Why Children Are Getting More Expensive

Despite the economic slump, the smallest Americans are requiring more money.

Baby sleeping with many toys surrounding him

Quiz: Are You Spending Too Much on Your Children?

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Here's some bad news for parents: Even excluding college tuition, children are getting more expensive. The Agriculture Department reports that children born in 2011 will cost their parents $234,900 before they turn 18. That's 3.5 percent more than what those born in 2010 will cost. The report attributes the increase largely to the rising price of transportation, child care, education (before college), and food. 

Even accounting for inflation, the cost of children has risen steeply since the department first started tracking figures in 1960. Back then, children were estimated to cost $191,720 each in 2011 dollars (for middle-income families). Today's cost estimate represents a 23 percent increase from that figure, largely because of rising healthcare expenses as well as childcare costs.

Housing is also a key factor in the overall cost of children, points out Laura Vanderkam, author of All The Money In The World, since it makes up about a third of the total cost estimate. "Many people buy that family house in the suburbs when they start raising a family," she explains, and since housing prices rose in the 1990s and early 2000s, so did the cost of having children.

According to the Agriculture Department, childcare and education expenses were the second largest expense after housing, followed by food costs. For a middle-income family that earns between $59,410 and $102,870 a year, here's how the costs break down (miscellaneous costs account for an additional 8 percent):

• Housing (30 percent): The Agriculture Department calculates the average cost of additional bedrooms in order to estimate children's housing expenses. That's because having children doesn't affect the need for more kitchens or living rooms, but usually requires more bedrooms.

• Childcare and education (18 percent): This expense is the most complicated, because about half of households say they spend nothing on this category. (That can be the case if one parent stays home to care for children and the family relies on public school, for example.) Instead of averaging the cost by factoring in "zero" for families with no costs in this category, the researchers create an average based only on families who do pay for childcare and education.

• Food (16 percent): The Agriculture Department uses its own food plans, which is based on a nutritious diet, to estimate the cost of feeding children.

• Transportation (14 percent): Researchers included the cost of family activities, but not those related to commuting to work or household maintenance.

• Healthcare (8 percent): This figure comes from out-of-pocket healthcare expenses that go toward children, which comes from the Health and Human Services Department.

• Clothing (6 percent): Government survey data on how much families spend on shoes and clothes are used to generate this estimate.

In addition to those hefty costs, parents also pay more now for convenience, and because the baby-product industry has exploded, says Molly Thornberg, founder of the Digital Mom Blog. "Every mom wants their kid to look cute, and all that cuteness comes with a price. There are hair bows, sunglasses, cute socks, diaper covers, personalized bibs and burp rags," she says, adding that even many luxury designers now sell lines of baby couture.

Thornberg, the mother four children ranging from age nine to 11 months, says her most wasteful purchases include items that didn't exist when she was a baby, including a battery-operated nasal aspirator, which didn't work as well as the old-fashioned plastic kind, and a Diaper Genie, which failed to contain the smell of dirty diapers.

To minimize some of those costs, Thornberg suggests finding hand-me-downs from a friend, especially for pricey but sturdy baby gear such as swings and bouncy chairs. Smaller items such as diapers and wipes can be purchased in bulk at a discount through online sellers such as Amazon.

Heidi Murkoff, author of What to Expect When You're Expecting, WhatToExpect.com, and related pregnancy and child development apps, recommends focusing on just a handful of essential purchases, including a car seat ($90 to $350), stroller ($100 to $1,000), a crib and other nursery furniture ($150 to $3,000), diapers, and clothes. "The best things in childrearing—the hugs, cuddles, kisses—are still free," Murkoff says. "Little babies are big business these days, putting the pressure on parents to buy, buy, buy, whether they need to or not ... the plethora of pricey products has become pretty overwhelming for parents who understandably want the best for their little ones," she says.