Cost of Raising Children Topping $200K, Families Still Save

7:51 AM, Jul 5, 2012   |    comments
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Nashville, TN (written by Tony Gonzalez/The Tennessean) -- When the baby came, even the family dog had to live with less.

For the Maracci family of Nashville, the birth of baby Emma meant coupons would be cut, sales would be sought and, when Daisy the golden retriever needed a toy, they'd find one at Goodwill.

"I never did coupons until I was in the middle of my pregnancy with her," said Jessica Maracci, 29. "We knew we had to start saving somewhere. I said groceries were going to be it for us."

The cost of raising children rises every year, and climbed slightly more than normal last year.

So for a baby born in 2011, a middle-income family can expect to spend $234,900 to raise her through age 17 -- $295,560 if anticipating inflation -- according to the latest United States Department of Agriculture report on family spending.

Depending on income, families spend $8,760 to $24,510 each year on a child.

The statistics tend to shock parents, whether the numbers sound too low or unbelievably high, said Mark Lino, USDA economist and study author.

"I think people sometimes forget some of the categories they're spending on," he said.

For example, a couple's decision to buy a home with extra bedrooms -- even if kids arrive later -- counts for the sake of the study.

Expenses vary widely based on household income. And spending varies regionally, with families in the urban South and rural areas spending the least on kids. The regional ranking has changed in the past decade, with Southerners replacing Midwesterners at the low end of spending. Lino attributed the change to a less dramatic increase in home prices in the South.

Families that don't pay for child care can expect to spend substantially less than the averages reported by the USDA.

That's one area where the Maraccis save -- Jessica stays home.

"I can't put a price on seeing her daily," she said. "That's the dream: to be home."

Not all families can make do on a single income. Just 27 percent of mothers stayed at home in 2009, down from 44 percent in 1969, according to the U.S. Census Bureau. That's just one indication that raising a child and sustaining a middle-class existence has become harder than decades past.

The new study points out that in today's dollars, families spend 23 percent more on a child than they did in 1960.

The study doesn't capture how families adjust their spending once they've had a child.

The Maraccis' monthly grocery bill hovers between $160 and $270, which is actually less than the couple spent before Emma's birth, she said. Thanks to coupons and sales, she bought baby formula at half price for more than eight months, and regularly buys name brands for less than generic alternatives.

She uses all sorts of tricks to save money, such as mixing her own cleaning supplies and drying clothes on a line. She also frequents consignment sales.

Paul Maracci helps, too. As a chef, he's able to cook with most anything Jessica brings home from the store.

But he said it's his wife's smart shopping that saves the family money.

"I really thought it would be harder," he said.

Willing to sacrifice

For some families, it doesn't take much number crunching to know when to save.

Meg and Paul Bremner, parents to Hank, 3, and Archie, 1, said they never wrote a budget.

"We weren't naive to the cost," Meg Bremner said. "We just really wanted kids, so we were willing to forgo some things that maybe some other young married couples wouldn't."

The Bremners have cut back on summer vacations, cable, Internet and full-blown salon trips.

They also made mistakes with groceries and toys, but have learned to focus on what matters most.

"The goal for us is to raise our kids with access to the right things: really nutritious food, healthy living and good education," she said.

And part of that education is already under way -- the part where 3-year-old Hank manages his small monthly allowance. He gets $4, but must give $1 each to his piggy bank, to his brother and to charity.

"We actually want him to grow up knowing how to manage money," Bremner said. "Maybe one day he'll make a baby budget."

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