Managing Your Money : THE HIGH COST OF KIDS : Child-Rearing Expenses Are Getting Out of Reach

You carefree couples yearning to breathe the scent of diapers, you childless ones suddenly contemplating reproduction, longing to pass down your genes--all of you, beware.

Having a baby will cost you a fortune. Raising a child from cradle to high school graduation could cost--depending on your income level--from $151,170 to as much as $293,400.

That’s right. A well-to-do family with three kids will spend nearly a million bucks. And those figures don’t even include the cost of childbirth or the dreaded college tuition.

Nobody any longer expects having children to pay, as it once did on the farm. But if you’re thinking of having kids, you might as well know what you’re in for. Caveant parentes-- let parents beware.

For a baby born in 1990, the first year alone could cost mom and dad $4,330 if they earn less than $29,900 a year, or as much as $8,770, if family income exceeds $48,300, according to figures released by the Agriculture Department.

By the time that baby is 17 years old in 2007, he or she will have cost middle-income families $210,070 for housing, food, transportation, clothing, health care, education and child care, according to data compiled by economist Mark Lino of the USDA Family Economics Research Group.


And that may be an understatement.

“I don’t think studies on the costs of raising children even begin to take into account all the extraneous stuff that you acquire simply because you have children,” says Leslie Baldacci, a mother of two who writes about family issues for the Chicago Sun-Times. “There are the $30 Barbie dolls, the $2.99 McDonald’s Happy Meals and the unwanted pets who require God knows how much money to care for.”

“It’s kind of scary,” admits Mary Donberg. For she and her husband, Bruce, it’s too late to reconsider. They already have three children, ages 3, 5 and 12.

“It’s as if someone has sold you a $200,000 item with weekly payments for the next 17 years,” she says--except that there’s no buyer’s remorse.

“As family incomes have stagnated and the cost of living has accelerated dramatically over the years . . . the cost of raising children has also increased,” observes Cheri Hayes, executive director of the National Commission on Children.

Thirty years ago, economists estimated that parents were spending between $13,408 and $69,333 to raise a child.

For those bent on parenthood despite the costs, here’s what you may be in store for:

Depending on the hospital, uncomplicated child delivery could cost you or your insurer $2,500 to $3,000. A Cesarean delivery could run as high as $9,000--not including doctor’s fees.

Nowadays, for middle-income couples, a big part of the expense once they get home is opportunity cost--that is, lost income if a parent stays home from work--or child-care expenses if father and mother keep working.

Couples apparently do consider opportunity cost; high-income families have fewer children than low-income families, who have less money for child-rearing but who may not have to forgo as much income.

In a 1988 Census Bureau study, twice the number of babies were born to women in families earning an annual income of less than $10,000 than to women in families with an annual income of $50,000, according to Sandra Hanson, an associate professor of sociology at Catholic University.

More mothers are in the labor force today, so child care has become a major expense and a big factor in driving up the cost of child-rearing, according to Lino’s research.

In her book, “Who Cares for America’s Children,” Hayes found an enormous range in child-care costs throughout the country. Families in large urban areas pay the highest prices. Based on research compiled in recent years, working parents across the country were spending from $50 to $125 per week per child.

Child care is so expensive--and working women often earn so little--that it can eat up most of a mother’s earnings.

Researchers reported in a recent Journal of Marriage and the Family article that in families where the mother continued to work, job-related costs such as baby-sitting, child care, transportation, taxes and lunch money can consume as much as 68% of the mother’s income. For middle-income families, those expenses eat up about 50% of the mother’s income. In low-income families, it’s 30%.

The Donbergs are reasonably affluent, thanks mainly to Bruce’s construction industry salary. Mary, who works part-time coordinating the Long Beach Public Library’s family literacy project, says that of the $18 an hour she earns, only $6 is left after she pays for child care, taxes and Social Security.

Donberg estimates that her family spent about $600 a month last year for baby-sitting and preschool, plus another $160 monthly tuition to send her daughter Brooke to a private Catholic school.

