The Million Dollar Kid

This weekend's Wall Street Journal includes a piece about how much people spend on their children. They only focus on those in the top third income bracket, so as one would expect, there is some pretty shocking stuff here. The USDA estimates that the total cost to raise a child born in 2005 to these top earners is $279,450. I was unable to find any data this recent on the USDA web site, but there is some corroborative information on MSN Money. The WSJ says that the richest of the rich, so-called "Platinum" parents, spend up to $1.6 million to raise a child. Yikes!

Some of the extreme spending examples are incredible: $800 strollers, $1,000 birthday parties, etc. Other tidbits:

• Half of American teenagers own an MP3 player, and they each spend an average of $361 annually on iTunes downloads
• One in ten children now attends a private school
• The average domestic one-week vacation costs $1,830, and the average trip to Disney World is over $5,000 (uh... I think we'll skip that, thank you)
• Nearly two out of three teenagers has a cell phone
• Average cost of a 4-week summer camp is $3,000
  

After fifteen years in the toy industry, I am no longer surprised at the lengths to which some parents will go to give their children a "complete" experience or a competitive "edge." I've encountered my share of these parents over the years. In some cases I believe it actually reaches the point of child worship. Remarkably, though, most of the kids who don't have all these "advantages" seem to turn out just fine or better than the ones who "have it all."

To the immediate north of us is a very wealthy community, and just to our south is one that is decidedly middle class. Our city has people who would fit comfortably in either of these towns and a lot of people in between. Economically, we're a pretty heterogeneous community.

As I look at my kids' friends and get to know their parents, things generally seem pretty well balanced here. There are overactive over achievers and couch potato underachievers, and there seem to be some at each end of the economic spectrum of our community.

There's a Cost of Raising a Child Calculator on BabyCenter. It only goes back as far as birth year 1999, which is when Jack was born. Including college, it estimates that it will cost us $466,828 to raise Jack. They break the expenses down by category, it's actually somewhat believable. There are no splurge items listed.