more.
However, I'd disagree with this and mainly see having children as what needs to happen as part of doing life.
Although you'd be richer potentially by not having kids, will you truly be richer in life?
I'd argue not.
No doubt you should consider what it will cost you to have children in whatever location you live.
However, it should not be the overriding factor and the costs should be seen as something that gets spread over a long period of time.
What I think is worth considering deeply is The Real Joy Of Raising A Child. Check it out!
Related posts:
- 6 Keys To A Good Relationship
- How To Get Your Kids Interested In Money Management
- 100 Things That Made My Year (2018)
- How To Achieve Goals With Your Partner
How has the cost of raising a child affected you? Has it stopped you having one?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.
If I’m completely honest, I feel like people judge us for waiting until we were married and financially stable to have children. We will be debt free in the next week or two (yay!) and it’s only now that we are considering trying for a baby. People say ‘oh you can never afford a baby you just make it work’ I don’t think people understand that we don’t want to make it work or struggle through but I also guess a lot of people don’t know what it’s like to not have the money stresses and feel stable? It feels unattainable to them so what’s a baby added into the mix going to matter
Hi Charlotte
Interesting to read that you feel people judged you for waiting. Culture plays a big role in this and I’ve seen women in particular from particular cultures (e.g. African, Asian) judged harshly for waiting for one reason or another.
More generally, I think it’s a smart thing to wait and make sure there is some financial stability. Although thinking about it, I met a 50 year old man years ago who regretted massively the decision to wait. Aged 50, his first and only child was 4. He felt he didn’t have the connection to his son in the same way he would have had he been a younger and more energetic dad.
Hi Ken,
I love that you’ve included all the non-financial costs of raising children here, as they often get overlooked. The cost to your sanity is not to be underestimated! That being said, I definitely don’t regret the decision to have kids in my late 20s. But nor do I regret my decision to stop at 2!
Hey Mrs W,
I know what you mean about stopping at two! A big part of me imagines a life with more kids though. Especially in a different country with more support for those difficult early years. Recently, I rallied together with my siblings like never before to help my mum through a difficult time. In those moments, I valued having more than one other brother or sister. This remains a thought process for me.
Hi Ken,
Great article and very timely, as we are expecting our first in June! We spent a long time feeling that parenthood wasn’t for us and just quietly worked towards FI, but now some serious recalculations are in order.
Our issue is that we have been living overseas for almost a decade, earning well and preparing for an eventual return to the UK for ‘FI-lite’. When it was just the two of us, forward planning and decision-making was much easier – it was just a question of timing. Now there’s a kid in the mix, any move seems so much more high-stakes. Of course we’ll get it wrong, but how wrong and at what cost?! I guess it’s part of your Opportunity Cost we have to be aware of!
The financial cost of kids is something I was vaguely aware of, but your breakdown is very helpful to show the details. Thanks for sharing!
Hi Natatafalie
Congrats on your soon to arrive baby. The first child is usually pretty special.
I’m particularly interested in your story having prioritised FI first and then decided to have kids. May I ask what changed your mind?
Working abroad to build up a stash is certainly a great way to do it. I met a guy yesterday who works for Shell as an expat. He told me that he has education (for 4kids), home, health all paid for. He then went on to say that in a bad month, his savings rate is 75%!! Insane right?
Interested to know what country you’ve been working in and doing what? If you don’t mind sharing…
It wasn’t a deliberate decision to change plans and have kids, but we’re both pretty excited by the happy accident (while also quietly asking WTF are we doing?!)
It’s great to be in a position that gives us some financial wriggle-room rather than scraping by. However, our FI projections are now way off the mark assuming we want to keep funding our own plans and help with education into the future. Plus we’re thinking much more closely about WHERE to move rather than the when. Schools, community, facilities, all that stuff is so much more relevant with a small kid!
