Hefty Annual Cost of Raising a Kid
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Hello, baby! So long, savings? BabyCenter’s 2014 “Cost of Raising a Child” report reveals that parents spend an average of $13,000 a year per child, leaving two out of three mothers worried about not having enough money to raise their kids. And it turns out the stress has been spreading: The number of anxious moms is up 11 percent from last year.
The hefty price tag pays for housing, food, transportation, clothing and healthcare, BabyCenter.com says.
“The first year with a child is one of the most expensive,” BabyCenter financial expert and author of The Real Cost of Living Carmen Wong Ulrich tells Yahoo Parenting. “There are so many changes, including a move for some families and child care, plus all the equipment you need, like strollers and furniture.”
Seventy percent of the nearly 1,100 BabyCenter moms polled reported purchasing or upgrading their insurance following the birth of a first child, while 65 percent opened a new bank account and 60 percent shelled out to improve their home with new paint (83 percent), flooring (46 percent), and non-nursery furniture (37 percent).
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But all this spending may be more about mom than baby. “With social media and constant marketing, there’s a lot of pressure on mothers to feel like they need to buy the latest and the greatest products in order to do right as a parent,” says Ulrich. Not to mention all the experiences it can seem like other parents are giving their families. “Everybody is going on vacation and posting pictures of their kids,” she says. “And it all has that aspirational tint to it.”
So perhaps it’s no surprise that nearly 60 percent of the women polled said they felt some level of pressure to appear well-off on social media due to feelings of envy and embarrassment about their own financial situation. “A lot of it is that we want to be like ‘them,’” explains Ulrich. “We want to brag about what we’re doing. But you have to understand there’s a whole story behind what you’re seeing.”
Because if all the other moms are really so well-off, why do nearly 30 percent confess that credit cards are their most common method of payment — and two-thirds have $25 or less in their wallet at any given time? “Nobody wants to show the bad news,” Ulrich says.
So as soon as you start to feel like you’re the only one without that amazing, and exorbitant, new Japanese stroller, check yourself, she advises, “and be mindful of what the real cost of what you’re seeing is.”
The trickiest part of money matters for the moms polled, though, comes a few years down the line when it’s time to teach the tots about budgeting. Sixty percent said they don’t give an allowance because their children don’t know the value of a dollar and think “money grows on trees.” (The mothers who do give allowances dole out $1 more per week than three years ago: $5.65 on average).
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“We so rarely handle cash these days and our kids see us swiping at registers, so it’s easy for children to not be clear how money works and the limits that exist,” says Ulrich. “Start early and often with budgeting lessons – give kids a small shopping budget or challenge them to not spend more than a certain amount on everything from a toy they would like, an app, or movie.”
