Sunday, September 2, 2012

The Expense of New York Babies

A study has shown that raising a baby in New York City is the most expensive place.  According to Bundle, parents will have spent approximately $1m on their children by the time they move out.  This figure is almost twice as much as the average state in America.  The fact that the city is home to exquisite (and pricey) toy stores like FAO Schwartz, Toy Tokyo and Kid Robot.   But what might come as quite a surprise is that Minneapolis and Tulsa – places that don’t have the kind of allure New York City does – has a bill of $600,000+.

So what should a parent do if they want to significantly slash their child-rearing costs?  Moving to Madison, WI, could help.  The average cost of raising a child there is a mere $200,000.  Milwaukee and Indianapolis aren’t bad choices either for keeping on a budget.

Given this data, it would seem that parents would try to limit the spending they can control, on their offspring.  But this isn’t the case.  Indeed, in another survey conducted, New York City was at the top of the list for parents who spoil their kids the most.  But perhaps this figure was impacted by some of the city’s more extreme shopping sprees, such as those endured by Beyonce and Jay-Z who clearly wanted the best for their babies.  The crib came in at $3,500 and the bathtub – studded with diamonds – cost $5,200.  The nursery measures 2,200 square feet.

Brooklyn ranks as no. 2 for the kids who get the most (in terms of money spent that is).  What is now popular in the borough are the cafés like Sit and Wonder that offer babyccinos – small decaf cappuccinos or frothy steamed milk and foam – a trend that began in Australia around 10 years ago.  Brooklyners were able to enjoy the beverage starting from a few months ago. Although there has been criticism on the drink.  Paul Caligiore, an Australian coffee expert, argued that the beverages: “interrupt workflow, create milk wastage and can be served at a dangerous temperature to a vulnerable consumer.”

Expensive Babies: Impact on the Economy

But if it is becoming so expensive to raise children, how are potential parents reacting to this?  Some people are deciding not to have kids altogether because of the expense.  They have been especially turned off the idea following the 2008 financial crisis which has taken away the option of retirement for many people.  Indeed, according to the National Center for Health Statistics, in 2011, the amount of births dropped to a 12-year low.  This has negatively impacted spending so greatly that industries from pregnancy kits to education and everything-in-between has lost out. It makes sense that consumption increases when people have children.  But the question is, just how much does it have to go up?  Hopefully it will not be on the same scale as New York City so that it becomes unaffordable, overwhelming and thus off-putting for people to start a family.