Many of us are excited to have a new member of the family. Most married couples dream of having children and raising them to become strong and responsible individuals.
Having a child marks a new chapter in someone’s life. A chapter that is exciting, challenging and rewarding all at the same time. Raising your youngster entails planning and preparation. In fact, it needs financial readiness.
We ask, “What is the Cost of Raising a Child?” The United States Department of Agriculture can answer this question.
The Cost of Raising a Child
In the USDA’s report, The Cost of Raising a Child, the department has tracked the expenditures associated with raising a child since the early 60’s. This analysis looked at the costs influenced by the child’s age, household income, budget and location.
Based on the most recent data, in 2015, a middle-income couple with two children spends approximately $12,980 per year on each child. This is according to the Consumer Expenditures Survey.
The same survey says that to raise a child born in 2015, married couples may spend $233,610 (inflation not factored in) until the young one reaches the age of 17.
If you break down the expenses, shelter/housing accounts for 29 percent of the costs; taking up the largest share. At second place is food which is 18 percent. For those parents who have childcare or education expenses, it comprises 16 percent of the total child-rearing costs. The remaining 37 percent comprises the other necessities needed in raising a child.
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The Importance of Home
A home is one of the most important aspects couples and single parents need to consider when raising their little ones. The house itself, as a physical structure, provides safety and security from potentially harmful physical elements. The house as a home provides a sense of belongingness and physiological and emotional security. All of these factors are important in child-rearing.
A clean, safe, modest and decent dwelling provides children and the whole family a familiar and personal space to grow, explore and mature as individuals. The neighborhood where the house is situated also greatly influences the child’s development. These things go beyond the matters of money. Choosing the right house is as important as allocating the right budget.
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Modest and Decent Homes Thru USDA Loan
For couples who have been struggling to finance a decent and safe home, they can find affordable financing through the USDA home loan.
The USDA offers low to zero down payment options. To qualify, borrowers must have sufficient, good credit and low debt to income ratio. The primary target of this home financing program are households belonging to the low- to middle-income brackets.
For USDA guaranteed loans, it is the USDA-approved lender who determines how high or low the interest rate is. This is done during the underwriting process. For individuals applying for the USDA Direct Housing Loan, the current interest rate is at 3.25 percent (As of November 2017).
Financial readiness is crucial when a couple or individual plans to raise a family. While money isn’t the only thing that matters, it can be an instrument to ensure that a child grows and develops to be their best and the way they should be. Moreover, the home is the first place where a child develops their cognitive and social skills. It is the parents’ responsibility to ensure that they are sheltered, safe and secure.