We left the UK in 2011 for HK and now live in China. I’m in marketing, he’s in media – well-paid but not crazy $$$, plus we’re both ‘local hires’ so miss out on the really juicy expat packages. We’re certainly nowhere near 75% SR! However, tax and living costs are relatively low compared to the quality of life, so we save one salary and live off the other. It’s worked so far, but let’s see how adding a small human into the mix works out for us…!
Hahaha re WTF!
Your thinking is the right one at the right time. Where to move to is game changing. Good luck with your soon to arrive baby. Interested to hear back how it further changes your priorities or not.
With two kids under five we’ve found that a lot of the day to day costs are effectively mitigated by lifestyle changes we’ve made as a result of having kids.
For example, although we have two additional mouths to feed, we spend less on food than we used to because we want them to eat healthy food, which means more homecooked vegetables and less takeaways.
We used to enjoy long haul holidays but now we favour staycations or camping at the campsite ten minutes down the road. The holidays are different, but just as enjoyable and cost next to nothing.
A healthy dose of thrift goes a long way too. Budget ranges, second hand and hand-me-downs for clothes, toys and accessories are all perfectly fine. You don’t need a £1,000 travel system no matter how pretty it looks. Don’t forget that if you’ve got family around then the kids would get a lot of clothes and toys as birthday and Christmas presents too.
All this to say I think your “basic life” costs are way too high.
I would argue the only necessary and unavoidable cost is the cost of having to have an adult with your child at all times, whether that take the form of a parent who is consequently not working or a paid child carer. Even then, some families can lower that cost by having family members look after the kids, or by having one parent work on weekends and/or evenings.
Hi BobbyBoy
Thanks for challenging my Basic Life cost. I actually agree with you that it could be a lot less. For example, I assumed a holiday amount, which could be wayyy cheaper as you pointed out via staycations. Kids are happy with the simplest of holidays especially at such a young age.
Pleased to read you comment about the cost of food and how that could be reduced through lifestyle changes. We noticed the same too and this is why our food budget remains £50/week even though we are now eating healthier than ever before.
All round, your points are all valid.
Man, sounds pretty DIRE lol!
We’re finishing up our 2 year milestone and it has been so rewarding, yet so hard. WE are two stay at home parents, and I wonder if it’s harder to be a SAH parent.
If you work, you just drop the kids off or leave at home with one parent, and enjoy adulthood for most of the day whoo hoo!
Sam
Hey Sam!
Great to have you stop by!
Pretty DIRE indeed! Man, I really do not know how you do it as a SAH Parent. I would absolutely argue that it is harder because you’re mostly in the same routine and environment. But as you’re both at home, the load is probably a lot lighter especially if you only have one child.
I still work and actually enjoy the break (**fist pump**) away from the routine and then enjoy coming back to it in the evening and absolutely enjoy the 90mins or so before bedtime. Mealtime, reading, bathing etc.
Saying that though, our first son is soon to be 6. The research shows boys need daddy more from 6 to 13, and I’m already seeing signs of this. So the chances are, I’ll taper down with more face time at home as time passes.
By the way, any hacks for how you manage blogging time vs active parenting?
My parents give my generation grief for being so worried when having children, because they don’t understand that things have really changed since their time, increasing the stress significantly. They got help from relatives watching the kids when they went out, or the oldest looked after the others in that time. Everything was some much simpler and I remember we were happy and healthy. Today kids have so much stuff, but are stressed to the point where I think they lose some of their childhood, while the pressure on the parents with most couples’ situations makes me wonder how those marriages survive that additional stress.
Social structure is breaking down in ‘developed’ countries because conditions are seriously unhelpful for parenting; neoliberal states mostly not only don’t help, but actually make it worse. Think of the high cost of childcare for which there is no legal choice to avoid this option, yet no income security to give parents the confidence to project they’ll be able to afford it. The deleterious effect of this kind of short-sightedness ripple out into the wider social fabric as well, like affording so many ‘orphaned’ old people and nobody (unrelated workers) to look after them.
