Cost of raising a newborn? $12,680, and that’s just the first year

WASHINGTON (NBC News) — The costs of raising children is up again.

The U.S. Department of Agriculture’s recent study puts the cost of raising a newborn through the first year of life at $12,680.

That’s lower than the estimates given by participants in a recent Bankrate.com survey.

“The average estimate was a little bit over $24,000 dollars,” says Bankrate’s Claes Bell.

Bell says financial advisors are especially keen on keeping parents aware of child-rearing costs so they can plan accordingly.

Another study by the Center for American Progress found that a 26-year-old woman who’s earning $44,000 a year and takes five years off to raise kids will lose more than $700,000 in lifetime income.

The costs of raising a child through age 17 is up to nearly a quarter of a million dollars, and that doesn’t include college.

A tad more encouraging finding about parenthood comes from a Washington Post poll that found 65 percent of parents had passed up a job, stopped working or switched to a less-demanding job to allow more time for caring for their children.

It’s not the strollers, baby clothes and toys that cost the most. The biggest cost by far is housing, which accounts for 29 percent of the extra costs of having a child. Food costs make up 18 percent of the calculation, while child care and education account for 16 percent.

And each child adds proportionately less, because kids can double up on rooms and in the back seats of cars.

“There are significant economies of scale, with regards to children, sometimes referred to as the ‘cheaper by the dozen effect,'” said USDA economist Mark Lino, who wrote the report.

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