Is raising kids a fool's game?

By Karyn McCormack

updated 10:58 a.m. ET Nov. 14, 2007

Like many parents, I'm suffering from sticker shock. It's not just the $375 monthly tuition for preschool. (And that's for just three hours, two days a week; five full days would cost me $1,000.) Little things add up, like the school's solicitation to donate to their school in Africa and monthly dues for Scholastic Book Club (how could you say no?). The school even put a price tag on potty training: If my daughter, who will turn 3 in December, was not able to use the toilet by herself by the end of September, I'd be charged $100 a month until she achieved this milestone. (She did it, whew!)

I know preschool is paying off when I hear her spell her name and see her progress in other skills (she has become quite the negotiator). And you can't put a price tag on the appreciation for life that I've gained from her. In the end, all of the sweat and tears (and dwindling cash flow) must be worth it, right?

In her 1994 book Pricing the Priceless Child (Princeton University Press), Princeton University sociology professor Viviana Zelizer describes how in the 19th century, children were "economic assets" that contributed to farm work and other important tasks. Then, during the early 20th century, the U.S. established laws removing many children from hard labor, sparking the "rise of the economically useless and emotionally priceless child," Zelizer says.

"As children have become less of an economic issue and people have fewer children and wait longer to have them, children have become precious, not in a economic sense but in an emotional sense," says Ellen Galinsky, president of the Families & Work Institute, a nonprofit research organization in New York and author of Ask the Children (William Morrow, 1999). "Having children is a meaningful thing to do in life—it's not just passing on a legacy."

A future investment?
Parents are invested in children emotionally by being more involved in their lives, Galinsky says. There's also hope that children will return the care when their parents are older and need assistance. "There's much more interdependence now," she says. "You're investing in your own future relationship."

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All of that sounds nice, but what's it going to cost me? The Agriculture Dept.'s latest survey found that households in the top-third income bracket (with average pretax income of $118,200) will spend $289,380 by their child's 18th birthday—or about $17,000 a year (in 2006 dollars).

Parents' largest expense is housing, which makes up roughly a third of expenditures, given that it costs more for a larger home in a town with good schools. In terms of growth, the outlays for child care and education have climbed from just 1% of overall expenses in 1960 (when the USDA started tracking these costs) to 10% in 2006. In 1960 education costs averaged around $362 per year (out of total expenses of $25,229 for middle income families). Health care is also sucking up more of parents' hard-earned cash given that premiums and co-payments have been rising, says USDA economist Mark Fino.

Indeed, the USDA survey is probably understating the cost of raising kids. Considering extras like sports equipment, summer camps, private school, Disney vacations, and a full-time nanny, raising a child through age 17 could cost $1 million or more. Some parents throw extravagant birthday parties and won't hesitate to buy their kids the latest video games and cell phones and splurge on Spanish and painting lessons.

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