This is according to an article at CNBC about the expense of the first year of child rearing:
Considering car seats, cribs and all those animal crackers, parenthood comes with a lot of expenses.
With rising costs from child care to college, many first-time parents aren’t financially prepared from the start — no matter how much money they make — according to a recent report by NerdWallet.
The personal finance site analyzed the expenses of a baby’s first year in two sample households — one with a $40,000 annual income and one with a $200,000 income — to illustrate how families with different resources might cope with all of the expenses associated with a bundle of joy (including food, housing, transportation, diapers and health care).
In both cases, expectant parents, including those currently pregnant and those planning to have a child in the next three years, dramatically underestimated the costs right out of the gate: More than half of would-be parents believed the first year will cost $5,000 or less.
In fact, the first year of parenting is substantially more — just over $21,000 in a $40,000-income household and nearly $52,000 for families making $200,000 or more, according to NerdWallet.
I am always amazed by these predictions about how much raising kids will cost. How in the world does a $40,000 a year household pay over $21,000 for a kid? Do they borrow from family? Get government help? Eat beans and rice? Who can afford kids with all these expectations? Is this amount even remotely true?