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New Mexico State University

New Mexico State University

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Raising Kids Costs Big Bucks

LAS CRUCES -- Children are not usually thought of as financial assets or liabilities, but the cost of raising them can be rather startling, said a consumer education specialist with New Mexico State University.


"You can forget that old idea that after you have two or three kids, one more mouth to feed won't make much difference," said Susan Wright with NMSU's Cooperative Extension Service.

In the past, a large family was needed to make the farm or ranch work, but that is no longer true. Families are smaller, and children take up a good portion of the family income each month. Financial planning for children is essential for the family's financial security, she said.

To get a handle on costs, parents can look to the U.S. Department of Agriculture that reports average annual costs of raising children. Figures for low-, middle- and high-income levels are calculated for urban and rural children in various regions of the United States. Expenditures for food, clothing, housing, health care, education, child care, transportation and miscellaneous goods and services are estimated.

These figures are estimates to be used as guides only, Wright said. They are not absolute figures for particular families. They are based on a husband-wife family with not more than five children. They were originally used to provide budget guidance to individual families.

In 1997, the average annual cost of raising an urban child from birth to age 18 was approximately $171,227 in the Western cities. The cost to raise a child in rural areas was $155,000. Estimated annual expenditures per child ranged from $5,820 for the lowest income level to $11,900 at the highest income level.

The child's share of the family housing is the most costly item in the estimates, Wright said. Food and transportation are generally second and third highest, followed by education and child care, health care and the miscellaneous category.

The housing category includes the cost of the dwelling, utilities, household operation, furnishings and equipment, she said. Clothing costs reflect only purchases made during the survey year. Other clothing might be received as gifts or handed down from older children.

The miscellaneous category includes the child's per capita share of the family's expenditures for personal care, recreation, reading and other expenditures.