Raising a child can be an emotionally rewarding experience. But it can also be very costly. Statistics from the Brookings Institution, an economic think tank, show that the average middle-income family with two children will spend $310,605 to raise a child born in 2015 up to age 17 in 2032.
This number represents a significant jump from the figure published by the U.S. Department of Agriculture (USDA), which estimated the overall cost to be $233,610 in 2017.Understanding the costs can make shaping a parent's financial plan easier.
Key Takeaways
- Middle-income parents will spend an average of $310,605 for a child born in 2015 until they turn 17 in 2032.
- The greatest expense associated with raising a child is housing.
- The cost of childcare varies widely and depends on where a family lives.
Housing: 33% of Income
An expense associated with the cost of raising children is housing. This can easily make up a sizable chunk of a parent’s budget, especially when you factor in mortgage or rent payments, taxes, insurance, repairs, utilities, maintenance, and household goods.
According to Consumer Expenditures Data for 2022, the typical household spends $24,298 on housing per year. Meanwhile, U.S. Census Bureau data shows that the median household income in the United States was $74,580 in 2022.
These numbers offer a broad idea of how much families pay for housing. Costs vary depending on geographic area, type of dwelling, and family size. Economic conditions can also influence the cost of housing for families. Rising house prices make it more expensive for families to purchase a home. Likewise, rising inflation can push up rental prices and raise prices for consumer goods.
The U.S. Department of Housing and Urban Development offers housing assistance programs to supplement the cost of housing for eligible lower-income families on their website.
Food: 25% of Income
The amount a family spends is based on the number of children in the home, household income, geographic region, and preferred diet. The USDA issues monthly reports on food costs at four levels: thrifty, low-cost, moderate-cost, and liberal. These reports consider different household sizes with children of different ages.
The reference family consists of a male and a female adult ages 20 to 50 and two children in the six- to eight-year-old range and the nine- to 11-year-old range. Here’s how the average food spending numbers for the reference family add up as of Oct. 2023:
- Thrifty plan: $975.30
- Low-cost plan: $1,059.90
- Moderate plan: $1,313.60
- Liberal plan: $1,585.80
At the low end, a family of four spends about $11,700 per year on food at home. At the high end, they spend more than $19,000 per year on food. That’s around 25% of their income based on the median household income of $74,580.
$310,605
The total cost to raise a child born in 2015 to age 17.
Childcare: 7% to 23% of Income
Childcare costs can easily use a sizable part of parents’ budgets each year. How much families pay can depend on the type of care needed, the number of children who need care, and where the family lives. In 2022, costs ranged from $5,357 for school-age home-based care in small counties to $17,171 for infant center-based care in large counties.
Planning For College
The essential expenses don’t account for the cost of a college education. Higher education can add to the total for parents who help pay for their children’s college costs. How much parents pay for college can depend on whether the child:
- Attends a two- or four-year school
- Goes to a public or private university
- Is charged in-state or out-of-state tuition rates (at public universities)
The average annual cost (in-state) for the 2023-2024 academic year totals $24,030 for a public college and $55,190 for a private college. It includes the cost of tuition, fees, and room and board.
What Other Costs Are Involved in Raising Children?
Besides the cost of housing, food, childcare, and education, parents will need to factor in transportation, healthcare and insurance, clothing, extracurricular activities, sports and hobbies, and family trips or vacations.
How Can Families Save Money While Raising Children?
Families can look for parent-friendly tax credits and deductions that can reduce their tax liability or help them get some money back, like the Child Tax Credit.
How Can Families Save for College?
Families can benefit by taking advantage of 529 plans or other investment vehicles to keep kids from graduating with a large amount of debt. A 529 plan is a tax-advantaged savings plan to encourage saving for future education costs. The plans are sponsored by states, state agencies, or educational institutions and authorized under Section 529 of the Internal Revenue Code.
The Bottom Line
The financial side of child-rearing can be daunting and expensive. Families allocate money to housing, food, childcare, and even college. Parents can research housing assistance available to qualified families from HUD, childcare discounts that may apply for multiple children, and IRS tax credits.
FAQs
According to a U.S. Department of Agriculture study published in 2017, the average cost of raising a child from birth through age 17 was $233,610 for a middle-income married couple with two children. This estimate was based on a family of four and excludes any college costs.
How much does it cost to raise a child to 18 in 2024? ›
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 $312,202 as of March 2024, based on data from the U.S. Bureau of Labor Statistics.
