Having kids comes with a lot of expenses, but raising a child also comes with rewards that can’t be put a price tag on. There are many costs associated with having and raising children, from childcare and school tuition to clothes, food, activities, and summer camps. If you’re thinking about starting your family or expanding your brood, take stock of your financial situation beforehand so you can prepare for the expenses that come along with it. From daycare to college tuition and more, here is an overview of how much it costs to have kids.
Daycare
Daycare can be a significant expense, especially if you have more than one child. It can cost between $10,000 and $14,000 a year to send your child to daycare, depending on where you live. If you have to quit your job because you can’t find affordable daycare, you may be able to claim child care expenses as a tax deduction. You can deduct up to $3000 for one child and $6000 for two or more children, as long as your adjusted gross income is less than $200,000 if you are single, $250,000 if you are married, and $125,000 if you are filing as head of household. If you have a flexible work schedule, you may be able to stay home with your child and avoid daycare costs. If you do, you’ll also avoid the costs of paying for child care.
Food
If you’ve got little ones, you’re probably already aware of how quickly food can add up. Little kids eat constantly, and they’re particular about what they’ll eat, so you’ll likely spend more on food than you did when you were a kid. The good news is that you can claim a tax deduction for the costs of raising your children, including food. You can estimate food costs by tracking what you spend on groceries and other items that contribute to your family’s diet over a few months. You can also look at the cost of a food plan for your family size and age range to get an idea of how much it would run you to feed your kids.
Clothing
Kids grow out of their clothes quickly, and it can be pricey to replace them regularly. In fact, you can expect to spend around $10,000 on your child’s clothes from birth to age 18 — and that’s not including any special occasion outfits. You may be able to claim a credit for the costs of your child’s clothing, as well as other child-rearing expenses. The child and dependent care credit can be significant, depending on how much you spent on your child’s clothing and other expenses. It can be worth as much as $3000 per child. If you have multiple kids, you may be able to claim the clothing expenses for all of them on a single tax return. You can do this if the children are all under the age of 17 and are claimed as dependents on your tax return.
Transportation
Kids require a lot of transportation, whether it’s to and from school, extracurricular activities, or simply going to the park across town. If you have one or more young children, you may want to buy a car seat for each car you own. In most states, car seats are required for kids who are under 8 years old, and they can cost $200 or more each. If you have multiple kids and one of them is under 8, it may make sense to buy a couple of car seats at once rather than one at a time, as they can go on sale around the holidays. You can also look for used car seats, which may cost significantly less.
School costs
The average cost of a private high school can be as much as $50,000 per year, while a year at a public high school costs on average $8000 per year. The cost of a college education is well documented, but you don’t have to send your child to an expensive private school to rack up those costs. There are many ways to save money on college, including applying for scholarships, getting your child a student loan, and taking advantage of federal and state grants. If your child qualifies for the federal free or reduced price school lunch program, you may also be eligible for a grant to help with the cost of their education.
Child-related activities
Having kids opens up a whole new world of fun and enriching activities, but they’re not always cheap. If you have an athletic kid, you may want them to play a sport, or you may want to sign them up for a weekly music or art class. Most sports have registration and equipment fees, while art and music classes often have a monthly fee. Other activities, like summer camps, day care, and extracurricular activities like scouting, may have an additional fee. Some activities, like sports and day care, may be tax-deductible as child-related expenses. You may also be able to claim a credit or deduction for the costs of your child’s activities. You can claim up to $2500 for one child and $5000 for two or more children, as long as your adjusted gross income is less than $200,000 if you are single, $250,000 if you are married, and $125,000 if you are filing as head of household.
Summer camp and extracurricular activities
Summer camps are a great way for kids to stay active and socialize with other kids their age. They’re also an expensive way to keep kids busy during the summer vacation. Most camps charge around $800 for a two-week session. Many camps offer financial aid to kids who meet a certain income threshold. If you qualify, you may get a partial or full refund on the cost of your child’s camp. Some camps also offer payment plans, so you can pay the camp bill in installments. Some extracurricular activities, like sports, also offer financial aid, while others may offer payment plans.
College tuition
College may be a distant worry now, but it’s important to start saving for it as soon as possible. If you have kids, you should start saving for their education as soon as they’re born. There are tax benefits to saving for your child’s education, including a tax deduction for the contributions you make to their 529 college savings plan and the opportunity to claim your child as a dependent on your taxes for up to five years after they graduate. If you start saving for your child’s education in their infancy, you’ll have plenty of time to let your money grow. Even if you can only put away a small amount each month, it will add up over time.
Final words
Having kids is a wonderful, rewarding experience — but it’s also expensive. If you’re planning to start a family, make sure you’ve got a financial plan in place so you can prepare for the expenses that come with it. From the cost of diapers and formula to clothing, activities, and summer camp, there are many expenses associated with having kids. All it takes is a little bit of foresight to get prepared.