How Much Does It Really Cost to Raise a Child?

Key Takeaways

Housing (29%), food (18%), and childcare/education (16%) are the largest contributors to the overall cost of raising a child.
Geographic location and household income significantly impact child-rearing expenses, with families in urban areas and high-income families typically spending more.
Hidden costs like technology upgrades, medical emergencies, and extracurricular supplies can add up over time.
Raising multiple children tends to lower the cost per child, though cumulative costs still grow, especially for education and extracurriculars.
Inflation continues to increase child-rearing costs, affecting everything from food to college tuition.
Creating a savings plan early, such as a 529 College Savings Plan, helps cover long-term expenses like college, reducing financial stress.
‍

Raising a child is no small investment. The most recent data, from 2017, found that it would cost roughly $233,610 on average and includes necessities like housing, food, childcare, and education, but it doesn’t factor in the cost of a college education. This figure does not account for the increased cost of living experienced by families over the last seven years, and more recent estimates have the new total at $331,933 in today’s economy.

Many families also face additional costs they don’t see coming, like extracurricular activities, medical emergencies, and, of course, inflation, which can substantially increase the cost of raising children over time.

What you spend can also depend on where you live and how much money you make. Families in expensive states like California or New York tend to pay more for housing, food, and transportation, while families in rural areas may have lower costs in some categories but higher transportation or childcare expenses. A Brookings Institution study suggests that these geographic differences can really add up, which means some families in urban areas spend significantly more than the national average.

‍

Monthly and Yearly Expenses

‍

Breaking child-rearing costs down by monthly and yearly expenses helps to make the numbers less overwhelming. Here's a typical breakdown of these annual costs for an average family:

Housing (29%): Housing is often the largest expense when raising children. You may need to move to a bigger home or apartment to accommodate your growing family, which increases rent or mortgage payments. Utility costs often rise as well.
Food (18%): Feeding a child from birth through adolescence isn’t cheap. You’ll start with formula or baby food, then progress to solid meals, snacks, and eventually the massive appetites of teenagers. Buying food in economical quantities can help save a lot in the long run.
Childcare and Education (16%): Daycare, preschool, after-school programs, and extracurricular activities can quickly eat into your budget. Although this can vary widely depending on your location and choices.
Transportation (15%): Getting kids to and from school, soccer practice, and other activities means higher gas bills and more wear and tear on the car. For families in cities, transportation costs might include public transit passes, taxis, or ride-share services.
Healthcare (9%): From routine checkups to unexpected medical bills, healthcare is another major expense. Insurance premiums, co-pays, and out-of-pocket expenses for things like glasses or braces all add up.
Clothing (6%): Children outgrow clothing quickly, which means frequent purchases of new clothes. Seasonal changes and school uniforms can also contribute to these costs.
Miscellaneous (7%): This category includes expenses like toys, books, entertainment, and other day-to-day costs that don’t fall into the other categories.

‍

Breaking It Down by Age: From Diapers to Driving Lessons

Prenatal and Delivery Expenses

The expenses begin before your child is even born. Between prenatal care, vitamins, and delivery costs, the bills can start stacking up fast. The cost of delivering a baby in a hospital can range anywhere from $5,000 to $11,000, depending on insurance coverage and complications. If you opt for a midwife or birthing center, those costs may be a bit lower, but they can still be significant. You’ll also need to set money aside for prenatal visits, tests, and other necessities during pregnancy.
‍

Infant and Toddler Years (0-3)

The first few years of life are packed with costs that add up quickly. From diapers to baby gear to childcare, the expenses are ongoing. Many families face the decision of whether one parent should stay home to avoid full-time childcare costs or continue working and pay for daycare or a nanny.

