Having children can be costly, but the family budget can be flexible to pay for them if you plan ahead.
Do you happen to have an extra $14,000 (or more) you can squeeze out of your annual budget to cover the expenses involved in raising a child? If not, you might consider starting on your financial plans for a baby, because that’s what the U.S. Department of Agriculture (USDA) estimates for the costs of child-rearing per year.
That’s according to “The Cost of Raising a Child,” the USDA’s annual report on what middle-income, married-couple families can expect in terms of the cost of raising a baby. The costs will vary, of course, depending on the family income level, the ages and number of children, and where you live.
“There are significant economies of scale with regard to children, sometimes referred to as the cheaper-by-the-dozen effect,” said Mark Lino, an economist and the author of the report. “As families increase in size, children may share a bedroom, clothing and toys can be reused, and food can be purchased in larger, more economical packages.”
The cost of raising a child includes everything from the price of food, housing, transportation, health care, and miscellaneous goods and services, plus what the government calls “child-specific expenditures” for clothing, childcare, and education.
But get this: The estimated $233,610 tab covers birth through age 17 and doesn’t include the costs of a college education. That’s when the real spending party begins.
How can you keep your family financially solvent and still save during these crucial child-rearing years and beyond? Here’s a quick checklist of things to keep in mind and in the bank.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
An investor should consider a 529 Plan’s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement contains more information and should be read carefully before investing.
Investors should consider before investing whether their or their beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program and should consult their tax advisor, attorney and/or other advisor regarding their specific legal, investment or tax situation.
TD Ameritrade does not provide legal or tax advice. Please consult your legal or tax advisor with regard to your specific tax circumstances.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2020 TD Ameritrade.