Some people say you can’t buy love, but when it comes to children, you’re going to need money to raise them! Recent findings have shown that the average parent in the US can expect to spend about $233,610 to raise a child to 17-years-old. The figure is based on data compiled by the Expenditures on Children by Families report that the US Department of Agriculture completed.
The figures are based on a married couple who raise children together in a medium-income household. Interestingly, the report found families that raise only one child with the same income will pay an average of 27% more than those with two children. And this is just the tip of the iceberg. Let’s take a look at how much it costs to raise a child.
Child Costs By Category
Understanding all the costs involved in raising kids is vital to prepare financially and adjust as the child moves through different stages in life. Here is a breakdown of child costs by category:
Adoption or Child Birth: $4,500 to $40,000
Depending on your health insurance and financial situation, welcoming a child to the family can cost almost as much as you’ll spend raising it.
Those who have employer-based healthcare pay an average of $4,500 for childbirth, while those with no insurance may be responsible for paying over $40,000. On the other hand, would-be parents who cannot conceive naturally may face even more costs to become parents. For example, they may have to rely on fertility treatments or surrogacy, costing over $75,000. And while you may be thinking that adoption is cheaper, you would be wrong. The average cost to adopt a child using a private agency is roughly $43,000.
Yearly Housing Costs: $3,750
Growing families need more space, so paying for a larger home was found to be the highest expense tracked by the USDA. The cost of raising a child for one year is an average of $12,980. Of this figure, 29% of it goes straight to housing alone. In total, this is $314 per month in added costs per child, or $3,764 per year.
And keep in mind that this only accounts for the cost of a home with an extra bedroom. It does not account for parents paying higher housing costs to live near good schools or have another spare bedroom.
Yearly Food Costs: $2,794
The next-highest cost of raising a child per year is food. This factor accounts for about 18% of the yearly child-rearing budget. The USDA found that families on a “thrifty plan” spent between $98 and $162 per child per month. Those on a more “liberal plan” paid between $182 and $327 per month. Families with a “moderate plan” spend an average of $233 per month or $2,794 per year.
Education and Child Care Costs: $37,400
Anyone who has ever had a kid in daycare can tell you that this is a high cost that fluctuates based on your child’s needs and age. Preschool-aged kids generally come with the highest costs for education and care. Yet, once your child enters school, this category usually declines.
Overall, child care makes up for 16% of a family’s budget for taking care of children. And depending on the kid’s age and level of care you choose, these costs can vary from $870 for an in-home daycare or $2,450 to hire a nanny. With all expenses added to the age of 17, the total price averages $37,376. Either way, child care is a necessity for parents who work.
Yearly Transportation Costs: $1,947
This is a cost that most people don’t think of, but taking your child where they need to go amounts to extra expenses. Not only this, but parents may even need to purchase a larger or additional vehicle.
These costs come in the form of car payments, gas, vehicle maintenance, and car insurance. All of these combined accounts for around 15% of what a family spends toward raising a kid, which comes to roughly $1,947 per year.
Miscellaneous Yearly Expenses: $2,856
There are three other miscellaneous categories that the USDA used to reach their total amount for the cost to raise a child. These are:
- Clothing can make up 6% of the total budget or about $779 per year.
- Healthcare can account for up to 9% of the budget or about $1,168 per year. These costs include medical bills, health insurance premiums, and prescriptions.
- Other miscellaneous costs account for about 7% of the total cost to raise a kid. Such costs include personal items, entertainment, and other personal care products.
Child Rearing Costs By Income
As we mentioned, the actual cost of a child per year will significantly depend on the parents’ financial situation. This means that, on average, families that have more money tend to spend more on their kids and vice versa.
Based on recent findings, two-child, married-couple families with middle income earnings of less than $56,670 spend between $1,830 to $3,560 per month raising kids.
The same study found that families who are middle income with earnings between $56,670 and $98,120 spend between $2,400 to $4,670 per month raising kids.
Finally, families with the highest income with earnings over $98,120 spend an average of $4,350 to $8,450 per month on their children.
Yet, when discussing these figures, it’s important to note that these will greatly vary depending on the region in which you live. Those living in rural areas tend to spend far less than parents living in the urban west. Similarly, families in the midwestern states generally pay less than parents living in the urban east.
The Bottom Line
Though these figures are helpful for planning finances, your decision to have or adopt a child should be based on something other than money.
Sure, it costs a lot to raise kids, but it’s one of life’s greatest joys, and the love they provide offers far more than the money spent!
Original infographic via creditsesame.com in 2011, content updated September 2021.