Raising children costs a lot of money, starting at birth and going into the college years. You name it – healthcare, clothing, school supplies, allowance, cars, sports and other extra-curricular activities. The expenses add up. 

Depending on what part of the country you live in, the cost for raising children from birth to 17 years old averages $726,000 to nearly $815,000 for a household with two children and earning more than $107,000 per year. For one child in the middle-income range, the cost is about $289,000 to more than $335,000. 

So, if you’re thinking about children, be prepared to budget and save – a lot. 

Budgeting for the newborn in the house

Financial experts lean toward the 50/30/20 budgeting, popularized by Sen. Elizabeth Warren and her daughter Amelia Tyagi in their 2005 book “All Your Worth: The Ultimate Lifetime Money Plan”. With this type of budgeting, 50 percent of your income covers necessities such as housing, car, and utilities. The 30 percent covers wants such as entertainment and dining out. The rest goes toward savings or paying off debt. 

Baby food, diapers, cribs, toys and clothes for the newborn comes under necessities. Many families don’t have a lot of disposable income when they are just starting out. So, trying to get a handle on anticipated expenses is beneficial. It may cost you $20,000-$25,000 for the first year alone. You – the parents – may need to live on less yourselves for a while. 

When the newborn is old enough, daycare becomes an option so a spouse can go back to work. Theoretically, daycare should cost less than the spouse earns when re-entering the workforce. That takes a cost-benefit analysis to determine whether it’s financially better for a spouse to remain at home and take care of the children. 

Daycare averages $11,666 nationally per year, or $972 a month. The cost will depend on the area where you live. You may be in an area where daycare costs much less than the average.

Momma cries on the first day of school

Your child now is ready for school. And with that comes the decision of public school or private school. You’ll have the quality of education element to weigh between the two. But for your budgeting, there’s the cost difference. 

Public school, of course, is mostly free except for the multitude of extra fees that are tacked on – sports and other extracurricular activities. But it’s a lot cheaper than private school, which can run you upwards of $25,000 a year.

Once you’ve decided on the school, then it’s time for buying school supplies and paying other fees to the school. That can be challenging to budget for each year because the cost probably will be different given different requirements at each grade level. 

If you have a child going to school for the first time, you’ll be guessing on what you need to save for the buying time. But here’s a start: the average cost of elementary school was about $662 in 2017, according to the Huntington Bank Backpack Index. The number rises to $1,001 for middle schoolers and $1,489 for high schoolers. 

Those figures are based on moderately priced items from online retailers. You may pay more or less for the supplies and fees. 

Private schools have the additional cost of uniforms. That cost can rise into hundreds of dollars. But that expense could be covered by funds you’ve set aside for school clothes. 

A way to budget for school expenses is to establish a separate bank account for just those expenses. And if you don’t use all of the money in that account, leave the funds there so they roll over into the next year or used for unexpected school expenses that may pop up during the year. For those who receive child support, that separate account could be where a portion is deposited. 

Sports are fun but expensive

The cost to play sports in school has risen dramatically over the years. In high school alone, the cost can be hundreds of dollars per year per child. Then you have the cost of playing sports outside of school, the “travel teams” of elite players across the spectrum of sports. Those costs reach thousands over the years. The average is about $2,292 a year but there are families that have spent up to $20,000 a year.

The biggest reason why parents spend so much money on sports is the belief that their child will get a college scholarship and eventually go professional. That’s done in the face of long odds. Few get college scholarships playing sports and still fewer go pro. “We know you love Junior, but he probably isn’t the next Lebron James,” financial guru Dave Ramsey wrote in his blog.  

Ramsey suggested keeping the costs of sports participation within a budget and be reasonable about how much is spent. Keith Newcomb, founder of Full Life Financial in Nashville, Tennessee, said that investing the money in a college fund instead and building it could later cover a big chunk of the price of college.  

Having a budget in place would go a long way toward handling the high cost of raising children and preparing for the college expense. Everyone has different lifestyles as well as different goals in life. There are many ways of raising children so that it doesn’t cost hundreds of thousands of dollars over their lifetime.