Welcome to parenthood! You are a proud new father, simultaneously overjoyed and terrified. Since you are now responsible for another human being, you should know that the estimate of what it will cost to raise your child
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A report from the US Department of Agriculture (USDA) estimated the cost of raising a child from birth to age 18 at $245,340 ($304,480 adjusted for inflation). That is for the average middle-income couple; costs ranged from families in the Northeast that will spend around $282,480 to residents in the urban South and rural regions who will spend about $230,610 and $193,590 respectively.
Unfortunately, that figure is not likely to drop, and inflation-adjusted wages are not filling the gap. Costs are up across the board, and certain areas are taking an increasingly large share of the costs – especially health care, childcare and education (pre-school through high school
That ratio will continue to climb based on recent trends, especially with respect to childcare.
Child Care of America (CCA) has put out an extensive report breaking down the demographics of childcare costs by state and the variations with respect to income and style of child care. Combining their data with Department of Labor statistics, CCA estimated that just in the last year, childcare costs outpaced family income by up to a factor of eight.
The CCA report shows that childcare costs
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The percentages from the USDA report do not show childcare as quite as large of a component. Housing tops the percentages of child-raising costs at 30%, followed by childcare and education at 18%, food at 16%, transportation at 14%, health care at 8%, and clothing at 6%. Miscellaneous costs compose the remaining 8%.
The Department of Health and Human Services (HHS) sets 10% of family income as a general benchmark for affordable childcare – yet in the CCA study, only ten states averaged less than 10% of family income for child care – the Dakotas, plus the southern block of Arkansas, Louisiana, Mississippi, Alabama, Kentucky, Tennessee, Georgia, and South Carolina.
Unfortunately, the actual expenses of childcare are mostly independent of how much you earn. As a result, the disproportionate rise in childcare costs hurts low-income and single families the most.
Single dads have a difficult enough time handling childcare with a single income (as do single moms
For married couples, there will be a threshold earnings value for the lower-earning spouse where it makes economic sense to stay home and care for children – but it may be hard for them to re-enter the workplace
It's okay to feel a little overwhelmed and terrified as a new father – there will be plenty more anxious moments along the way, but there will be even more moments filled with joy and wonder. Although it won't show up in your bank account, you are likely to get a great return on your investment of fatherhood. Have a happy Father's Day
This article was provided by our partners at moneytips
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