Every parent has heard it. Especially from your childless friends. “Well, at least, you get a tax break from your kids. I should have some kids, save some money on my taxes.” This drives me nuts. I understand how you could be jealous that I am getting a tax break you aren’t.
While necessary, I don’t like paying taxes any more than anyone else. So I am all in for
They Cost How Much?
According to the United States Department of Agriculture, it will cost approximately $233,610.00* to raise a child born in 2013 through their 17th birthday. Let’s break it down per year.
Housing: $67,746.90 – Yes I know they will live in your house, but you might need a bigger house. You may have to move to an area with better schools. Even if nothing changes about your living situation, there is still space in your house now being used by someone else. That is a cost.
Food: $35,041.5 – Kids got to eat, and they do. You will be shocked at how much they will raise your grocery bill. Also, be prepared for your diet to change. I know a few brave souls that will make two meals for every dinner, but I know more parents that say screw it and have hotdogs for the third meal straight.
Transportation: $35,041.50 – You will be taking your little tax credit lots of places. It doesn’t matter if you’re using the subway or a helicopter, it will cost money and you will be doing it a lot. School, sports, doctors, sleepovers, and play dates. Get used to it.
Clothing: $14,016.6 – Wow this seems like a lot (unless you’re my wife, but that is for another post). Coats, hats, shirts, socks, pants, jerseys, school clothes… there is a lot to buy. Don’t forget, This deduction is growing, just not in a way that is good for your bank account. If they grow enough, you may have to buy everything twice in one year.
Healthcare: $21,024.9 – That is if your little deduction isn’t sick. If they have any kind of illness or injury, that number goes up real fast. Not included in that cost: any time you might need to take off work to take them to the doctor, and time you spend with them while they are unable to attend daycare/school.
Child Care and Education: $37,377.60 – I am sure teachers are going to love these two being in the same category. Blame the USDA. You need to go to work and someone needs to watch your little financial black hole. So off to school, they go. Now add in add in books and pencils, paper and backpacks. Also, this is for a public school and does not include any college. That will add another $18,390.00 to the bill. If they pick a private school? $40,920.
Other / Miscellaneous $16,352.70 – This covers everything else. Sports, hobbies, gifts, toys, a cell phone… anything else they may need. This one can get expensive real quick, especially if they go over their minutes.
In total that means that raising a kid will cost on average $13,741 a year.
And the Tax Break is……
That tax deduction you were so jealous of? For 2014, it’s $2000 from the federal government. There are a few more credits you can add if you meet the right criteria. There is a credit for child care, and one for low-income families. The fact of the matter is that no matter how many you are able to take advantage of, they equal far less than the almost $14,000 a year raising a child will cost you.
Still, think you want this tax break? Still jealous? Probably not. Kids make no financial sense at all. But what they do bring: the experiences, the companionship, the joy, and the love? You can be jealous of that. I wouldn’t blame you one bit.
But if you want your kid to be money smart check out 5 Secrets to Teaching Kids About Money
*Costs updated to the most recent figures I could find.