Even though the financial benefit may not be large, many women continue to work because the second income still enables them to enjoy a higher standard of living and enjoy the satisfaction derived from a career, Hanson says.

“If I took five to 10 years off, I would have to start back at square one in my career,” Donberg says.

Indeed, women who stay in the work force will generally have higher earning power and more advancement in the future. And an increasing number see their jobs as insurance to help them survive financially in the event of divorce.

Between birth and that senior year in high school, your precious child will require an unimaginable number of goods and services.

A crib, for example. Budget-minded parents can get one at a garage sale for $20. Department stores may carry them for about $100 to $300. And for a designer crib, expect to pay nearly $800.

Even a rattle can set you back $12.

Preschoolers demand even more, especially now that they can talk. According to Lino’s study, they can cost you anywhere from $5,850 to $11,690 a year. Clothing for these little guys can range from just a couple bucks for a T-shirt to $200 for a lace and velvet Christmas dress.

These are the years when toy costs start to add up for parents. Dolls range from $3 at a dime store to $455 for a ballerina doll advertised in this year’s FAO Schwarz toy catalogue.

Toy race cars, a favorite of boys, can be had for a few dollars. But FAO Schwarz, the Nieman Marcus of toys, has a car dubbed a 500SL Mini Car for ages 4 and up. It features a Honda engine and goes up to 17 m.p.h. The price tag: $7,000.

Besides toys, there are a host of activities for your children: private swimming lessons ($20 per half-hour), ballet lessons at $10 a session, preschool music classes at $5 per session, or gymnastics at $10.

And if you believe that lessons are expensive, wait until your elementary school age youngsters start begging for $120 pairs of roller blades, $90 video games and $60 boogie boards.

Then there’s clothing. Scott and Elizabeth Hopkinson of Long Beach estimate that they spend about $1,500 a year on clothes for their two preschoolers, plus another $400 per year in shoes.

Teen years are the most expensive. When they hit sweet 16, cars, dating, designer clothes and pricey technology items push up costs.

At age 17, kids can cost parents anywhere from $14,780 to $27,400, depending on the family’s income bracket, according to Lino’s study. But the biggest hit to your wallet will be college.

Looking ahead at college costs for their daughter, Katie, in the year 2005, the Hopkinsons’ financial adviser calculated that sending her through Wellesley (including room and board) would cost $246,354, compared to $83,449 today, and that UCLA will cost $79,195 for four years when Katie is ready to go. That compares to $26,826 in today’s costs.

Of course, there are ways to save on child-rearing. One is simply to spend less on your kids. The things they need most are free.

In fact, experts such as Thomas Espenshade of Princeton University say many parents who have little time to spend with their kids tend to lavish them with gifts and other extras.

“Parents book their children up with expensive lessons of one kind or another--horseback riding, piano, ballet,” he says. “Orthodontics is even an issue. A generation ago, if kids’ teeth were crooked, parents would say it was a genetic defect and let it go. Now, they say, ‘Oh my gosh, we can’t let them go through life with crooked teeth.’ ”

“Our generation has an obsession with building the better child,” Baldacci says. “The attitude is give them anything money can buy. That’s not what it takes to raise children.”

“There’s nothing bad about parents buying things for their children. But having a quality relationship with a child is what’s most important,” says Shelomo Osman, a clinical social worker whose family counseling practice is in the affluent Lake Forest community of Orange County. “A lot of these parents feel very guilty about not spending more time with their kids. But they have too many bills to pay and things to do to keep up with their standard of living.”

It’s no surprise that “their kids adopt these same values from their parents,” he says. “It’s like the 15-year-old girl who tells her mother, ‘If you get to drive a BMW, why can’t I have these athletic shoes?’ ”

Having a lot of material possessions “doesn’t make children any better than those who don’t,” says Audrey Shindler, who has been a preschool teacher and director for 25 years in Long Beach.

“In a lot of ways, self-discipline and responsibility show up better in a child that has had less,” says Shindler, who directs the Belmont Heights Methodist Church PreSchool. “If things come too easily for children, they take things for granted.”