How Much Does It Cost To Raise A Child?

If you’re thinking of having kids, you’re probably wondering: How much does it cost to raise a child? From food and housing to day care and health care, little ones come with added expenses attached. Noting this, it’s no wonder that so many aspiring parents are prone to asking how much kids cost and how much that they need to budget for a growing family.

Let’s take a closer look at the annual costs associated with raising a child, various associated expenditures, and the average cost that you might expect per kid per year. Being aware of these expenses can not only help you build your budget, it can also help you better plan and ensure that your children enjoy the best opportunities available time and time again.

The Cost Of Kids

The latest studies from 2015 by the USDA (adjusted for current costs of living) place the average cost to raise a kid from birth until age 17 at around $285,000 for a middle-income family.

Mind you: The total cost projected here is simply an estimate, especially with everyday expenses like groceries and clothing only continuing to grow. Overall, it’s clear that child-rearing isn’t cheap after all, especially when you factor in added expenditures like medical bills, school supplies, activities, and all the other costs that come with raising a healthy, well-rounded tot.

As you begin to budget for a growing family, note that a number of factors will, of course, impact your individual experience, including where you live. Also keep in mind that costs don’t necessarily have to be shouldered all at once – and that much will depend on a host of factors based on the specific household and child. Below, we’ve broken out a number of different variables that may impact your total cost of raising a child.

Where You Live

The cost of raising a child can differ considerably depending on where your family chooses to reside. Different states, towns, and even neighborhoods can all impact your total costs of living and child-rearing. The USDA report from 2015 we referenced earlier found that child-rearing tends to be more expensive in the urban Northeast and urban West. On the flip side, many less-densely populated areas such as towns throughout the Midwest, or cities located throughout the South, can come with lower expenses attached. Rural areas saw the lowest cost to raise a child, according to the report.

Spending Habits 

Many of the expenses associated with raising a child also come down to your individual spending habits. A few ways to cut child-rearing costs might include dining out less often vs. cooking in, avoiding buying expensive name-brand kids’ clothes, and sticking with road trips instead of pricier air travel excursions.

Households on a tight budget are advised to lower discretionary spending if they’re looking to keep bills down, and – where possible – to buy items at bulk or special discounts from retail establishments. Collecting and managing coupons can also help you save on expenditures. It’s also helpful to follow a budget to ensure you’re able to cover all your expenses. An app like Rocket Money^SM can help you track your spending and monthly budget.

Choice Of School 

Depending on your individual preferences and where you elect to live, your choice of schooling can greatly impact the expenses associated with raising a child. Keep in mind that added costs that may come with different types of schools as well, including food, transportation, supplies, and more. Likewise, additional schooling, such as for religious studies, may add to your total cost of education.

After-School Activities 

As you plan your budget, also keep in mind that many kids tend to be highly active. That means having to set aside funds for any after-school activities, sports, or hobbies that they may wish to pursue. Thankfully, some providers typically offer services at a variety of price points designed to suit every need. That said, you’ll also need to plan for any associated equipment or travel needs associated with pursuing these hobbies and activities.

Expenses To Consider When Raising Children 

Preparing for common expenditures can help you more successfully budget for the expenses associated with raising a child – and get a better idea of where you might expect to be spending going forward.

Housing 

Clocking in at a whopping 29% of the total expenses associated with raising a child according to the USDA, housing is one of the most expensive costs you’ll encounter as a parent. Housing costs vary considerably depending on where you reside – but it’s not uncommon to see around roughly $5,500 on average per year going toward putting a roof over a child’s head. Factors such as the size of your home and the cost of utilities, maintenance, homeowners insurance, and local weather conditions can all impact pricing here too.

Being ‘House Poor’ And How To Avoid It

If you’re putting too much money toward housing and the upkeep of your home, you may be considered house poor, a state which can quickly drain your budget and disposable income. When considering housing, it’s important to not only budget for the total sale price of a home, but also to factor in added expenses such as maintenance, upkeep, and utilities. That includes keeping an eye out for other associated costs when crunching the numbers here including property taxes, homeowners association fees, and insurance as well.

Food

Food is the second-largest cost of raising a child behind housing, with food prices potentially set to rise roughly 3% – 7% in the next year ahead. Of course, different categories of meat and produce also tend to spike in price at times depending on availability and whether they’re in-demand or in-season as well. Long story short: A growing child tends to be a hungry one, and they can easily take a bite out of your budget.

Inflation

As inflation rises, so too do the prices on the everyday food and other goods. Understanding inflation and its effects can help you get a better appreciation for just how much grocery costs have risen in recent months – and may continue to rise going forward. As a general rule of thumb, expenses associated with feeding one’s family generally tend to rise over time. Given that you’ll generally be raising a child over a roughly 20-year period, costs can quickly add up.

Child care

For anyone wondering how much a kid costs per year, it helps to know that the cost of child care is far from cheap. 2023 data from Care.com suggests that daycare costs for one child average to $321 monthly, whereas hiring a nanny for an infant can reach $766 or more monthly. To put things in perspective, child care expenses average around 16% of the total costs to raise a child. That said, child care costs can vary significantly as they’re influenced by the area in which you reside, number of providers in business locally, overarching marketplace dynamics, and other factors.

College

As a prospective parent, you’re doubtless wondering how much that you can expect to spend on higher education as well. Costs of attending college, according to the College Board, will run you about $11,250 on average per year for a full-time undergraduate student that’s attending a 4-year public school on in-state tuition. Conversely, if your child will attend a similar university on out of state tuition, you can expect to pay about $29,150 on average. It’s important to plan and budget for how you might cover any expenses associated with an undergraduate, let alone graduate, degree program.

How To Start Saving For College

As you start to think about your children’s future and saving for college, the costs of attending a higher education institute may seem intimidating. Thankfully, a number of options such as starting to save early, opening a college fund, or capitalizing on various statewide and federal education funding programs can help.

Likewise, you might also crunch the numbers and see where scholarships, student loan programs, or co-op job opportunities might help alleviate associated expenses. Planning ahead and taking steps in advance to help your child begin to save for college can help them avoid taking on costly student debt and/or overinvesting in an expensive degree program when more cost-affordable alternatives exist.

The Bottom Line: Budgeting Can Make Child-Rearing Easier

Having a child can be one of the most rewarding milestones, but it’s also be an expensive proposition given rising costs of living, growing household expenditures. This means that it’s important to be aware of the types of expenses that you might face as a family going forward from food to housing and education. And, of course, how these expenses may vary depending on your lifestyle, location, and a number of other important factors.

Looking to get a better handle on the costs of raising a child going forward, and a better sense of where you can start saving money now? Be sure to sign up today for the Rocket Money app today!