Cost of raising kids in U.S. on the rise

Expecting children? Expect to cough up some big bucks.

The grand total for middle-income parents raising one child from birth to age 17 is $222,360, which doesn’t include college tuition, according to the recently released U.S. Department of Agriculture’s 2009 Expenditures on Children by Families report.

That’s 22 percent higher than the 1960 inflation-adjusted cost of $182,857.

“Annual child-rearing expense estimates ranged between $11,650 and $13,530 for a child in a two-child, married-couple family in the middle-income group,” the report’s abstract says.

“We currently spend more than that on day care alone,” says Carlo Hontiveros, an associate director for SNL Financial in Charlottesville, Va. Eight months ago, he and his wife, a physical therapist, welcomed their first child, Mia. “Mia currently attends what we feel is the best day care facility in the region.”

Indeed, the report called child care and education expense “the most striking change in child-rearing expenses over time.” Those expenses grew from 2 percent of total child-rearing expenses to 17 percent.

While food was among the largest expenses in both time periods, proportionally the overall costs have fallen, due to increased competition and other factors. “Changes in agriculture over the past 50 years have resulted in family food budgets being a lower percentage of household income,” the report says.

But some don’t mind paying a lot for food that they believe is healthy.

Meredith Rives of Evanston, Ill., is a veterinarian putting her career on hold to care for two sets of twins who’ll turn 5 and 2 in August. Her husband works in sales for Microsoft.

She feeds her kids organic food and sends her older set of twins to Montessori school, which costs $18,000 per year for both children.

“I put our money in healthy food and good schooling,” Rives says. “My husband and I look at each other at the end of the month and ask ourselves where the money’s gone.”

Housing was the most expensive expenditure in both time periods in the USDA report, and it increased in real terms over time. But a big house isn’t a priority for Rives.

“We are looking to buy a bigger house but just haven’t yet because it’s cost-prohibitive. It’s more important for me to stay home (to watch the kids) than have a bigger house.”

Rives looks on Amazon for diapers.

The family also hires a babysitter so she can run errands alone.

“Is it a necessity? No, but yes, for my mental health,” she says.

She said, however, that she buys almost no clothes. “I get hand-me-downs and shop at garage sales, mothers groups, rummage sales,” she says. “If I buy retail, I never buy full price.”

Indeed, a child’s clothing and miscellaneous expenses decreased as a percentage and in real terms from 1960 to 2009, due partly to “globalization,” the report said.

The cost of raising a child, particularly in a shaky economy, has some people wondering whether they should put off their plans to have more children.

Lindsay Murphy was 8 months pregnant with her first child, now 11 months old, when her financial services employer in Skokie, Ill., laid her off in a round of downsizing. She and her partner regularly discuss whether they should have another child before the economy gets on sounder footing.

The USDA examined child-rearing expenses of 11,800 husband-wife households and 3,350 single-parent households.