Money

Costs associated with raising a child

Facebook kelsi
Feb 10

We are planning to buy a house in Bay Area and I am trying to see how much left over income I need after paying off mortgage. I have a really good idea of other costs but given we don’t have children yet (we might have in coming one year), I don’t know what all expenses usually come up.

- I think a good professional nanny would be around $4k per month. Or more? if we go with day care that’s around $3k per month? if spouse decides to not work or take a break, this cost can be zero.
- medical costs? I have no idea of those. How much should I plan to spend here out of pocket?
- do costs increase when they need to go to pre school at 3? Since you probably need day care in afternoon in addition to preschool. How much?
- if going to public school, costs should be pretty minimal. But you would still need to pay someone to watch them during after school if both are working. Still ~ $3k per month or less?
What else am i missing?

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  • Homeaway ppMg64
    Main cost with kids are:

    1. Daycare cost/Nanny. Anywhere from 3K - 4K
    2. Medical but should not be too crazy given you work in FB and should have excellent insurance. I would say max 1K a year if you have a healthy baby
    3. Biggest cost would be other baby expenses with wipes/diapers/food. Anywhere from 250 - 500 a month.
    4. One time cost of baby room, car seats, stroller, bag and all comes to about 1.5K
    5. Insurance costs would go up for family. About 120 bucks a month or so

    I would say miscellanies cost another 200 a month.

    For someone in FB, minting millions this should all be chicken feed 😁
    Feb 105
    • VMware BobbleHat
      You got some serious miscellanies costs
      Feb 10
    • Chase fxJk28
      Maybe he assumes the baby will gamble all of daddy’s money away every month
      Feb 10
    • LinkedIn bored🐷
      Lol 200K/month miscellanies. Shocker.
      Feb 10
    • Chase fxJk28
      This baby is going to be a baller
      Feb 10
    • Homeaway ppMg64
      Duh! Fixed! :)
      Feb 10
  • Walmart.com QTFP86
    First thing first, decide what is your priority? Having a child or having a house in Bay Area. Rest will fall in place some other time...
    Feb 100
  • Oracle gV45dx
    Wow, I have three kids and never thought about how much they would “cost” the moment before I penetrated my wife.

    First world ultra rich problem indeed. Next what, figure out how to get the maximum benefit out of your investment aka your child?

    What a shame. One last thing, do you pull out if you suddenly think about a new expense that you didn’t consider before? You should.
    Feb 1013
    • Facebook kelsi
      OP
      Ok
      Feb 10
    • Flagged by the community.

    • Oracle gV45dx
      I made kids because I wanted them, because I loved the idea of a big family. If you love your kids money is never a problem. Never. You don’t “afford “ kids. You love them without thinking how they may ruin your chance for a model S.

      You guys keep counting your precious rsus.
      Feb 10
    • Oracle gV45dx
      And the role model you are setting up for your kids, they will count their money too when you are old, staying in a distant land, they will calculate if visiting you on Mother’s Day a good idea or not.

      What a f@ckd up capitalistic mentality.
      Feb 10
    • Flagged by the community.

    • Oath / MgmtAtinlay
      Triggered much?
      Feb 10
    • Square / EngSQ
      I could ask the same thing about you.
      Feb 10
    • Oath / MgmtAtinlay
      I’m not the one who went straight to the name calling. But the people who disagree with you are “judge mental assholes”?

