Many parents worry about saving for college, but don’t forget about the proceeding 17 years! Food, clothing, shelter, and other necessities will cost $234,900 for a child born in 2011 to a middle-income family.

Today the the U.S. Department of Agriculture released their annual report where they total up the cost that parents pay to raise a child from birth to age 17.

• The annual expense per child ranges from $8,760 to $9,970 on average (depending on age) for households with an annual income less than $59,410.
• The annual cost increases to $12,290 to $14,320 for households with income up to $102,870.
• The annual cost increases yet again to $20,420 to $24,510 for households with annual income greater than $102,870.

Housing, childcare & education, and food comprise 64% of the expenses.

Family expenditures on a child, by income level and age of child (CLICK TO ENLARGE)

It’s interesting to compare the costs of raising a child born in 1960 (the year the USDA study first started) to a child of 2011.  The total cost has increased 22% from $191,723 in 1960 (in 2011 dollars) to $234,900 in 2011.

• Food has decreased from 24% of the cost in 1960 to 16% in 2011
• Clothing has shrunk from 11% in 1960 to 6% in 2011
• Childcare & education has surged from only 2% in 1960 to 18% in 2011
• Healthcare has doubled from 4% in 1960 to 8% in 2011

Expenditures on a child from birth through age 17, total expenses and budgetary component shares, 1960 versus 2011 (CLICK TO ENLARGE)

Very informative graphic from the Washington Post as to why a coronary bypass costs $68,000 in the US versus $25,000 in Switzerland:

Click for larger interactive graphic

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“People are remodeling instead of moving” according to David Crowe, chief economist of the National Association of Home Builders.

The key to this are the huge number of current homeowners who either are unable to sell their currents homes, or if they do, no longer will qualify for a new mortgage, or lack a 15-25% down payment for another purchase in order to move.

During Q3 2011, homeowners took out $5.3 billion in home equity/refinancing. That has been driving some of these renovations.

Regardless, housing will remain a dark spot in the economy for an extended time.

From Trulia’s database of home searches, based on their web traffic from 2006 through 2011:

click for timelapse

The top 1 percent of American earners controls as much of the nation’s total income as it did on the eve of the Great Depression. Now, however, their money comes from skyrocketing paychecks more than from unearned income, as it did in 1928.

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Source: The New York Times

The latest data on employment and wages are out and it’s not good:

The figures from payroll taxes reported to the Social Security Administration on jobs and pay are, in a word, awful.

There were fewer jobs and they paid less last year, except at the very top where, the number of people making more than $1 million increased by 20 percent over 2009.  The median paycheck — half made more, half less — fell again in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999.

The number of Americans with any work fell again last year, down by more than a half million from 2009 to less than 150.4 million.

Source:
First look at US pay data, it’s awful
David Cay Johnston
Reuters, 10/19/2011