How Much Does It Cost to Raise a Child?
The costs parents should expect when raising a child.
The cost of raising a child can be steep, and parents need to be prepared for the ongoing expenses that come along with having kids. A Brookings Institution analysis of data from the U.S. Department of Agriculture (USDA) estimates that a family spends about $310,605 from the time the baby is born until the day they turn 18. That’s about $17,000 per year. Though co-parents may share the cost of raising a child, it’s still a large cost to bear, and many may be operating as single parent households.
Factors that influence how much it costs to raise a child according to the USDA include:
- How many children you have
- The age of your children
- Your marital status
- Which part of the country you live
- Your household income
Housing is the number one expense for raising a child no matter how much money you make or whether you are single or married. Data from the USDA shows that low-income families spend about 8.7 percent of their income on housing a child, middle-income families spend about 4.5 percent, and higher-income families spend about 2.9 percent.
It’s not surprising that location makes a significant difference in the average cost of raising a child. If you live in a big city in the Northeast, expect to pay the most. Choose to live in the Midwest, and the costs of raising a child go down by about 27 percent. This is because housing, childcare, and education are generally less expensive there.
Do single child families spoil their only child? Based on the data in the USDA report, the answer is yes. Expenditures of married-couple households with only one child average 27 percent more than spending per child in a two-child, married-couple home. On the other hand, as you add more kids to the family, the average cost to raise each child goes down. The numbers show that for families with three or more children, per child expenses average 24 percent less for each child than a child in a two-child family.
Food is the second largest expense for families in the lowest and middle-income groups. For high earners, childcare and education are the second-highest expense. The third-largest expense for low-income families is transportation. For middle-income families, the third-largest cost was childcare and education, and for high-income families, it was food.
The bottom line is that children aren’t cheap. Parents must practice sound financial planning when budgeting for their families’ needs. If you and your co-parent are looking for additional financial information or tips, check out the finances section of our parenting resources page.