What is the true cost of raising a child? ›
Prepare yourself for the sticker shock: According to a 2023 study by LendingTree, the nationwide average for the cost of raising a child is $21,681 per year. The study took into account rent, food, child care, clothing, transportation, health insurance premiums and state tax exemptions or credits.
How much does a baby cost per year in the US? ›
Admit it. Babies are cute, but they come with a big price tag. According to USAFacts.org, as of 2022 the average middle-income family could expect to spend between $16,007 and $17,141 on child-related expenses each year. For newborns, the cost can be even higher.
How much does it cost to raise a child per year in the UK? ›
So how much does it cost to raise a child here? The average amount of money spent on raising a child from birth to 18 in the UK – including housing and childcare costs – is £223,256, according to the latest research from investment platform Moneyfarm. That works out at about £12,400 a year, or £1,030 a month.
How much does it cost to give birth in the USA with insurance? ›
(No insurance) Total average hospital bill for a regular birth: $30,000. (No insurance) Total average hospital bill with a c-section: $50,000. (With insurance) Total average hospital bill for a regular birth: $3,400. (With insurance) Total average hospital bill with a c-section:$3,400.
What is the average cost of living for a family of 4 in the US? ›
Again, living expenses vary significantly by location, but we can use some average numbers. The average monthly living expenses for a single person in the USA are $3,189, which is $38,266 per year. The average cost for a family of four is $7,095 per month, which is $85,139 per year.
What is the most expensive state to raise a child? ›
Raising a child is getting more expensive - but the problem is worse in these 5 states
- Massachusetts. Raising a child in Massachusetts costs an estimated $35,841 a year – the most expensive state in the country and nearly double the national average. ...
- Hawaii. ...
- Connecticut. ...
- Colorado. ...
- New York.
Housing. Housing is the most expensive cost associated with raising a child, making up 29% of the total expenses. Based on the USDA's annual cost estimates, you're looking at about $5,235 going toward housing alone each year.
Why are kids so expensive to raise? ›
Besides the cost of housing, food, childcare, and education, parents will need to factor in transportation, healthcare and insurance, clothing, extracurricular activities, sports and hobbies, and family trips or vacations.
Pennsylvania ($1,249), Delaware ($1,271) and South Carolina ($1,344) were also among the most affordable states to have a baby. In Washington, D.C., the average cost was $1,026. Among the metro areas in the study, out-of-pocket costs ranged from $799 in Flint, Michigan, to $2,977 in Anchorage, Alaska.
What is the cheapest way to have a baby in America? ›
What is the cheapest way to give birth? The cheapest way to give birth is usually at home. With a home birth, you aren't paying the enormous hospital fees, but there are also more risks involved. Delivering at a birthing center can also be cheaper than a hospital birth.
How much is it to have a baby in the US without insurance? ›
California. It costs an average of $26,380 to give birth in a California hospital.
Why is having a baby expensive? ›
The cost of diapers, formula, day care and more, all add up. Many expenses begin accumulating even before a baby is born. “Prenatal care and childbirth are very expensive,” says Jamie Daw, an associate professor of health policy and management at Columbia Mailman School of Public Health.
Can I afford to have a baby? ›
Lower-income families can spend nearly 10% of their income on housing a child, while for middle-income families, this cost is around 5%, according to the USDA. No matter their income, families need to spend more on food as their children age, and these costs can account for roughly 18% of childcare costs.
How much do you save by not having kids? ›
Among all households, the Federal Reserve's Survey of Consumer Finances found that couples with no children also have the highest net worth, despite earning less than households with children. In 2022, the median net worth of couples with no children was around $150,000 more than that of couples with children.
What is the average cost to raise a child to 18 in the US? ›
The business looked at rent, food, child care, apparel, transportation, health insurance premiums, and state tax exemptions or credits to come up with their numbers. On average parents spend nearly a quarter of a million dollars ($237,482) to raise a child up to age 18.
How much does it cost to have a baby in 2024? ›
Giving birth costs $18,865 on average, including pregnancy, delivery and postpartum care, according to the Peterson-Kaiser Family Foundation (KFF) Health System Tracker. Health insurance can cover most of that cost.
How much will it cost to raise a child in the future? ›
Housing, food make up largest expenses
Taking into account the effects of inflation, the company Credit Karma found that parents can expect to spend roughly $306,924 to raise a child born in November 2023. The company found that housing, food and childcare make up the largest percentage of children's expenses.
What's the average amount parents spend per child for Christmas? ›
According to a November 2022 study, most parents are budgeting $220 for each child—with the highest budgets for 7 to 12-year-olds, though 28% of those surveyed are trying to keep it below $100.
