Raising One Child Costs ~$2M

[mikeBOS]

I thought we could all have a field day with this one. A writer at the NYT calculates it will cost her almost $2M to raise a child.
She includes paying the kid's living expenses until they're 25, I guess because she doesn't have enough confidence in her parenting abilities to believe she'll actually be able to raise her child to become a competent adult.
So that's about $80k/year for 25 years. This is all, in her opinion, "without excessive expenditures."

[Chad]

I didn't read the article, but the numbers just aren't true. Over half the population makes under $50k a year, which means it would take 40 years just to make $2M and that doesn't account for taxes and the expenses of the adults.
So, the question is: was the article purposefully written as a "flame" piece or is the author just this dumb?

[Felix]

I'd agree with Chad here. The numbers are simply unrealistic. Comparing the income of median-wage couples with kids with those of low-income no-kid couples could and adding that up for 25 years could give a more reasonable estimate. At least one that has a chance outside of an ivory tower.

She states herself that her estimates go beyond what government agencies estimate and even beyond what the Wall Street Journal estimates where "some of the expenses they included seem based on the budgets of the truly rich, like furniture from Pottery Barn and bottled water delivery."
So she wrote the article knowing that her estimate is as much as government and the highest WSJ estimate combined, yet didn't stop to think if something might be wrong with her thinking, not to mention the basic reality check Chad suggested.
My guess is that the author REALLY doesn't want to have children and REALLY needs to rationalize that decision.

[George the original one]

Bunkum!
$2 million is starting with $46,177/yr and allowing annual 4% inflation for 25 years. Who spends that sort of money on their teenager or toddler or college kid?

[rube]

I agree with the comments above.
A better way to calculate the costs of kids is using a % of income.

According a financial institute in the Netherlands the following rule of thumb can be used (for teenagers):

1 child cost 17% of income

2 children costs 26% of income

3 Children costs 33% of income
For ERE and other frugal people perhaps a % of the total monthly expenses instead of income is a better way to estimate the total expenses on kids.

[Felix]

Usually expenses are equal or greater than income.

[JohnnyH]

Well, I can maintain my own adult life for $5,000 a year... What about a small human, that eats less, lives under my roof and does what I dictate makes them cost 16 times more?
My kids are going to basically be my free agricultural labor force anyway.

[Dragline]

They make great salt miners and breaker boys, too, JH.
As I often tell my kids, "I'm not payin'!"
And fetch me a beer, dammit!

[tzxn3]

I believe it was MMM who said that children are as expensive as you make them.

[jacob]

"Then there are the losses I would suffer as a working mother: half a year of forgone wages while on maternity leave and earning 73 percent of what men earn instead of 90 percent like nonmothers (or in my case, the equivalent fraction of my current salary) for the remainder of my career, according to a Columbia University study on the motherhood wage gap. This doesn’t include reduced benefits like 401(k) contributions, but it still adds up to over $700,000."
There's the kicker. Opportunity cost (loss of projected earnings) is added in with the cash expenses.

[pathguy]

So she took all of her future earnings and assumed she was losing 27% compared to men, even though it might not be true, so she is just making up money lost.
And she factored in the cost of future grandchildren as the cost of her kid...

[dot_com_vet]

One of the largest expenses (preschool/k - 12 education) is paid by everyone, whether you have kids or not.
Daycare is expensive, but temporary. We helped defer the costs by having extended family help, and by using pre-tax monies.
The writer is including "Adult Child Support", which makes the numbers insane.

[riparian]

I just asked my mom how much I cost during the first year of my life. She said about $2-300. She recalls that the main expense was (cloth) diapers, and that she spent like $40 at the thrift store on clothes. Toys were all gifts or homemade (this is how I remember it too), and they kept me in a cardboard box or in bed with them (not room for much else in a one room cabin). So. I call bullshit.