Children bring a lot of light into a family’s life, but they also bring a lot of expenses. It’s no secret that the cost of raising a child is steep. But just how high is the average cost of raising a child to 18?
Being prepared is always a good idea. Let’s take a closer look at the average cost of raising a child per year so parents-to-be can plan their budgets and save accordingly.
Table of Contents
Key Points
• Raising a child to age 18 costs an average of $233,610, which adjusts to $284,570 with inflation.
• Housing, food, and childcare/education are the top three expenses, comprising 63% of costs.
• The annual cost to raise a child averages $12,980, based on 2015 figures.
• Childcare costs vary significantly by state, with South Dakota being the least expensive.
• Strategic budgeting and cost-saving measures can help manage the financial burden of raising a child.
What Is the US Average Cost of Raising a Child?
On average, the cost of raising a child is $12,980 per year for children born in 2015 into a middle-income, two-child family with married parents.
For more context on child-raising costs, take a look at the following table.
|
Average Cost of Raising a Child to 18 Per Year |
|
|---|---|
| Cost category | Average percent of spending |
| Housing | 29% |
| Food | 18% |
| Childcare/Education | 16% |
| Transportation | 15% |
| Healthcare | 9% |
| Clothing | 6% |
| Miscellaneous: | 7% |
Which State Has the Lowest Childcare Costs?
Where someone lives can impact how much it costs to raise a child. South Dakota residents are lucky to have the lowest average childcare costs at $6,677 per year, representing 23.7% of income. Massachusetts residents aren’t so lucky: They spend $10,000 more each year than South Dakota parents do. The average cost of childcare in Massachusetts is $16,781 per year, accounting for 51.4% of income.
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How Much Does It Cost to Raise a Child?
The average cost of raising a child each year comes to $12,980 for children born in 2015, which leads to an overall cost of $233,610 to raise a child through the age of 17. When adjusted for inflation, the figure rises to $284,570. None of these numbers account for the cost of a college education, which many parents like to budget for far in advance.
For more insight into how much it costs to raise a child, there are free calculators online that can help parents to better estimate their spending based on their particular family needs. You may also be curious to learn how to financially plan for child No. 2.
Are You Able to Afford a Child?
Whether or not you can afford a child depends on your particular financial circumstances, as well as factors like childcare needs and the cost of living in your area.
There is no one salary figure that means someone is able to afford a child. It’s important to research how having a child will impact housing, food, and healthcare costs, how much of your disposable income will go toward clothing, equipment, childcare and education, even toys. This way, you’ll have a clear idea of how having a child will impact your budget.
Recommended: How to Create a Household Budget
How to Budget for a Baby
Speaking of budgets, these are some expenses parents need to budget for when they plan to have a baby join their family. They can use a budgeting app, spreadsheet, or even good old fashioned pen and paper to create a new budget.
Some examples of baby expenses that should go in a budget include:
• Food
• Medical care
• Housing
• Childcare
• Education
• College savings
• Clothing
• Equipment (high chair, car seat)
• Toys
• Recreational activities
• Care items (diapers, baby wipes, etc.)
Once parents know what their total expenses are, they can subtract that amount from their take-home income to determine how much money is left for fun (like dinners out and vacations) and savings goals. Some parents even like to create an investment plan for their newborn.
Recommended: Top Budgeting Tips for Single Parents
How to Reduce the Costs of Raising a Child
Because raising a child can cost a pretty penny, it can be helpful to think strategically about how to save money while raising kids. Here are some tips that can make it possible to spend less as a parent.
• Buy second-hand clothes. No hand-me-downs at the ready? Shopping second-hand can be a great way to save money on baby and kids’ clothes. Most children grow out of their clothes very quickly, so new or lightly worn clothes are always available at thrift stores.
• Spend less on housing. Even if you can afford to buy a larger house, you may want to consider living below your means. Housing is a major ongoing expense for any family, so saving here can really make an impact.
• Buy generic. When it comes to things like formula and diapers, lower cost generics can get the job done just as well as fancy name brands.
• Head to the library. Looking to keep kids entertained? Don’t forget about the local library. Alongside books, many libraries offer DVD rentals, story time, and tons of free events that can keep little ones active. So cancel those expensive streaming subscriptions and skip the overpriced petting zoos for now.
Example List of Expenses for Raising a Child
To help parents plan better, below are some common expenses that come with raising a child and the percentage of a parent’s income that goes toward each expense:
• Housing: 29%
• Food: 18%
• Childcare and education: 16%
• Transportation: 15%
• Healthcare: 9%
• Clothing: 6%
• Miscellaneous: 7%
The Takeaway
The average cost of raising a child in the U.S. is about $13K per year. Knowing this can help families create a budget that makes it easier to reach their savings goals while raising young kids. The biggest child-related expense is for housing, followed by food and childcare or education. Things like clothes and toys will barely make a blip on your budget, if you take advantage of hand-me-downs.
To help you get a grip on your finances, soon-to-be parents can sign up for SoFi’s money tracker app. Track multiple account balances in one place ,and keep an eye on your credit scores too. You can also set savings goals and review your spending — so you can get ready for all the extra line items that come with raising kids.
FAQ
How much does it cost to raise a child monthly?
On average, it costs $12,980 per year to raise a child that was born in 2015. This breaks down to average monthly spending of about $1,081.
How much does it cost to raise a child to 18 in California?
California is a notoriously expensive state to live in, and that extends to child rearing costs. It costs an average of $23,586 each year to raise a child in California, which comes out to $400,962 over the course of 17 years.
What is the minimum salary to raise a child?
There is no one minimum salary that parents need to earn in order to afford a child. How much it costs to raise a child depends on many different factors, like location, childcare needs, education preferences, health conditions, and more.
Photo credit: iStock/Poike
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