      You’re triggered
      Feb 10
    • Square / EngSQ
      I'm not the one who is posting ignorant nonsense
      Feb 10
    • Oath / MgmtAtinlay
      That’s exactly what you’re doing
      Feb 10
  • Amazon JSnowflake
    Nanny for 40 hours a week will cost more than that when you include payroll taxes etc. Budget 5000-5500. You are a bit early to start planning elementary school aftercare. Life will surely throw 15 curveballs at you between now and then.
    Feb 106
    • LinkedIn bored🐷
      Payroll tax? If the nanny is a contractor you are not responsible for that.
      Feb 10
    • Amazon JSnowflake
      You are incorrect. See: https://www.irs.gov/businesses/small-businesses-self-employed/hiring-household-employees Generally trying to do what you are saying will result in IRS audits and potentially state labor law penalties in California which has crazy strict state labor laws.
      Feb 10
    • LinkedIn bored🐷
      Have fun paying that payroll taxes.
      Feb 10
    • Amazon JSnowflake
      Right, so its all fun and games until you fire the nanny. That's when they can go retain some fly by night employment lawyer who threatens you with overtime and payroll violations up the wazoo. Yes, it happened to me and cost me a fortune (tens of thousands). In my case I had filed W-2s and paid payroll taxes and the claims were about missing hour counts on paystubs and overtime that never happened. The burden of proof is also on you as an employer, so make them sign in and out every day too. Violate employment law at your own peril, it is a huge racket in the state of California.
      Feb 10
    • LinkedIn bored🐷
      You hired the wrong people. In my circle nobody pays that payroll tax.
      Feb 10
    • Amazon JSnowflake
      In your ethnic minority community, I suppose? I am white and we have white antiprivilege. People sue us for shit at the drop of a hat.
      Feb 10
  • Airbnb tcorgfo
    The biggest challenge isn’t money. It’s the kid. It’s a human that needs a lot of care. Both of you have to prepare to spend the whole night with the baby for extended periods even if you have nanny help. The young kids are pathetic in day care so don’t send them there until they are 2-3. You can’t go vacation and don’t have time for work and developing your career. This is only assuming you have a healthy baby. If he/she suffers some medical conditions it will be much worse and even if he or she catches cold it would be hell for whole family for a week. If you are concerned about the cost and house for now I would say you are not quite ready. Wait when you are ready to care that little new life no matter how exhausted and broken you are. The money isn’t an issue as some others explained you can do it with very little cost but you have to spend a lot of time have a lot of patience and ready to make serious sacrifices. Good luck
    Feb 103
    • Facebook kelsi
      OP
      Thanks. To clarify : I think the way I asked this question gave a wrong impression but purpose is purely to make sure I am not over-spending on my house and have enough left over money to not come in the way of caring for the little one. There is no doubt in my mind that I want one, and have been preparing myself for the time and patience that’s needed. But those are orthogonal to what I am trying to ask here :-)
      Feb 10
    • Intel DrmCmTrue
      I hear you OP 😂. I dont know why people are becoming emotional here.
      Feb 10
    • Airbnb tcorgfo
      Glad to know you are prepared. For essentials you don’t need to spend a lot (300-500/m, 1k counting some unexpected). The care part can vary widely That’s what I was trying to explain. It’s not entirely about cost because there is no good service to care the little one for you. A standard day care for 6 month old can cost 2-8k depending on your location and services you get, but I can’t recommend any. For first time parent I would recommend getting some help from family members if none of you want to take a long paternity leave.
      Feb 10
  • New DuQvV7x
    Children are crazy expensive. Almost $1m in cost by the time they turn 18.

    Buy a car instead.
    Feb 100
  • Intel holy_moly
    We bought a a home in east bay in 2017 when our kid was a year old.

    1. I don’t know what plan you have for medical but if it’s HDHP say where 6k is the max for out of pocket and 90% covered after that then don’t be surprised if you hit the 6k soon in the first 3 yrs ( per yr) for your kid. They will fall sick and you need to also give them immunizations at regular intervals. This winter has been bad and we had to take our kid almost every 1.5 months to the doc.

    2. Day care entire day would cost 2k per month. Same goes with Montessori +day care which would come to 2.5k per month after 2yrs old.

    3. My wife quit work after kid was born as we both decided we will not send the kid to day care until she is 2yrs old. Depends on how much you earn your finances might be tight with mortgage, doc visits etc on single income. But it’s doable. Make sure you have some help at home like in laws or so forth if you can.

    4. Once the kid becomes 3+ then you need spend money on extra classes that they are interested in and that is variable. I would guess not more than 2k per yr on an average assuming kid goes to public school at age 5.
    Feb 106
    • VMware BobbleHat
      Hdhp is the wrong choice with a baby. Get the normal PPO or HMO options
      Feb 10
    • Intel holy_moly
      It is a PPO. We wanted the same pediatrician and PCP that we had from birth and stuck to HDHP. Actually it makes more sense for HDHP for us. Atleast I know how much max I am responsible for.
      Feb 10
    • VMware BobbleHat
      With a normal ppo(not hdhp) I pay practically nothing. All well checks, immunizations etc are free. Going in for emergencies cost $25. The actual birth and all that care total out of pocket cost was < 1000.
      Feb 10
    • Intel holy_moly
      I guess that’s what your employer offers. Mine offers HDHP or Kaiser.
      Feb 10
    • VMware BobbleHat
      Egh. Maybe getting a better employer would be the right option /s
      Feb 10
    • Intel holy_moly
      May be.
      Feb 10
  • Lyft Tira.misu
    Also consider flights once kids are older. An extra seat or two will double every single vacation or flight home in perpetuity.
    Feb 101
    • Tableau HWbs04
      Consider Business Class if you can. Makes travelling with a child very easy.
      Feb 11
  • Apple / EngBangOver
    If your wife decides to not work then day care can be zero yes, but your income as a family takes a considerable hit. Probably bigger than what you save in day care.
    Feb 101
    • Facebook kelsi
      OP
      Yeah. Wife may have to take a break for other reasons : like finishing up masters, waiting for H1B or just wanting to spend more time with kids.
      The point is that my base salary alone can not do mortgage payment + kids expenses + regular expenses. So taking wife’s income into account for kids expense when she is working and assuming kids expense will be very low when she doesn’t
      Feb 10
  • Tableau HWbs04
    Consider moving to Seattle. Cost of living is slightly cheaper.
    Feb 110

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