Image: Baby © Nicole Hill, Rubberball Productions, Jupiterimages

Related topics: budgeting, bills, family, love and money, raising children

Every newborn child is a bundle of joy. But you'd better have a bundle of cash on hand if you want to raise one.

Typical families, those making from $56,670 to $98,120 a year, will spend a whopping $222,360 to raise a second child born in 2009 through age 17, estimates the Center for Nutrition Policy and Promotion (.pdf file), a division of the U.S. Department of Agriculture.

Higher-income families will spend even more. Those earning more than $98,120 will spend $369,360 overall in the U.S. to raise a second child; that figure rises to $411,210 in urban areas of the Northeast.

Though not as steep, the figures for lower-income families are just as unsettling: $160,410 for families making less than $56,670 to raise a second child.

That averages $8,912 a year for a lower-income family, $12,353 for the middle-income group and $20,520 for top earners.

This is no back-of-the-envelope guesstimate. The survey involves interviews with about 5,000 households, four times a year.

The cost per child goes down for larger families. A child with no siblings costs 25% more than one with a sibling, for example. As a percentage of household expenditures, an average couple will spend 27% on an only child, 41% on two children and 48% on three children, the USDA estimates. As the child ages, costs dip from their earliest years to the period when they are 3 to 5 years old, then rise steadily until adulthood, reaching $23,180 a year from ages 15 to 17 for the highest income earners.

Sobering? No doubt. Misleading? Yes. The study doesn't take into account certain expenses incurred by some families, such as heavy medical bills or pricey private schools. It's a composite average, and, by definition, that means your numbers will be a little (possibly a lot) higher or lower. And because the survey ends at age 17, it doesn't take into account the millions of college students who are supported in part or in full by their parents. In 2020, you'll need nearly $225,000 for a private college or $105,000 for an in-state public university.

The study also doesn't consider lost income that occurs when one parent stops working or takes off several years to raise the children during the early years -- or takes a lesser-paying job with more-predictable hours.

Before you take a vow of celibacy, look on the bright side: There are ways to trim the expenses.

The study breaks down overall expenditures into various categories and subsections. (The information is used by state agencies and court systems to determine child-support guidelines and foster-care payments, among other things.) We'll go through each of the major categories, give the total expense for families from the low to high ends, and then offer cost-cutting ideas and some tax tips from our tax expert, Jeff Schnepper.

Housing

Cost through age 17: $53,280 to $126,540

Housing is the biggest single expense of raising children, comprising a third of overall annual expenses.

What you can do

You could ignore one of the basic assumptions used in calculating additional housing costs. You could decide not to move into a larger home. The table assumes that for each child you have, you're going to add 100 to 150 square feet of living space to your home. By definition, that means you're going to either renovate your existing house or buy a new one. Go against the flow and figure out how to use the space you've got.

For many families, that solution won't get it done. Try this: If you've had your mortgage for a while and plan to stay in your home, keep track of mortgage rates and consider refinancing when the rate is more than a percentage point below your current mortgage. It can save hundreds to thousands of dollars on the loan.