With a husband working strictly on sales commission in a down economy, money has been tight for several years now for Laura Sowa. The Nashville woman works hard to keep things as normal as possible for her two daughters, but these days "normal" is being redefined. This hit home for Sowa recently as she listened to the girls playing "shopping trip" in the next room.
"It's so funny," Sowa says. "Samantha will tell Emily, 'No, you can't buy that today. It's not on sale.' Then Samantha will make coupons for Emily to use and say, 'Now you can buy it.' They both know you never pay full price for anything."
Child's play mimicking real life—mom is an inveterate coupon-cutter, bargain hunter and all-around economizer. Times are tough for millions of families like the Sowas, and the cost of raising kids just keeps going up.
According to the latest statistics released by the U.S. Department of Agriculture, parents will spend an average of $235,000 to raise a child born in 2011 to the age of 17. (And that's not taking into account any savings for college).
Housing, food, clothing, health care, child care, schooling ... the list of compulsory expenses goes on and on. Discretionary spending such as family vacations, birthday gifts, music lessons and the like are mostly extra.
Couple this whopping $235,000 with the recent, sudden downturn in the American economy, and families are facing challenges unseen in generations.
"It does give some people pause," says Dr. Joyce Cavanagh, a family economics specialist and associate professor with the Texas A&M AgriLife Extension in College Station. "Every year when this study comes out, there are people who think, 'Whoa, that's a lot of money. What are we getting ourselves into?'"
The numbers in the USDA's report are eye-opening.
The $235,000 figure is an average. For the lowest income groups, raising a child will cost about $212,000. For the highest earners, the number shoots up to $490,000.
The greatest share of these expenses is housing, which is 30 percent of the total. It's followed closely by child care and education at 18 percent and food at 16 percent.
"Because of the economic insecurity of life today, there are some tough trade-offs that families are having to make," says Ellen Galinsky, president of the Families and Work Institute in New York City. "These aren't luxury trade-offs, like not getting the fanciest strollers. These are food and 'who's going to stay with my child' issues for so many families."
Indeed, who is going to stay with the kids is one of the biggest financial hurdles parents face. In 1961, when the USDA's Expenditures on Children by Families report was first issued, child care and education costs amounted to only 2 percent of the overall cost. Today, that number stands at 18 percent.
Rebecca Sutton of Belvidere, N.J., has two sons—Landon, 4, and Brody, 4 months—with her partner, Jared Coffin. When the couple found out they were having a second child, they started doing the math and the result shocked them.
"Our day care expense for just our older son was over $1,000 a month," Sutton says. "If we had put our younger son in day care as well, it would have been about $2,200 a month. That was more than our mortgage payment."
The couple knew they couldn't afford it and made a tough choice. Sutton returned to her job as an online marketing manager while Coffin, an electrician by trade, quit his full-time job in order to stay home with the kids. He picks up side work here and there, but being a dad is his primary focus.
"He's really getting into his groove now," says Sutton. "He's enjoying spending time with both kids."
For much of the past decade, Josh Bevington was living the high life. A successful real estate agent in one of the hottest markets in the nation, he whipped around town from open houses to closing transactions. He had a thick portfolio of clients and was helping buy and sell dream homes in southwest Florida.
But in 2008, the American economy began to struggle; the bottom dropped out of the housing market and few places were harder hit than the Gulf Coast of Florida.
"We would joke around the office that we were working twice as hard for half as much," Bevington recalls. "The membership at the local board of realtors decreased by half as a lot of agents got out of the business."
As the market constricted, so did Bevington's family finances. With three young children at home, Josh's wife, Caroline, tried to return to full-time work as a pediatric physical therapist. But money woes had hit local hospitals and the hours weren't there.
So Josh and Caroline sat down with their household budget and began making tough decisions. Gym memberships? Canceled. A treadmill? Sold online for extra cash. Running outside was free. Old cars were kept longer than planned. Friends and family helped out with baby-sitting.
Financial experts say the Bevingtons took the right steps when money issues appeared.
"That's one of the bright spots of these hard economic times," Cavanagh says. "We have seen more families developing a budget or a spending plan. That's a first step—to become more aware of how they are spending money."