The Cost of Raising a Family
Starting a family is one of life’s most special times. Dreaming about what life will look like with a little one — or a few kiddos — is filled with anticipation, wonder, excitement and a healthy dose of uncertainty. One aspect of life that’s certain to be impacted when growing a family is your finances.
This is yet another great time to utilize personal relationships with your local community banker — so that, through whatever life throws at you, someone is available to answer questions and chat through your options based on your unique financial situation. To start, you should have a strong understanding of the costs associated with raising a family and a good plan in place that budgets for all of life’s demands.
In 2022, the cost of raising a child from birth to 18 years old increased to a total of $310,605. That’s about $17,000 annually per child. For families who adopt, an adoption could run up to $40,000, along with that average annual spending of $17,000.
For families facing the challenges of infertility, the number of infertility treatments is rising, and a single IVF cycle can cost $30,000 or more. Jump ahead a few years, and if you plan to cover your kid’s four-year college education, tack on another $142,204 in today’s dollars.
Thinking it through
While it’s impossible to plan through every aspect of life, it’s wise to consider how your life may be impacted once kids are in the picture. Here are a few questions to ask yourself as you plan to grow your family:
Housing: The largest expenditure when raising a family.
- Ask yourself: Is our home large enough to accommodate a growing family? Would we need to consider moving if we choose to have a second child? Are we in a family-friendly neighborhood? Do we want to raise a family in the city, suburbs or country?
Childcare: The cost of childcare wildly varies based on a family’s options and where they live.
- Ask yourself: What will we do for childcare? Will one of us stay home? Can family help with childcare? Do we want a traditional daycare? Is a nanny or nanny-share preferred?
Education: Another significant cost that may vary depending on schooling options available.
- Ask yourself: Would we send our child to public school or private school? Are we zoned for a school system we’re comfortable with? Are there tuition assistance programs available for private schools?
Transportation: Do we need to purchase a vehicle? Is the size of our current vehicle ready for kids (and all the equipment that comes along with them)?
Finances: Should we start a 529 or other college-savings account? Do we need to increase our life insurance plan? Should we update or start our will? Should we consult someone to help guide us through this new financial milestone?
A priceless ROI
“In many ways, the return on your investment with each key moment of ‘adulting’ is priceless, but you’ll sleep a little easier along that journey by being smart in your financial planning,” said Lucas White, president of The Fountain Trust Company in Covington, Indiana. “Community bankers add a personal element to banking, a benefit that’s often exactly what a family needs to navigate the financial impact of raising a family.”
As any parent can attest, parenting is one of the most challenging and rewarding roles you’ll ever take on. It’s a leap of faith because there’s no way to anticipate every cost or hurdle that’ll come your way, but there are tools and resources, like your local community bank, to stay at the ready for life’s twists and turns.