The cost of raising a child

Will the kids ruin your firefighting plans? (Financial Freedom Retire Soon) Kids can be expensive, but don’t let that stop you. They may change your plan a bit, but FIRE will not be out of reach. You just have to adapt your plan to include them. Many parents are motivated to work harder than before after having children.

However, I choose to take the cheaper route instead. I retired from my engineering career about 18 months after the RB40Jr was born. Becoming a SAHD helped greatly reduce child-related expenses. Fortunately, I had worked for 16 years by then. This is one of the advantages of having children later in life. We have saved and invested for many years and have already achieved financial freedom.

Babies can be expensive.

Diapers, day care, formula, baby food, clothing, and health care are all expensive. No wonder many potential parents are scared. RB40Jr was born in 2011. At the time, the USDA estimated that the cost of raising a child from birth to age 17 was $295,560. Oh! That’s a ton of money. However, I thought this estimate was overstated. Are children really that expensive?

Actually, children are not worth that much. Parents are real budget busters. Most parents want a bigger living space, a bigger car, childcare and other amenities. In particular, a large house costs a ridiculous amount of money today. If you can limit the expansion, the kids won’t cost as much.

For example, we lived in a 2 bedroom condo when we didn’t have kids. After RB40Jr was born, we lived in the same condo until he was 8. Now, we live in a duplex. It’s a little bigger than our previous house. Once he starts high school, we will expand our living space. Our household expenses didn’t increase much with a child. Of course, it depends on the family. Most families want more space and are willing to pay for a larger home.

Likewise, we had a car before we had a baby. Now, we still have a car. Parents can control the cost of having children if they really want to. Of course there are some sacrifices. Recently, Mrs. RB40 started griping about not having enough space. We may have to expand earlier than I had planned.

Well, the RB40Jr will be 13 soon. We are 75% done! Let’s add it up and see how much we’ve spent so far.

Cost of raising RB40Jr

Here’s a chart for a quick overview. You can see the fluctuations in the chart. Generally, parents pay a lot more for day care after the baby is born. We spent a good chunk of time at daycare until our son was 18 months old. At that point, I became a SAHD and we didn’t have to pay for childcare for about a year.

After that, we put our son in preschool to help him learn to spend time with other kids. Preschool costs much less than daycare. She also took classes tailored to her age group, such as cooking and tumbling. Once she started public school, childcare costs dropped to zero. However, other expenses increased. We signed him up for soccer, swimming, basketball, wushu and other activities. We set a limit of two activities at the same time so that she doesn’t get overwhelmed.

Child-related spending declined during the pandemic. We stayed home for a few years and didn’t do much.

Over the past 2 years, child-related expenses have increased. This is due to a couple of reasons. First, he’s growing and eating more. From 2022, I attribute 1/3 of my food and entertainment expenses to it. Second, we are spending more on travel. He goes on our trips so I also attribute 1/3 of the trip to him. Travel is now very expensive due to inflation.

Let’s look at the details.

(2011) Child: $5,000

Mrs. RB40’s insurance covers almost all the costs of the birth. From what I remember, we paid very little. I have heard that the process is now more expensive even with insurance coverage. For the first 6 months, we didn’t have to pay for childcare. Mrs. RB40 took maternity leave, her parents came to help, and I took time off from my engineering job. After RB40Jr was 6 months old we both went back to work and babysat him. In 2011 it cost about $1,000 per month. He was in childcare for 4 months this year. Other expenses included diapers, a crib, baby formula, toys, clothes and other baby items. His total cost for the year was about $500. If I missed logging anything in my monthly cash flow spreadsheet, we’d bump it up to $1,000.

1 year old: $7,100

2012 was a big year for us. I decided to retire from my engineering career to become a SAHD. The childcare was good, but we didn’t like having other people raise our son. RB40Jr was in daycare for 6 months in 2012. That’s about $6,000. The rest of the baby’s supplies were about $1,100 that year.

2 years old: $2,300

2013 was a cheap year for us. I took the RB40Jr around town to do lots of free activities. We went to summer concerts, explored parks, hiked, and played with other kids. Later in the year, RB40Jr started preschool. There were only a few hours on Tuesday and Thursday. In 2013 it cost $430 per month. This year he also outgrew diapers and baby formula.

3 years old: $5,160

We transitioned to a co-op preschool for about 6 months. The co-ed preschool was a little cheaper, but I was required to volunteer occasionally. RB40Jr didn’t like it so we went back to the previous preschool. This year, he spent 3 days per week in preschool. Preschool cost up to $500 per month. There is no school in the summer. RB40Jr had lower food costs because he ate less. I assigned 10% of my grocery expenses to her and increased it as she got older.

