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Sandra Gilpatrick, CFP ®,CDFA™

How expensive is it to raise a kid in Boston?

How expensive is it to raise a kid in Boston? 

How much does it cost to have a kid here? It’s a burning question I receive from many women planning on having a child. It’s an excellent query, because there are so many choices parents have, all with differing expenses.  I wanted to write about my actual costs raising a son in Boston to share my experience as a mother and financial professional. When I read general articles on the costs of a child, they don’t seem to apply well, so for others in the same jam, here are my insights.

The US Department of Agriculture (USDA) projects a child born in 2015 would cost $264,090 in the Urban Northeast up to age 17 (sorry, college costs not included)*. I’ve read articles about national averages, but I thought I would let my city-dwelling friends here know what an actual spend could look like to help prepare. To note, my expenses could be drastically lower, especially if I took advantage of free public schools. Consider your specific priorities as you read this article and you may find extra cost-savings.

The USDA has been tracking the cost of raising a child since 1960 and their figures are used for state and local governments in determining child support. Using this source, I started my spending comparison. The USDA shows money going to: 29% housing, 18% food, 16% childcare & education, 15% transport, 9% healthcare, 6% clothing, 7% miscellaneous*. When I attempted to use the same variables, here were my results: 37% housing, 16% food, 34% childcare & education, .01% transport, 9% healthcare, 2% clothing, 2% miscellaneous. Comparing myself to USDA allocation, I found healthcare, clothing and food costs to be comparable. However, I found the biggest costly discrepancies were in childcare & education (16% vs. 36%) and housing (29% vs. 37%) with significantly more going towards those costs. I lucked out on not owning a car and mainly taking public transport or rideshare to make that category basically nil. I have a bunch of good “mom tips” to keep typical spending low, but I’ll steer this article toward the bigger allocation items, as they are the driving forces behind the huge costs.

For housing, just a two bedroom place was needed with one child in the city, which is not cheap. You’d be hard pressed to find anything for a family under $700,000 in the heart of Boston. There is a large price increase for three bedrooms. Looking around, I commonly see over $2,000,000 on Beacon Hill. If you carry a mortgage, you’re higher than the USDA allocation with housing prices. I can appreciate how many of my friends who have multiple children leave the city. Also, the cost of more than one private school education becomes monstrous.

Since my son is 14 now, I wanted to make sure what I spent on childcare a decade is still current so I revisited websites to make sure the costs were comparable.  Hourly nanny rates are still around $20 per hour in Boston**. I chose to have someone to come to my home daily, so I could go to the office and paid about $34,000 annually (plus employment taxes) for ages 0-3. I also paid for enrichment classes like French, so add in another $900 per year. As they get older, this turns into camp, which was about $5000 per summer.  If you have marvellous grandparents at your disposal to reduce childcare costs, this could be a huge savings when you have a baby.

By age four my son started private school, which started around $28,000 annually and increased to almost $40,000 per year by 7th grade. That was looking like a treat, as boarding school for grade 9-12 is about $54,000 for the school we chose in the UK. Looking at comparable US boarding schools, the number is closer to $68,000 per year. This does not include school uniform and extras. Running quick maths on school fees, that’s over a half million before college starts. Then you get to add on all the USDA categories for expenses beyond just education. Just to point out, private school costs can be more than college. Of course, I couldn’t leave college costs out of the conversation.

Private college in the Northeast could run about $74,000 to have your child enrolled living on campus with fees assuming no financial assistance. I’ll have to write a future article on college expenses, expected family contribution with net price calculators, and scholarships as that subject is worthy of writing on its own. Assuming four years, full pay would be around $296,000. Schooling alone pre-kindergarten through college full pay if you go private all the way your price tag could easily be over $800,000. There is your million dollar baby under these conditions.

Having a child is a poor financial decision. Being a financial advisor, a big part of my job for clients is to help them plan according to their life priorities and goals. So, if having a child is a priority, I hope this gives you a good glimpse to start preparing for a child. It’s easy to calculate expenses, difficult to value the intangibles you receive from being a parent.


*USDA report, Washington, DC published January 2017 “Parents Projected to Spend $233,610 to Raise a Child Born in 2015

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