The True Cost of Kids

The True Cost of Kids

Hello $wanigans! Hope all is well. As I mentioned in my vacation expense tracker post, I recently found a new love for pivot tables…hard to make myself not sound like a huge nerd with that statement. Check out that post for a brief overview of what pivot tables are and how easy they are to make and use. Putting that newfound knowledge to work yet again, I created another set of pivot tables to more efficiently track the true cost of kids.

I’ve tracked this data in an inefficient / not-user-friendly format (my regular monthly expense tables) since my first kiddo was born in April 2014 (second kiddo born in April 2017). This week I spent more hours than I care to admit putting that info into more of a “data dump” list format, for lack of a better description, which will be the source for my new pivot tables.

Now that I’ve gone back in time over the last four years to log this data in a new format, it will be so much easier to maintain alongside my regular monthly expense tracking going forward. With all these expenses now listed and categorized I’ve been able to quickly populate numerous detailed tables from the Excel pivot table functionality.

Curious of the true cost of kids? For me, the cost of kids has never been clearer; see my breakdown below.

Comparing Notes:

  • All these figures are through 5/31/2018. This would basically represent a little over 4 years of expenses for my oldest and a little over 1 year for my youngest.
  • This data does not factor in gifts and gift cards which we’ve been so thankful to receive plenty of from friends and family. But in the grand scheme of things it is probably a rounding error compared to our total out of pocket expenses.
  • Both our kiddos are boys so we do benefit from not having to buy a bunch of clothes for both a girl and boy. Although, for our first kiddo we intentionally bought a bunch of gender neutral accessories, furniture etc which all remain in good condition to pass on to the next.

True Cost of Kids

Details on Cost of Kids

  • Education represents what we’ve invested into 529 plans. We consider the 529 plans for both kiddos fully funded as we expect the invested value to grow in time to cover the majority, if not all, of their college costs. When the time comes, we may get creative and have them pay for a portion of their tuition to keep their interests vested. So maybe we will “recoup” some of these costs, but TBD on that.
  • Just like the healthcare industry in general, I’m a little dumbfounded by the healthcare costs for our kiddos. I’ve tried categorizing them as best I could, but it is a little mind-numbing to me so the ambiguity persists. I will note that both were born in the same hospital, my wife received antenatal care by the same clinic for both, and we had health insurance coverage under the same plan provided by my wife’s employer for both…so not sure the vast difference in these expense categories.
    • In 2015 though, we switched the whole family back to my high deductible plan…just in time for some major ear infection expenses to be paid entirely out of pocket… 🙂 Such is life. But in reality, Lucy’s health plan does have much higher premiums to offset for the lower deductible, so we still may have been better off with my plan.
    • The other thing to note here is that the Healthcare category factors in the out of pocket costs that apply to our deductible. This does not factor in the added insurance premium costs we pay on a bi-weekly basis through the employer health plan. This might be something for me to track more closely going forward. I would estimate the added premium when adding kids (irrespective of how many kids) is around $2,500 / year.

True Cost of Kids

  • Food is basically my estimate. For my oldest, food was de minimis in 2014 as he was primarily breast fed; in 2015 I ball-parked it at $500; and beginning in 2016 I’ve estimated it at 25% of our family food and grocery expense. Same basic principle for my youngest with $0 in 2017, and $250 estimated to date 2018.
  • Activities primarily represents swim lessons, although for the oldest we also had him in gymnastics for a few months in 2016. We’ll typically get the boys in swim lessons over the winter, then rely on getting them in our neighborhood pool when it is open in the summer to maintain their development and comfort around water.
  • Diapers is a very interesting category to me and my wife as it is so telling of the uniqueness of our two little boys. Our second was born slightly smaller, but gained weight much more quickly. He jumped out of newborn and size 1 diapers quickly. He used a few size 2 diapers leftover from when our eldest grew out of them, but then our youngest jumped right into 3s and 4s. And the next box we buy for him will be 5s. Funny to see the differences!

True Cost of Kids

  • Accessories represent the basic items like car seats, strollers, carriers, baby monitors, bouncers…nothing too fancy here. The only additional expense so far here with the youngest has been second baby monitor. We’ve bought general home surveillance cameras which are cheaper than video baby monitors and can be repurposed when the kiddos grow out of them. Plus, we like how they connect to our Wi-Fi and can be viewed from our cell phones.
  • Furniture is primarily the crib, dressers, changing tables. Nothing fancy here either. The additional expense with the youngest was a dresser (the majority of which was actually put on a gift card balance that we had) and a new rocking chair (we moved the old rocker into our oldest’s big boy room).
  • Clothes is where we’ve probably benefited the most from gifts (as I’m sure that’s the case with most parents) and our second kid has been dressed in a fair number of hand-me-downs! We’ll keep this going as long as we can!

All the expense categories beyond this point get pretty de minimis and pretty self-explanatory.


The first noteworthy observation is our oldest kid’s total expense! Granted, he’s obviously been around longer and racked up more costs. And, to an extent, that’s unavoidable as hardly any additional Accessories, Clothes, Books & Toys, Furniture, or Housewares were needed for the youngest. This basically totals around $2.7K of cost savings for the second kid (and generally any additional kids although I think we’re set).

Secondly, knock on wood but our second has been way less expensive from a healthcare standpoint (including the Personal Care line item which includes some over the counter medication, etc). For whatever reason the expenses around our oldest son’s birth were more expensive (unexplainable as mentioned above), plus the numerous ear infections and ultimately ear tube surgery for our eldest.

