I received the best press release of the year from Edmunds.com -- a comparison between the cost of kids, and the cost of keeping a car!
Their press release comes as the government releases a report showing it costs an average of $11,337 per year to raise a child for 18 years. What do popular cars cost per year? You might be surprised at . . .
these numbers from the Edmunds.com press release!
Do you think it’s more expensive to raise a child or own a car? Well, it depends on the car!
A quick look at the Edmunds.com True Cost to Own tool at http://www.edmunds.com/apps/cto/CTOintroController indicates that it costs about:
· $7,182 per year to own a 2008 Toyota Camry for five years (see http://www.edmunds.com/new/2008/toyota/camry/100900018/cto.html?setzip=19081&vdp=off for details)
· $10,108 per year to own a 2008 Ford F-150 for five years (see http://www.edmunds.com/new/2008/ford/f150/100903333/cto.html?setzip=19081&vdp=off)
· $14,176 per year to own a 2008 Mercedes E-Class for five years (see http://www.edmunds.com/new/2008/mercedesbenz/eclass/100931589/cto.html?setzip=19081&vdp=off for details)
· See http://www.edmunds.com/apps/cto/CTOintroController or call on us for more automotive examples…
(Edmunds.com True Cost to Own takes into account average depreciation, financing, insurance, fuel, maintenance, repairs, taxes and fees…not entirely dissimilar from the expenses associated with raising a child!)
Again, here's the link to find out the cost of your car: http://www.edmunds.com/apps/cto/CTOintroController
Sorry, I no link to what it costs to raise a child -- but I think the govt stats are way low! What do you think???
Terry Savage writes a syndicated personal finance column for the 
Hi TErry,
What are your thoughts on refinancing to clear credit card debt?
SAVAGE SAYS: For years I warned against pulling equity out ofyour home to pay down credit card debt -- because most people just charged up their cards again! The industry even has a term for it: "re-loading."
Now, if you still have equity in your home, and you take some of it out to pay down your bills, be sure that you:
1. Lock in a fixed rate mortgage
2. Try to cut your mortgage repayment time to 15 year instead of 30 -- check to see if you can afford the higher payments.
3. Don't take a home equity loan to pay your credit card bills, because if rates rise you'll be in trouble.
And finally, have you though about you, or someone in your family, getting a part time or weekend job to earn extra money to pay down those bills? Do it now, before many unemployed workers are competing with you. Terry
Good afternoon,
I was checking out the blog and found this article.
My take is this: Cars are too costly. Period. Unless wealthy, almost everyone would be better off with an affordable used car. Of course, if this idea became popular, the economy would be destroyed.
SAVAGE SAYS: Not to mention that cars depreciate over time. But kids are supposed to "appreciate"! At least, the are supposed to appreciate the good home you gave them, the education you paid for, etc! And maybe they'll appreciate you enough to help you out in your old age. Surely your rustbucket car won't do that!
Hello Terry Savage!!
Long story short! I am a single mom of two and the bulk of my
paycheck goes toward afterschool/daycare expense. My Visa is about to explode. How do I get out of this creditcard nightmare? I do not want to borrow from my 401K but what real choice do I have?
SAVAGE SAYS: Borrowing from your 40lk account is not a solution to your problem. First, you'll pay a 10% penalty, and taxes on the withdrawal. Second, you'll be in the same position again a year from now when the taxes are due.
The real fix is to go over your budget and figure out how to make your lifestyle work on your income -- or how to increase your income to match your lifestyle. (That is not to suggest that you're leading an extravagant lifestyle, which would make it easy to find cuts!)
You need personalized help on this. Call Consumer Credit Counseling Services at 800-388-2227, which will connect you to the nearest local office. Make an appointment to talk to them -- It's free, and they're non-profit. They can go over your spending (so be sure to track all your spending) and help you decide how to proceed.
And post another comment, please after your meeting, to tell me what they suggested!
Kids appreciate (in general, in a financial sense, and through age 18), unlike cars. Though 'resale value' isn't exactly applicable.
SAVAGE SAYS: Kids my "appreciate" -- but they don't really start "appreciating" all you've done for them until they "mature" -- sort of like a 30 year Treasury bond! Triple A rated, though!!
The cost of an extra bedroom for the kid in California is at least $600 per month, or $7,200 a year.