Diapers: Expect to pay around $70-$80 per month for diapers.
Formula: If your baby uses formula, this can add another $50-$150 per month, depending on the brand.
Childcare: Childcare costs can be a huge chunk of your budget, ranging from $700 to $3,000 per month, depending on where you live and what type of care you choose.
‍

Early Childhood (4-8)

As your child grows, you’ll still need to cover essentials like food, clothing, and health care, but education starts becoming a major factor. Preschool, after-school programs, and other activities start to take a bigger slice of the household budget.

Preschool tuition: This can vary widely but typically costs between $4,500 to $13,000 per year, depending on your location and whether the school is public or private.
Extracurricular activities: From sports to dance to art classes, these activities can cost between $500 and $2,000 annually, depending on how involved your child gets.
‍

Middle Childhood (9-12)

Middle childhood often comes with more structured activities, like sports teams, clubs, and summer camps. Technology costs may also start creeping up, as many kids at this age need devices for schoolwork and social activities.

Food costs: At this stage, expect to spend more on food—about $200 per month as their appetites grow.
Clothing: Kids grow fast, and you may need to allocate as much as $50 to $100 per month for new clothes and shoes.
‍

Teen Years (13-18)

Teenagers bring their own set of financial challenges. Along with the basics, you’ll likely be spending more on car expenses, extracurricular activities, and prepping for college.

Car expenses: If your teen is driving, you’ll need to account for the costs of a second car, gas, insurance, and maintenance, which can add up to an average annual cost of $3,000 to $5,000.
High school and extracurriculars: Even if your child attends public school, you may still need to budget for extracurriculars, sports fees, and private tutoring, which can cost several thousand dollars per year.

‍

Surprise Costs of Raising a Child

There are plenty of expenses that sneak up on parents. These hidden costs can include everything from medical emergencies to extracurricular supplies and technology. For example:

Technology: As kids get older, they’ll need laptops, tablets, and other gadgets for school. This can add several hundred dollars per year in upgrades and repairs.
Medical Emergencies: Unexpected health issues can lead to medical bills that go beyond regular checkups and vaccinations. It’s always a good idea to set aside some money for these moments.
Extracurricular supplies: Sports teams, band, and other activities often come with their own sets of gear and uniforms, which can add hundreds to your annual costs.

The Cost of Raising Multiple Children

If you have at least two children, you might find that the overall cost per child decreases a little, thanks to hand-me-downs and shared resources. However, the additional child costs can still add up. While the USDA estimate suggests that the expense of raising each additional child is lower, families often find that miscellaneous expenses like extracurriculars, clothing, and even food tend to multiply quickly.

One area where costs rise significantly is education. Even with hand-me-downs for clothes and toys, each child may need their own extracurriculars, sports teams, and eventually college tuition. Some parents find it helpful to set up 529 College Savings Plans for each child to stay organized.

‍

Parental Income and Savings Goals

How much you spend raising your children is deeply influenced by how much you earn. Higher-earning families tend to spend more on education, extracurriculars, and vacations, while lower- and middle-income families often prioritize essentials like housing, food, and healthcare.

Setting clear savings goals is key for any family, regardless of earnings. Having separate accounts for long-term expenses like college or big medical bills can help you stay on track. Parents who start saving early, even if it’s a small amount each month, are often better prepared when big-ticket expenses come up later. For example, setting up automatic transfers into a 529 College Savings Plan or other investment accounts can help you gradually build up a financial cushion for future costs like college or emergencies.

Another factor to consider is balancing short-term and long-term savings. In the short term, you might need to cover expenses like new baby gear, childcare, or even unexpected medical bills. But in the long term, you should think about bigger financial goals, like saving for your child’s education or helping them buy their first car. Revisiting your savings goals regularly and adjusting them as your income changes can help you stay financially flexible as your family grows.