This is a conscious political choice as it affects predominantly the poor, the state could easily change variables to create a more child-friendly country for no additional cost. Since they wont do so, (given the situation has deteriorated for many years now) it will steadily get worse as the underlying trend is also not changing. Planetary population growth past sustainable carrying capacity ensures the continuation of economic deterioration, guaranteeing austerity, so making it harder in all aspects of life, let alone parenting.
That’s a pretty bleak and in-depth assessment.
You make important points about how differently our parents had it.
On reflection, were things really that much easier for them? Or did they just cope better? Are we more informed today and therefore overplan for eventualities such as kids?
Surely to have had older kids looking after young ones, it means parents too the leap to have more kids in the first place?
I wonder… is there another way to make parenting easier in today’s world for more people?
Anything we can learn from how the Scandinavians do parenting?
Being a mother to two young girls has made our lives RICHER. I have always wanted to be a mom and the cost, whether it be financially, time, effort, etc, never even crossed our minds prior to having children. No doubt that having children requires some getting used to, but so does any other change in life. Children are a gift from the Lord (Psalm 127:3) and I believe that with anything you pour your soul into, it requires sacrifice…. and lots of unconditional love.
Well written, Lauren. Sacrifice and unconditional love for sure.
Out of interest, now you’ve had kids, does the cost factor still not matter to you? Hoping to have more?
Nooo…. no more kids for us! But that decision had nothing to do with the cost of raising them. My life is fulfilled by my kids, not money. Yes, having money does help to take the pressures off, but I cannot imagine my life without my girls. I value my role as a mother and am incredibly thankful that we have children. Sure, it means not being able to do certain things, like work full time, commit myself to my blog, travel and do what we want when we want to, but watching these two little people grow up and being a part of that is priceless.
Hi. Sure, our parents’ generation had a ‘leap of faith’ that things would probably be Ok, because this way the way it had always been done & we’re all still here so it must work right? We are more educated now though as you say and so more able to think for ourselves, so don’t necessarily thank parents for throwing us into life to sink-or-swim, especially if we don’t make it and have bad lives as a result. Legally it was their right to choose for us, but was it morally? I can’t make a life-changing decision for my neighbour that they will have to pay for if it goes bad, yet effectively this is what you can do by having kids you can’t afford. (in all aspects of what a human needs, not just money)
Social planners could easily make it so much better for parents in today’s society, the Scandinavians are indeed ahead in this, but the bar is set so low, it’s not hard to do better, the fact that they stand out only illustrates how nobody is seriously trying. If I remember correctly, the state there pays for both parents to have a year off work after a child and they can split this how they want, with the employer guaranteed to retain your job with no prejudice for the absence. They understand that even economically, this policy will pay for itself over the long term in avoiding social breakdown from the destruction of the family unit.
I am no expert in this field, but here are a few ideas off the top of my head all inspired by each working in different parts of the world right now – I see no reason they could not all be adopted immediately to create a humane and happy country: Current technology enables most jobs to be performed from home. A universal basic income set at a modest level would pay for a family member to look after the communal kids in the extended family. (every family has an unemployable individual who could now have meaning in life) Work times and education facility times could be staggered to avoid painful commutes, benefiting the whole of society, synchronising this in the 21st century is cretinous as well as pointlessly cruel. Affordable housing (state mass building programs or helping self-builds) could easily be afforded by developed nation states, they pay at least as much to private landlords. You probably also work for a corporate, so looking around at your job can see that at most jobs aren’t real, people are just shuffling paper around their desks running down the clock, if they weren’t there, nobody would notice. These jobs needn’t exist and the money employers waste on them could go to paying the remaining staff wages where a breadwinner could support a partner and children; like it used to be even a generation ago. Essential services can be run without ineptitude or corruption to be efficient and affordable, like utilities and transport, these are our biggest bills after housing, so if they were manageable, both parents would not have to work to survive.
