The cost of raising kids
Top earners are able to spend more, boosting their children's odds for future success.
Sarah Gardner: OK, now I want to call my dad and thank him for being an engineer. But you know what? I'm going to first pat myself and my hubby on the back for all the investing we've done in our two kids.
Because it turns out my parents' generation spent a good deal less to raise their kids than we do today -- and yes, we've counted for inflation. According to a new government report (PDF) out this week, parents of a newborn child today will spend, on average, more than $234,000 bringing up baby.
And as Marketplace's Mitchell Hartman reports, there's a bit of a class divide when it comes to the cost of child-rearing.
Mitchell Hartman: The USDA counts everything from food, housing, clothing and health care, to entertainment, like video games, and educational accessories, like computers.
USDA economist Mark Lino says that adds up to around $13,500 per year per child for the typical middle-class family. For a poorer family, the spending goes down.
Mark Lino: They can expect to spend between $9,000 and $10,000 per year on a child. For the upper income group --
That’s a family making more than $100,000 per year...
Lino: They can expect to spend between $20,500 and $24,500.
That’s twice as much. And what does it buy this affluent child? Isabelle Sawhill co-directs the Center for Children and Families at the Brookings Institution.
Isabelle Sawhill: They live in better neighborhoods with more expensive housing.
And better-funded schools.
Sawhill: They buy more expensive and higher-quality child care, maybe summer camp, maybe even private school. They invest in all kinds of extras such as music lessons or special sports.
And this goes to the heart of the inter-generational wealth story Krissy Clark just told us -- it’s parents’ financial wherewithall to pass class and income advantages on to their children.
With less income, the poor obviously have less to spend. But they’re sacrificing plenty. All told, they spend 25 percent of their income raising their kids, compared to just 12 percent for wealthier parents, who have a lot more left over to spend on themselves.
I’m Mitchell Hartman for Marketplace.