Monday, March 05, 2007

$279K vs. $1 Million or $1.6 Million? How Much Does It Take To Rear One Child?

The March 3-4, 2007 edition of The Wall Street Journal had an excellent article titled “The Million Dollar Kid: Government figures put the total cost of raising a child at $279,000 but some increasingly common expenses can send the number soaring over $1 million. Where you fall on the kid-spending spectrum.”

This article is right-on if you ask me.

I have no clue how the government came up with their figures.

This story provides details and examples of how real parents are spending money on their children today. Every single example in the article is one that I know is happening right around me. I could even add more examples of the money spent on kids that I know.

There are two interesting things in this article. First I loved how the WSJ deconstructed the government’s math formula then recalculated it using more realistic figures and adding in other real and common expenses. One good thing they did, for example, was count the entire cost of a Disney vacation as a child-related expense, as most likely if the family was child-less they would not go to Disney (very often at least). If a vacation destination is selected with the children as the primary audience then the whole thing should count not just the children’s portion of the bill.

Secondly I liked what was said about the way parents think about spending this money.

(Some parents are) “spending far more without viewing it as extreme”.

They gave an example of baseball equipment for a child from the ages 10-17 at $3K. However what about the baseball equipment for a child from age 4-9? Why was that left out? Around here kids start Little League at age four. Additionally it is common for children at ages one and two to do gymnastics or a Gymboree type class, as well as a “mommy and me” type of music and dance class. At three it is common for children to begin soccer and gymnastics. My eight year old nephew is playing contact football. A figure given for competitive sports for children over age 10 was listed at $12,500 per year (traveling soccer and traveling ice hockey come to mind). I know kids as young as three on competitive ice hockey teams.

Interesting also was the examples given of parents accelerating the spending as new babies come along. They said the first child got a cheap stroller, the next a $300 model and the third child got an $879 model. I did the opposite but I guess I am in the minority?

Some other examples are travel and more extreme adventures. One family spent $16,000 on a trip to Belize so their 11 year old son could experience adventure travel. I have noted as well the trips that children around here take are better than what I took as an adult and sometimes better than any trip I’ve ever been on in my life!

Here are some examples: Girl Scouts in my town went to Switzerland! When I was a Girl Scout we camped at the Scout Council’s camps in state, period. My friend’s Boy Scout son went on a Scout trip to Scotland last year. My nieces and nephews have been on multiple Caribbean cruises before they were eight. I know that lower prices for airfare have helped families be able to afford this but I can’t help but think that this is a bit nuts.

Three examples come to mind of when this international travel with children/teenagers can become a problem. Even though airfare may be cheap, perhaps international travel is more dangerous than domestic travel or just staying at home for celebrations and vacations? A friend of a friend lost her daughter while a passenger in a vehicle transporting them from the airport to their resort in Jamiaca, I believe the girl was 11. The typical narrow roads and typical driving style was blamed as the cause. We all know the Natalie Holloway story—on a trip to Aruba to celebrate her high school graduation (I hosted a sleepover in a tent in my backyard and a cake for my graduation celebration). Lastly an acquaintance’s daughter was pressured to take drugs and drink alcohol at nightclubs in Costa Rica, at sports camp with her private school, when she was 14.

Anyway, this topic is also very much related to the issue of being too busy, being over-scheduled et cetera. The push to give children a zillion opportunities for growth, development and entertainment sometimes leads to children doing too much and being too busy. Doing all these things and activities can be too much for some families, leading to rushing around and being stressed out and over-scheduled. The quality of life is diminished when it is all rush-rush-rush and do-do-do. And apparently due to the WSJ calculations all this ‘doing’ will lead a parent to spend $1 million or more on EACH child. Yikes. Will knowing the accumulated total expense over eighteen years make the buck stop for these parents? I doubt it, but it is something I think about—trying not to overspend or overindulge my children.

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