I could go on but you get the picture, these are politically-driven, absolutely deliberate, ideological choices to keep the general population obedient and tilt the playing field so money flows by gravity into the pockets of the ruling elite. We are told this is the only way it can be and that nothing else works., but if you look at history and current practices elsewhere, right now, it proves that it’s a lie to keep us as ignorant as sheep.
Really well articulated points. You’re certainly right that more can be done to make things better for parents in today’s society.
I especially liked your point about the technology now being available for most jobs to be performed from home. I’ve come across supposedly forward looking employers who still frown upon this. The commute is one thing that kills the joy of work for most people as well as hurting the pockets. I reluctantly took the London underground the other day and it was quite an experience. Everyone looked pissed off as we all crammed into each other face to face. The odd F-word being muttered across the carriage.
I also agree with your point about the decisions made to keep the general population in a steady state. This is unlikely to change so it calls for a wake up for those who want a different life. Sad really that that’s what it has to come to.
Great article. My fiancee and I are debating about having kids. Im from a family with 5 kids and she is from one with 2. For me the idea of being a dad is great and the responsibility I feel will give my life more meaning over all. My mrs isnt too keen and has suffered from depression in the past and is worried the stress of parenthood would be too much to bear. The other scenario is that we live in nz and have no family for support here. Child care is free for the first few years here I believe. Plus the cost of living is quite expensive. I’m nearly 33 now and my partner is 32 next week. We’re quite focused on the FI path saving around 50% of our income. Interesting to hear others opinions on our situation. Thanks
Jimmy
I’ve been thinking about your situation.
This might not be what you might want to hear but it’s extremely important that you both come to an agreement on what to do about children before you marry.
I say this having seen a very close friend go through a divorce after 10 years with his partner (3 years married). They didn’t agree on children and when he decided it was time, she said she didn’t want any and never would.
This is ofcourse an extreme example and I hope nothing like that materialises for you…
I’d highly recommend some sort of light marriage prep/counselling. We had this before we got married and it covered everything from sex, money, faith, children etc. It just helped to have a third party help us come to some agreement whilst also understanding our deeper motivations or issues.
Children do give you meaning and you’ll find that this will become more important to you over time and might create a void if you don’t have them. This particular angle on “meaning” could be one to explore more with your fiancee whilst proposing ways to solve issues of stress she might be concerned about.
Do you have NCT classes in NZ? Those are super helpful and you become friends with other parents from the beginning. This would help your fiancee too.
Regarding support, this is the one thing we all struggle with. Even with my parents, sisters and inlaws all within 30mins drive from us, we still find that we need help now and again.
So for you the reality might be either you get a part time nanny or an au pair. Or one of you might have to take some time out. This is actually what we did. Mary took a pay cut, changed careers and started working part time to be able to stay more at home plus do school runs. This paid off big time for our children as they had mummy. Plus she worked at the nursery where they were from age 3 too.
Hope the above is somewhat helpful. Great you’re having these conversations now. I wish you well.
This is one of the most insightful and thorough posts I have found on this topic. Thanks for putting together the money facts with your own story. I also enjoy your unbiased opinions that seem open to several unique situations.
I have a 10 month old. I try to balance the idea of the opportunity costs and costs on my time with the idea that I am super inspired by him. Maybe that will lead to more money over all in the long run? However, it might be unique to have more drive because of having a child. Some people have a reaction of absolute exhaustion (and that makes sense too:)
As we consider having a second, I will keep the ideas from your article at the forefront of my mind. Insightful!!!
Many congrats on your baby! I remember that stage of parenting very well. Do enjoy the learning process. Hope you’re starting to have a routine going. Really interesting to hear that your son already inspires you. This came a bit later for me… probably from 18months when I started to see some real interactions. We watched a video of our son laughing hysterically aged 20months the other day. He remains as funny and cheeky and soon to be 6 in 8days. Best days of our lives really 🙂
This is a useful and excellent share. Will definitely share it with people I know.
Much appreciated, Ted!