Can you put a price on raising a family?

The U.S. Department of Agriculture (USDA) recently released its annual “Cost of Raising a Child” report. The news from it is really no news at all to us parents—kids are stinking expensive and growing even more so. However, if you read between the lines, there are three extremely important points that don’t show up in the executive summary:

1)   Parents still have a choice. The USDA estimates that households with less than $61,530 in income will spend a total of $176,550 per child. Meanwhile, “middle-income parents” making between $61,530 and $106,540 each year can anticipate spending $245,340 per kid. Those blessed with household income over $106,540 should expect to spend $407,820. 

Here’s how I read these numbers: It likely costs approximately $175,000 to care for a child’s needs in today’s dollars. Beyond that, it’s our choice as parents if and how we spend additional money on our progeny. When your household income jumps from $106,000 to $107,000, the USDA isn’t holding a gun to your head and demanding that you spend an additional $162,480 per child.

It’s completely up to you, and you may choose to spend more or less than some of the USDA estimates. For example, you may choose (wisely) to spend more on one child than another for various, justifiable reasons, including each individual child’s own gifts and weaknesses. If you choose to put even one child through private school, from kindergarten through a graduate degree, you could easily spend a million bucks just for education—and college isn’t even included in the USDA’s numbers.

It’s not how much you spend but how you spend it—and whether you can afford it—that’s important.

2)   It’s important to introduce children to the realities of money early. The cost of being parents shouldn’t be a taboo topic with our children. In fact, children should be introduced to the reality of money and the cost of living as early as they can comprehend it.

As they age, we should give our children more and more information and put more control in their hands. Money was—and still is for many—a taboo topic, and that needs to change. I’m not suggesting you share everything about your financial world with your kids. But find a way to help them understand that they are their own ecosystem, albeit one that resides within your family.

I recently discussed this topic on the PBS “Nightly Business Report.”

3)   Couples who avoid this topic do so at their peril. More than 50% of marriages end in divorce and more than 50% of those couples list financial disagreements as the primary reason for their breakup. The emotionally charged decisions we make, and specifically those decisions related to our children, provide the perfect context for serious disagreement. So, if you want to give your marriage a sporting chance, openly discuss and specifically plan for child-related expenses.

I’ll never forget having coffee with a mentor of mine about 11 years ago and discussing this topic. On a personal level, my wife and I were ready to begin a family, but as a financial planner, I didn’t feel like we were prepared.

“You’ll never feel like you’re ready,” my mentor told me. “No matter when you decide to do this, it will be a leap of faith.” Our boys, Kieran and Connor, just started the fifth and third grades, respectively, and I must say I’m forever grateful that I followed the advice of my mentor.

Choosing to start a family is about a great deal more than financial readiness and planning, but your marriage and your children will be better for it.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you’d like to receive my weekly post via email, click HERE.

This content originally appeared August 20 on Forbes.com

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© 2014, The BAM ALLIANCE

Tim Maurer, CFP®

Tim Maurer, CFP®, is a Wealth Advisor at Buckingham and also serves as our Director of Personal Finance. Tim’s second book, co-authored with best-selling author, Jim Stovall, is The Ultimate Financial Plan: Balancing Your Money and Life. He is a CNBC contributor and also writes weekly for Forbes.com. He is a graduate of Towson University.

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