Quote:
Originally Posted by Nomad9
*person disputing this*
What kind of expenses does that “conservative” calculation take into account? Private school tuition? A car per kid in high school? Overseas vacations? College tuition? I don’t think my (middle/upper middle, but frugal) parents spent anywhere close to $1 million raising 3 kids, let alone 1. Maybe taking opportunity cost into account, but it’s doubtful they would’ve invested all of the excess anyway.
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Yes to private school tuition (necessary in most major cities), yes to overseas vacations (I couldn’t imagine not taking multiple each year), yes to college tuition. Plus the usual clothes and food, fees for activities, child care (nannies in the early years, babysitters thereafter).
I should make clear that I am talking about a two-income household where both parents are hardworking professionals (working at least 50 hours per week), living in an expensive city with high real estate costs and marginal public schools.
In 2015 the average cost of raising a child in the UK was estimated to be £230k (£250k in London). Granted that was worth more in dollars at the time, but that means the cost in sterling has probably rising dramatically too:
https://www.telegraph.co.uk/news/ukn...UK-230000.html
This estimates $234k in the US (or $285k including inflation, which is the right way to think about it):
https://smartasset.com/retirement/th...aising-a-child
And that’s only to the age of 17, so it excludes college (which could as much as double the figure for some private universities).
Bear in mind these are only averages. They don’t take into account higher costs in certain regions, or in cities (where private school might be necessary), or focus on two income households where both parents are professionals and work way more than 40-hour weeks (meaning much higher child care costs).
It also doesn’t take into account real estate costs (the need for more square footage, which especially in cities is very expensive). The additional interest cost on a mortgage is part of the “cost of having children”. And it doesn’t take into account the opportunity cost if that money had instead been invested, which is also part of the true cost. That $285k invested at 5% for 20 years would be worth more than $750k just by itself.
Add all of that up - the $285k average after inflation (reflecting the rising cost of food, clothing, etc over the child’s early life), plus an upward adjustment for a more expensive geography, plus college tuition, plus real estate, plus opportunity cost, and the true cost is easily $1+ million.
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