As a current or future parent, it can feel odd to put raising a child in terms of costs. The experience of parenthood can hardly be captured in dollars and cents.
But the fact is, kids are expensive. In its Expenditures on Children by Families report, the USDA puts the cost of raising a child from birth to age 18 at $233,610 for a middle-income family (married with two kids) — around $12,980 per year.
Breaking down the cost to raise a child by expense
Understanding the cost of raising a child can help you financially prepare and adjust for each new stage of your and your child’s life. To help you get a handle on the cost of raising a child, we’re breaking them down here.
Child birth or adoption: $4,500 to $43,000
Depending on your situation, adding a new child to your family can cost almost as much as raising it.
For those with employer-based health insurance, the average total costs that patients paid for maternity care was $4,500. Patients without insurance will face higher costs by magnitudes — around $30,000 to $50,000.
Parents who learn they are expecting or plan to become pregnant should first make sure they have adequate insurance. Make sure to revisit your options either through your employer-provided insurance or the ACA marketplace during the open enrollment period.
Queer couples may face extra costs to become parents. They might require fertility treatments or services, that can run from $500 for sperm donation up to $75,000 or more for surrogacy. Opposite-sex couples who face infertility might have many of the same options and costs, too.
Adopting is another option, but no less expensive. The average cost to adopt through a private agency is $43,000.
Housing costs for a child: $3,750 per year
A growing family requires more space — and paying for a bigger home or apartment is the largest expense tracked by the USDA. Of a family’s $12,980 annual cost to raise a child, 29% is calculated to go toward housing alone. That’s $3,764 per year in added housing costs per child, or $314 per month.
And this only accounts for the cost of housing with an extra bedroom. It doesn’t take into account that parents may choose higher housing costs due to other factors, such as moving to a home with a large backyard or better schools.
Food costs for a child: $2,794 per year
After housing, food is the next-highest cost of raising a child in the USDA report — taking up 18% of a family’s spending on kids.
The latest cost analysis from the USDA puts monthly food costs at $98 to $162 per child on a “thrifty plan,” to the costlier “liberal plan” of $182 to $327 per month. (Younger children cost less to feed.) Overall, households on a “moderate plan” spent $233 per month on food for a child — totaling $2,794 per year.
Child care and education costs for a child: $37,400 total
Child care is another significant cost, though it can fluctuate quite a bit depending on your child’s age and needs. Parents with preschool-aged kids spend the most on child care and education. Once the children enter school spending in this category typically falls.
Paying for child care is often a necessity so parents can work. (It can be a particularly important investment in moms’ earning powers.) And depending on your child’s age and the type of care you choose, child care costs can range from $870 for an in-home care center to $2,450 for a nanny.
Overall, the USDA estimates that child care accounts for 16% of a family’s cost to raise a child. With the costs across ages 0 to 17 combined, the total price tag averages $37,376.
Transportation: $1,947 per year
Getting your child where they need to be carries extra costs, too. Many families will need to buy their first or second car to accommodate the lifestyle changes of having a child. Or, you might find you need to upsize to a larger vehicle as your child gets older and you find yourself carting their friends around to baseball practice or choir performances.
This might mean taking on a new or bigger car payment, along with extra spending on gas, car insurance, and vehicle maintenance, too. As a result, transportation accounts for 15% of families’ total spending per child, on average, per the USDA. That comes out to about $1,947 per year.
Other costs: $2,856 per year
The USDA also includes three other categories in its report on the cost of raising a child:
- Health care accounts for 9% of costs for children, or around $1,168 per year. This includes out-of-pocket costs for health insurance premiums and the family’s portion of medical bills.
- Clothing for the child makes up 6% of spending, or around $779 per year.
- Miscellaneous goods and services account for 7% of spending ($909 per year). This includes spending on personal items like sports equipment and media players, entertainment including video games and reading materials, and personal care like toothbrushes and hair cuts.
Together these costs equal around 22% of what parents spend on one child, or around $2,856 per year.
Adjusting your family’s costs to raise a child
Keep in mind that the above figures are general numbers. They can help you gauge if your costs are high or low, compared to nationwide averages.
But to know your specific cost to raise a child, you’ll need to take a closer look at your specific needs, situation, living area, and lifestyle.
Here are some tips to keep in mind as you research costs and put together your expenses and budget for raising a child.
Lower-income families spend less per child, overall, than higher-income families, per the USDA. This shows that when families need to cut back, they find ways to do so. And it can remind parents to base spending on their own family’s specific financial situation and needs –not on comparisons to other families’ budgets or spending habits.
The costs of living can vary widely depending on where you live, especially for housing and child care. As you’re researching child costs, make sure to look at prices and rates specific to your area.
The costs of parenting will change over time, and typically increase as kids get older. Kids are the cheapest from ages 6 to 8, averaging $12,350 per year, and spending peaks at ages 15 to 17 at $13,900. Fortunately, most parent’s incomes will also increase over time, as well. Looking for ways to raise your household income can be key to get ahead of the costs of raising a child.
Know where you’re willing to make trade-offs. Lowering costs in one area can enable you to spend more on another cost that’s more important to you. Maybe you’ll happily spend more on housing if it means living nearer to work and getting by with one car for your family, for example.
Or perhaps you’re willing to move to an affordable suburb and accept a longer commute or average schools if it means feeling more financially secure.
Beyond this, remember that every child and family is unique. The financial burden of raising a child doesn’t have to stand in your way of taking this life step. Remember that averages are just that, averages — and it’s okay if your spending varies from the norm in either direction.
Start learning more about managing money and parenting costs. Then putting that into action to make financial decisions and create money management systems that make sense for your family. You can manage your money well enough to give your child a good life.