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Million-Dollar Baby?

The Motley Fool crew is no ship of fools. We're putting Mom first, and so should you. Check out all of the Fool's Mother's Day articles.   

You've been anxiously awaiting your bundle of joy for months, and now you're anxiously worrying about the accompanying bill. How much can you expect to spend on your darling baby over its lifetime? Brace yourself, mom. Before you take a look at these numbers, remember that you get your own special holiday, with flowers and breakfast in bed, for all your hard work.

According to the latest figures compiled by the U.S. Department of Agriculture, a couple can plan to spend between $143,790 and $289,380 on a child through age 17. You're in the high end of that range if your income, before taxes, is greater than $75,000 or so.

The costs of parenthood
If you suspect your teenagers are eating you out of house and home, you might be right! Here's how those numbers break down:

  • Housing, including mortgage interest or rent, utilities, furnishings, and property taxes: $107,340.
  • Food, including groceries, dining out, and school lunches: $41,490.
  • Transportation, including vehicles, insurance, repairs, and public transportation: $38,670.
  • Clothing, from diapers to dry cleaning: $12,720.
  • Health Care, including out-of-pocket expenses and insurance not covered by an employer: $17,250.
  • Child Care and Education, including day care, babysitting, tuition, books, and supplies: $38,220.
  • Miscellaneous, including personal care, entertainment, and reading materials: $33,690.
  • Total: $289,380.

The scary thing is that these figures may actually underestimate your costs. The numbers report the average cost of raising the younger of two children. You'll have to take a look at the USDA's charts and add up your expenses by age if you have two kids. You can discount your costs (by multiplying the figures by 0.77) if you have three or more children. Multiply the numbers by 1.24 to find out the cost of raising an only child.

More bad news? These figures don't include the cost of a college education.

Beyond your pocketbook
Having children isn't just an economic decision, and you can't put any price on years of fun and joy or the satisfaction you'll get by raising your babies to become happy, productive adults. You also don't have to spend every penny from your paycheck -- and more -- to be a parent. Here are a few ideas to help you keep more of your money in your savings or retirement account:

Housing. Our homes have gotten bigger even as the average family size has been shrinking, and this spending category outweighs all the rest. Before you decide to move to a larger house to accommodate your growing brood, consider whether you can make do in your current home. If you just can't make everyone fit, look around for the smallest appropriate house or a more affordable neighborhood to keep these costs under control. Take a look in the Home Center to find out how much home you can afford.

Food. Here's a category where old fashioned family habits can save you a lot of money. Make as many family dinners as possible at home to keep the dining out and fast food expenses in check. Head to the grocery store with a list in hand. Investigate whether warehouse shopping makes sense for you, but don't assume that a Costco (Nasdaq: COST  ) or Wal-Mart (NYSE: WMT  ) Sam's Club membership will save you money -- you may walk out with more than you bargained for. Visit the Fool's Living Below Your Means discussion board for more ideas to trim the fat from your food budget.

Transportation. You may have grudgingly traded the red Mini Cooper for a minivan, and now you find yourself enviously eyeing the neighbor's new SUV. You can keep your lifetime transportation costs low by hanging onto that minivan as long as possible. Buy fewer new cars over a lifetime and you'll come out ahead. Find out more about Foolish car buying in the Auto Center.

Clothing. You'll have no choice but to make some room in the budget for diaper expenses, but keep the cost of infant and toddler clothing low by becoming familiar with your neighborhood garage sales and consignment stores. Most little ones grow out of those clothes before they're worn out. If your budget's being stretched by a fashion-conscious teenager who insists on contributing to the profits of retailers like Abercrombie & Fitch (NYSE: ANF  ) and American Eagle (Nasdaq: AEOS  ) , put them on a clothing budget. Working teens can supplement your spending with their own dollars.

Health care. Once that bouncing bundle of joy has arrived and you've called your mother, make your next phone call to your insurance company. Make sure your newborn gets added to your health insurance coverage as soon as possible. Then, if your workplace offers them, get very familiar with special savings accounts that let you cut your costs of braces, eyeglasses, and all those other health care needs, by putting money aside before taxes.

Child care. Child care costs can really strain already strapped parents. If you feel like you're spending your whole paycheck just to keep junior in day care, crunch the numbers -- you might be right. It might make more economic sense for one parent to cut their working hours or to leave work for a time to take care of the little ones. The combined cost of day care and work expenses may mean your job doesn't pay. For child care expenses you can't avoid, become familiar with the multiple tax breaks available and let Uncle Sam pick up part of the tab.

Related Foolishness:

Fool contributor Mary Dalrymple does not own stock in any company mentioned in this article, nor does she want to have to give up her Mini Cooper for a minivan (but she's probably in denial). She welcomes your feedback. American Eagle and Costco are Stock Advisor recommendations, while Wal-Mart is an Inside Value pick. The Motley Fool has a disclosure policy.


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