It costs less than $4,000 a year to raise a kid—seriously?

We’ve pegged the number closer to $13,000 a year.

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From the November 2013 issue of the magazine.

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According to a recent Fraser Institute study, parents should be able to raise healthy kids on between $3,000 and $4,500 a year. Much of the report tried to debunk a 2011 MoneySense article, “The real cost of raising kids,” where we worked with a demographer to determine the costs of raising a child to age 18 for an average two-child family. Compare how our estimates differed.

New parents typically buy larger vehicles, but Fraser argues this cost is attributed to “their new lifestyle” and “would not be a cost of a child per se.”

If one parent leaves work to stay at home, this is hardly cost-free. But Fraser says families with children “have little or no daycare costs.”



4 comments on “It costs less than $4,000 a year to raise a kid—seriously?

  1. Money Sense is far more accurate! BY LAW, our 1, 2, and 4 year olds must travel in car seats (not boosters yet). Three car seats could not physically fit in the back seat of our car and we were forced to buy a Dodge van. (Had we bought a hummer, you could call it a lifestyle choice.)
    In our society, I would strongly disagree that having separate rooms for male and female children is a lifestyle choice. Moving into a home with an additional bedroom is a true cost.
    Increased household expenses are obvious, including water and electricity to bathe additional bodies, laundry, etc. Childcare costs are significant, as is the cost (both short and long term) of giving up a second income.


  2. There are many families single or two parents, who make less than $50,000 a year in Canada – they do not spend $13,000 a year per child.


  3. The Fraser Institute number is far more accurate based on my own spending tracking. Numbers like those published by Money Sense create a false impression to the rest of society and encourage a common belief that Children are to be seen mainly as a burden. We did purchase a new vehicle for the sake of car seats, but those costs have to compared against the fact that multiple children will fit into that van, and you will likely have purchased a new vehicle at a certain point anyways. We didn’t need the new van (although my goodness is it nicer) and we certainly did not “need” an extra bedroom – but chose to anyways because had the means to do so.

    If it truly cost $12,000/year to raise a child no one would raise a child, and the human race would have ended a long time ago.


    • I’d say the Fraser estimates are too low, the Money Sense guesses way too high. We fit three kids in car seats/boosters in a compact fuel efficient car. We didn’t upscale to a bigger house, but found creative ways to use the space we already had. That’s where the Money Sense model seriously overstates costs. But for their part, the Fraser institute is making a ridiculous assumption that staying home with the kids is somehow cost-free: sometimes the tradeoff makes sense, sometimes it clearly doesn’t, but to simply assume the 1950s upper-middle-class working-dad/stayhome-mom family model as a cost baseline is ridiculous, and their food/cothing/health-and-rec estimates are seriously low-balled.


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