May 24, 2024


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How Much Does It Cost to Raise a Child?

Kids aren’t cheap. That’s the consensus among both the government and parents, but exactly how much they cost is up for debate.

For years, the U.S. Department of Agriculture published an annual report that calculated the average cost of raising a child to adulthood, not including college expenses. That report hasn’t been undated since 2017, but at that time, it found the cost of raising a child born in 2015 was $233,610. That assumes the child was born to a middle-income, married couple. When adjusted for inflation, the number jumps to $267,233 in 2021 dollars, based on data from the Bureau of Labor Statistics.

“I can’t even think about that much money,” is the reaction of Leah Groves, a single mother of two in Lowell, Michigan. For parents like Groves, the prospect of paying that much to raise children isn’t just daunting; it may not even be possible. “I can’t afford child care,” she says. Instead, the 31-year-old works from home for a nonprofit organization and recently picked up a part-time job at the local YMCA specifically because it offered child care as a work benefit.

The USDA found that in 2015, single-parent households spent an average of $172,200 — more than $60,000 less than their married peers. When adjusted for inflation, that figure increases to $196,984 as a solo parent’s current cost to raise a child to 18.

The government numbers aren’t necessarily reflective of all families’ experiences, though. There are a number of circumstances and choices that can increase or decrease the cost of child rearing. As Groves notes, “You can provide a simple, good life for much less.”

[See: 15 Money-Saving Tips for Big Families.]

How Much Does It Cost to Raise a Child?

The USDA came to its figures by using data from the annual Consumer Expenditures Survey. It found the cost of raising kids can also vary by region, with the Northeast being the priciest location in the nation.

For children born in 2015, average spending breaks down into the following percentages, according to the USDA:

— Housing: 29%

— Food: 18%

— Child care and education: 16%

— Transportation: 15%

— Health care: 9%

— Miscellaneous: 7%

— Clothing: 6%

As for how much does a child cost per year, the USDA estimate breaks down annually to $14,846 in 2021 dollars for a middle-class, two-parent household.

In 2019, LendEDU, an online marketplace for financial products, surveyed 1,000 parents who had a child between the ages of 1 and 3. They were specifically looking for how much does a baby cost and discovered parents spent an average of $13,186 during their child’s first year, although the median cost was only $6,000.

Meanwhile, the nonprofit Economic Policy Institute used 2017 data to determine how much families throughout the county need to spend to maintain a modest, but adequate, standard of living. In the Los Angeles metro area, adding a child to a two-adult household could be expected to raise annual costs by $24,236. Even in the Kansas City metro area, where the cost of living is significantly lower, one child could be expected to add $17,869 to the family budget.

While average costs can be helpful for budgeting purposes, they can also paint an overly bleak picture of parenting. Many parents can and do spend significantly less. “It’s OK to not be giving your kids what Instagram says you should be,” Groves says.

Factors That Influence Child Raising Costs

While cost estimates can be a helpful benchmark for parents, they may overstate certain costs while ignoring others. “Cost of living and family support are things you have to consider,” says Anthony Paul, managing director and co-founder of The Hamilton Group, a financial planning firm in Greenwood Village, Colorado.

Grandparents nearby who are willing to babysit for free can all but wipe out child care expenses. Meanwhile, monthly mortgage and rent payments may be lower for those living in states with affordable housing, such as South Dakota and Michigan.

However, there are trade-offs to living in some states with a lower cost of living. For instance, Michigan parents need to buy clothing appropriate for four seasons, says Michael Foguth, a father of six and founder of Foguth Financial Group in Brighton, Michigan. “With kids, you have to buy winter boots and coats every year,” he notes.

As kids age, they may have added expenses for school activities, sports teams and electronic devices. One way to minimize these costs is to ask teens to find a job and pay for their own discretionary expenses, Paul suggests.

[Read: What Child Care Costs and How to Save.]

Are You Able to Afford a Child?

While couples often discuss whether they can afford children, Foguth doesn’t think parenthood should be reduced to a financial decision. Rather than asking if you can afford children, a better question may be whether you are willing to shift money away from your current expenses in order to accommodate the needs of a child. “Are you willing to make financial sacrifices for someone else?” Foguth asks.

There are immediate costs associated with the birth or adoption of a child that couples can anticipate. However, after that, parents usually have significant flexibility in how much or how little they spend on their kids.

Having multiple children can raise costs but perhaps not as much as people expect. Parents may already have a home and vehicle large enough to accommodate multiple children. Child care providers may also offer sibling discounts. Plus, clothes and toys can be passed down to younger siblings, and food that is purchased in bulk can result in a lower per-serving cost.

In some cases, parents find that what they thought would be expensive is not. “For some reason, I thought I would be paying an arm and a leg all the time to go to the doctor,” Groves says. However, that has not been the case since her boys — in first grade and preschool — are covered by their father’s health insurance policy, making out-of-pocket costs minimal.

[Read: How to Save Money for Your Kids.]

Budgeting for Baby

For would-be parents, the various numbers come with bad news and good news. The bad news is that the savings they have prepared in anticipation of a baby might not be enough. However, the good news is there is a wide variation in the cost estimates because so many expenses can be optional.

Rather than buying expensive gadgets, upsizing the house for more space and insisting on new items, parents can keep costs down by making due with what they have already. Paul, who has three daughters, encourages people to consider buying secondhand, maximizing the use of grocery savings apps and rethinking expensive family vacations.

Rather than fill your house with toys, he recommends asking relatives to donate to a child’s college fund instead. “(Toys are) literally a vacuum for your wallet,” Paul quips.

Limiting extracurricular activities can also rein in expenses. “It’s OK if your kid is not involved in a sport or activity every season,” Groves says. And she too is a fan of buying secondhand whenever possible, saying, “Buy that saucer from Craigslist for $5.”

Kids don’t have to be as expensive as the numbers suggest. Couples should honestly evaluate not only their finances but also their commitment to sacrificing creature comforts for the sake of raising children. For those who make the leap to parenthood, they may find there is ultimately only one word to describe the cost of kids: priceless.

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