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In 1960, a moderate-income family spent about $146,800 (in 2000 dollars) to raise a child to age 18. A similar family in 2000 spent about $165,600—a 13 percent real increase. Expenses include housing, food, transportation, clothing, health care, education/childcare, and other miscellaneous expenses (personal care items, recreation expenses, etc). Costs do not include college expenses or indirect costs (such as a parent taking work leave to raise the child). From 1960 to 2000, housing costs increased slightly (from 32 to 33 percent) and health care increased from 4 to 7 percent of the total of child-rearing costs. Childcare/education increased considerably, from 1 to 10 percent (the category did not include childcare in 1960). Expenses on food, however, declined as a percentage of costs (24 to 18 percent) and in real dollars in this time period. Clothing also declined as a percentage (11 to 6 percent) and in real dollars. Transportation and miscellaneous expenses declined slightly since 1960 as a percentage of total costs, although in real dollars they increased. How can knowing the costs of raising a child be helpful? The USDA report has three main uses. One is education. Families can use the information to plan spending and saving. Some schools use the information to help teens understand how much raising a child really costs, hoping that teens may wait to have children. A second use is determining child support. In 1998, 48 percent of children lived with either a single parent, stepparent, or in another arrangement. Many single-parent families are in poverty and child support is one way to reduce poverty. States often consult the Expenditures on Children By Families report in calculating typical costs for children for state child support guidelines. A third purpose of the report is to determine foster care rates. By 1998, about 520,000 children were in foster care (up from 262,000 children in foster care in 1982). About half the states use the USDA report to set the levels of foster care rates. USDA bases child-rearing expense estimates on the Consumer Expenditure Survey. They estimate expenses for children by age of child, household income level, number of children in the family, and geographic area. The expense estimates for the budget categories represent what is actually spent rather than some standard of what should be spent. Will I spend and save my money differently now that I know the costs of raising a child? Probably. But I also know that raising a child takes more than just financial resources. There are hugs, kisses and love to be given, and I will gladly pay these “expenses!” Congratulations to Lucy and Mike Schrader on the birth of their daughter, Madeline Keegan Schrader, born November 11, 2001.
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