Our second kid was tongue tied which we had snipped shortly after birth, but this expense was largely covered by insurance (besides two $35 co-pays for the Dr. visits). In total Healthcare & Personal Care has been about $5.4K cheaper for our second!

In addition to the combined $8.1K of savings from the two above mentioned takeaways, the other major cost difference is approximately $24K in daycare. Although that gap will eventually close with age.

The Future Cost of Kids

For me this is great info to track and monitor. I love this sort of stuff and it scratches my curiosity itch. The data will be all the more insightful as the years go by. I was talking to a co-worker a few weeks ago about the cost of kids. She has three kids: a high school freshman girl, a high school senior girl, and a college freshman boy.

She offered some nice insights and things to look forward to on the expense front…sense any sarcasm…:)?

She was telling me how she basically pays $500 a month in TV, internet, and cell phone bills! Granted she isn’t the most frugal person. The TV package includes a lot of nice “amenities” such as HBO and extra sports packages. And I surmised they have an unlimited data family plan for cell phones.

As far as I’m concerned, I wouldn’t be surprised as my kids age that they’ll put the pressure on me to upgrade from my free over-the-air channels from my antenna and my Netflix and Amazon streaming accounts. We may have some added expense in the future here. And no doubt the cell phone expense will be coming eventually. Ouch!

Secondly, she was saying how the sport activity expenses really get ratcheted up. She mentioned the annual membership dues for the travel soccer team for one of her kids was about $1K! That doesn’t include the weekend travel and hotel expense and all the other miscellaneous related expenses. Yikes!

The bottom line is that as soon as the daycare expenses start to roll off, it won’t be too long before I may experience an increased food budget, an increased activity budget, and elevated “entertainment” expenses (including cell phone, tv etc). And depending on sport injuries (or general injury / sickness), the healthcare line item might bump up. Yikes!

Tax Benefits

Let’s not forget the tax benefit though! It definitely is notable and I expect it to be bigger for us in 2018 with the new tax reform passed into law driven primarily by the increased Child Tax Credit. The tax benefit for us historically has also come in the form of paying the max $5K allowed for daycare on a pre-tax basis and the personal exemption (the latter of which goes away in 2018 with the tax reform). Without getting into the specifics of my tax return, the total tax benefit that I estimate we’ve received from 2014 through 2017 is around $13.5K.


The Other Benefit

The other benefit of maintaining such meticulous records…knowledge can be power in many ways. My wife joked that when the boys are older (around graduation) we could consider telling them and hanging it over the head of the most expensive kid…and perhaps paying the difference to the cheapest one.

I told her she can stop with the talk right now, no need to create another “expense”. But what we can do is tell them they are responsible to continue “paying it forward” (i.e. give us some grandkids), and if not, then instead they need to reimburse us… 🙂


All this info and data may lead to more questions than answers, so feel free to leave me a note in the comments below and I’ll be happy to further explain anything you may be wondering about. How does my level of expenses compare to yours? And if you are about to have kids, hopefully this gives you a little context of what to expect!

Thanks for taking a look!

The Green Swan

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  1. These are some really interesting numbers. Thanks for sharing! I’ve never tracked our spending on kids and it’s probably for the better. If I saw the numbers, I’d probably want to stop feeding them altogether (save on food and diapers, right?!). 😉 Hope you had a great Father’s Day, JW!

  2. We have 4 kids under 9 years old. I haven’t tracked the expenses, but after seeing your chart, I don’t think I want to!

    You may want to think about a line item for vacations? We’re taking the kids to London so their airfare is easy to quantify.

    1. Oh my, with four kids I’m not sure I’d want to either! I’m one of four boys myself and sometimes I wonder how expensive we were for my folks.

      Good point, I think I will want to do that. I’d have to look up what we paid for some of our past trips which would be easy to do. I bet we’ve already spent a thousand or two on airfare for my eldest.

      Hopefully you have a kiddo or two under the age of two so they fly free to London! Thanks for the comment!

  3. Wow on the childcare costs! I know you need it, but WOW! Some years I didn’t earn that much.

    I just heard about the travel sports for the first time from our cousins. Their kids are approaching the age where that starts up. Their kids seem to have sports scheduled two to three nights a week during school. Aside from the cost that’s a lot of time for both the kids, and two working parents with a commute.

    1. Yeah daycare is a necessary evil. Hard to swallow that expense, but what can ya do! At least we can pay for ours on a credit card so we can travel hack with it, but not every place allows that.

      Athletics are certainly expensive! It’s great for the kids developmentally. And certainly helps keep them busy which keeps them out of trouble! But yes, busy for the parents too. When you’re gone all weekend at a sport tournament how do you have time to get things done around the house?!

  4. Super impressive on the clothing costs. Our daughter is 11 weeks old and we have also received a lot of free clothing. Now she is getting older the gifts are drying up and we will probably have to buy some more between now and her first birthday.

    We have so many wipes and tissues around the house I can’t believe how much we go through.

    1. We aren’t necessarily support savvy clothes shoppers but we but most clothes from a good consignment shop nearby. Some new stuff can be found for cheap too. But we certainly don’t care much to overspend on stuff they wear a handful of times before they grow out of it.

      Oh I hear ya, we buy all that in bulk and still go through it fast!

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