‍

Tips for Managing the Costs

Raising a child comes with plenty of financial challenges, but there are ways to make it more manageable. By planning ahead and developing smart financial habits, you can reduce some of the pressure. Here are a few practical tips to keep things under control:

Budget Early: Start tracking your expenses even before your child is born. Knowing where your money is going helps you make better decisions about what to cut or where to save.
Cut Childcare Costs: Childcare can be one of the biggest expenses, so look into cost-saving options like nanny shares, family care, or adjusting work schedules to minimize full-time childcare.
Meal Planning: Planning meals ahead of time and buying in economical quantities can significantly reduce your grocery bill, especially as your kids grow and eat more.
Buy Used: Kids outgrow clothes and toys quickly, so there’s no need to buy everything new. Shopping on Facebook Marketplace or other used marketplaces or getting hand-me-downs from friends can save hundreds, if not thousands, of dollars over the years.
Tax Benefits: Don’t forget to take advantage of tax credits like the Child Tax Credit or Dependent Care Credit. These can help offset some of the expenses that come with raising children.
Shop for Discounts: Keep an eye out for sales and discounts on everything from clothing to school supplies. Timing your purchases and shopping in bulk can add up to big savings.

By staying mindful of your spending and making adjustments along the way, you can help reduce some of the financial stress that comes with raising kids.

‍

College Expenses: Thinking Beyond Age 17

When it comes to college expenses, tuition is only part of the equation. Planning ahead for all the costs associated with higher education can help you avoid financial surprises down the road. Let’s break it down:

Tuition and Fees: This is the big one, and it varies widely. Public universities (in-state) cost around $10,560 per year, while private universities can charge anywhere from $30,000 to $50,000 per year. On top of tuition, don’t forget about fees for labs, technology, and student activities.
Room and Board: If your child is living on campus, room and board can run from $10,000 to $14,000 per year. If they live off-campus, rent, and utilities, need to be factored in. And don’t forget, they’ll need to buy food if they aren’t part of the school dining program.
Books and Supplies: Textbooks and school supplies can cost $500 to $1,200 per year. Depending on your child’s major, this cost can vary, with some programs requiring expensive equipment or software.
Technology: A reliable laptop is essential, and this can range from $500 to $1,500. Don’t forget about software or repairs, which can add to the bill over the years.
Transportation: Whether your child is driving or taking public transit, transportation costs need to be considered. If they attend a school far from home, airfare or bus tickets for holidays and breaks can add several hundred dollars per year to your expenses.
Personal Expenses: These include clothing, entertainment, laundry, and other day-to-day necessities. Budgeting $500 to $1,500 per year for these miscellaneous expenses is a good idea, depending on your child’s lifestyle.
Health Insurance: Many universities require students to have health insurance, and if your child isn’t covered under your plan, expect to pay around $1,000 to $3,000 per year for campus health plans.

By starting a 529 College Savings Plan early, you can take advantage of tax benefits while saving for these various costs. The earlier you start, the more time your money has to grow and help cover not just tuition but also these other essential expenses.

‍

Do You Need a Financial Advisor?

Deciding whether or not to hire a financial advisor is a personal choice. While you don’t need one to raise a child, an advisor can be helpful, especially if you’re juggling multiple financial goals like saving for retirement, building an emergency fund, and planning for college. A financial advisor can help you create a customized plan that fits your family’s unique financial situation and ensure that you’re making the most of your income and savings.

For some parents, especially those with high incomes or complex financial situations, working with an advisor can provide peace of mind and long-term planning strategies. It’s worth considering if you feel unsure about how to allocate your resources or invest for your family’s future.

‍

FAQs

How much does it cost to raise a child in the U.S.?

According to the USDA estimate, it costs a middle-income family approximately $331,933 to raise a child to age 18. This doesn’t include college costs, which can add significantly to the total.

How much do families spend on children each year?

On average, families spend about $16,978* per year per child. However, this varies based on factors like income, geographic location, and family size.

Is having a baby expensive?‍

Yes, from prenatal care to delivery, having a baby can cost anywhere from $5,000 to $11,000, depending on insurance coverage and any complications during childbirth.

*Source: https://smartasset.com/data-studies/cost-raise-child-state-2024