4 years old: $5,450

This year, he went to preschool 4 days a week and then took some extra classes. The price increased to $600 per month. We didn’t do many other organized activities at that time. We had lots of free things to do.

Age 5: $4,260

We did preschool for 5 months before the summer. Then, RB40Jr started kindergarten at a local public school. It was great. No more paying for preschool! He started doing more activities this year. We signed him up for soccer, swimming and a few other things.

Age 6: $5,259

RB40Jr had more extracurricular activities this year. He did wushu and football. We also started traveling more. This year, we went to Hawaii, California, and Cancun. I have assigned 1/3 of the travel expenses to RB40Jr.

Age 7: $5,098

He quit wushu because he got frustrated when he couldn’t get things right on the first try. He switched to basketball and continued football. The basketball was at the community center so it was relatively cheap at $100 per month. Although he quit basketball after one season. He was very disappointed when he missed the basket. We visited Iceland and Thailand this year.

Age 8: $3,190

This year was much less important. RB40Jr had a few football and summer day camps. It was 2019 and Covid was brewing. Some activities were canceled near the end of the year. We helped my mom go to Thailand this year. The trip didn’t cost much because we stayed with families.

Age 9: $2,957

2020 was not a fun year for anyone. All activities were canceled and the school went online. We spent a ton of time at home. Like most people, we bought junk to have more fun at home. We found a badminton set, baseball gloves, pop-up soccer goals, a goalie, a kiddie pool, and various other toys. We visited my mother in Thailand and traveled to Vietnam together.

Age 10: $2,273

2021 was another lockdown year. We have more – tennis rackets, a pickleball set, water guns, a baseball bat, and more. We went to Yellowstone for our family trip. We spent a lot of money on groceries this year for some reason. I guess because we ate every meal at home.

Age 11: $8,219

2022 was much better. Life returned to normal. RB40Jr went back to school. They had different fundraisers and we helped with that. He resumed wushu at the end of the year. We visited Thailand and the Maldives. Mrs RB40 took time off this year and we traveled a lot.

Age 12: $13,093

In 2023, child-related spending increased. Activities, clothing, shoes, gifts, summer camp, and a new bike added up to $4,352. A third trip was $5,901. We visited Disneyland, Washington DC, and Tahiti. A third of the meal was $2,840. This year, we cut back on spending because we were getting older. We wanted to enjoy our money while we could.

Total so far: $69,359

Children’s expenses so far

Oh wow, that’s a lot of money to spend on a baby. But it is still below the estimate. We’re 75% of the way done so I think we should be able to stay below estimates the rest of the way. However, child-related costs will continue to rise. Travel is becoming more expensive due to inflation. Also, we want to travel more in the next few years. Once RB40Jr goes off to college, we probably won’t have the opportunity to travel as a family. We want to make the most of the next few years together. Finally, we will soon be expanding our living space. This will increase our housing costs by $15,000 per year.

Most of the extra costs are by choice. We are spending more because we are more comfortable financially. If we really need to, we can cut down on travel and avoid expanding our living space.

*Note: I allocated a percentage of my grocery bill to childcare costs. I started with 10% when he was 3 and increased it to 33% when he was 12. He is eating a lot! Also, I have assigned 1/3 of my travel expenses to RB40Jr.


We are spending less than the USDA estimates, but more than my parents. We travel often and sign up the RB40Jr for various activities. It’s all good, though. Every parent wants to give their children a good childhood.

I’ve heard that child-related expenses increase during adolescence. This is 100% true in our family. We are traveling more and RB40Jr is participating in more activities. When we expand our living space in a few years, our housing costs will double. The next 5 years will cost us.

After that, it will be the college years. I’m not looking forward to it at all. Hopefully he will get some scholarships and financial aid. Higher education isn’t even part of the USDA’s estimate of child-rearing costs. We are saving for higher education with a 529 plan so that helps.

I hope I didn’t scare you into being a kid. They can cost a lot of money even when you are frugal. However, being a parent is a very rewarding experience. If you want to have a baby, don’t let fire stop you. Instead, adapt by making more money or being unemployed longer.

What about you? Do you know how much it costs to raise a child? I’ll send the bill to RB40Jr when he’s rich.

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Joe started. Retire by 40 2010 to find out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at the age of 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have tons of projects all over the US so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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