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How Much Does It Cost To Raise A Child

Raising a child does not come cheap these days. Even though having a child has its own rewards, you have to be prepared when it comes to the high expenses in line with having one. After reading this article, you can expect to know how much it will cost you to raise a child from 0 to 17 years old.

Typical Cost Of Raising A Child

According to the 2010 USDA’s Center for Nutrition Policy and Promotion annual report on Expenditures on Children by Families, the annual cost of raising a child depends on the income of the family.

$8,480 to $9,630 per year for families with income less than $57,600

$11,880 to $13,830 per year for households with income from $57,600 to $99,730

$19,770 to $23,690 per year for households with income of more than $99,730

Included In The Price Of Raising A Child

The above-mentioned costs include the following:

  • Housing (31 percent of the total cost)
  • Child care/education (17 percent)
  • Food (16 percent)
  • Clothing (6 percent)
  • Healthcare (8 percent)
  • Transportation (14 percent)
  • Miscellaneous like personal care items, entertainment, and reading materials (8 percent)

Factors That Affect The Price Of Raising A Child

Age. The age of the child greatly affects the cost of raising him yearly. Often, as the child gets older, the cost gets higher. The general direction in the graph below shows that the cost of raising a child increases as a child becomes older.

the cost of raising a child by income level

Source: CNPP.USDA.gov

Household Income. The income of the household also affects the cost of raising a child as reflected in the figure above. Families in the lowest income group spend 25 percent of their income on a child while those in the middle-income group spend 16 percent. On the other hand, the highest-income group spends 12 percent on a child yearly. However, the highest income families usually spend more than twice the amount of how much the families in the lowest income group spend yearly.

Geographical location. Where you live can also affect child-rearing costs. As per the USDA’s data, raising a child is most expensive in the urban Northeast region followed by urban West and urban Midwest. The cost is, however, lowest in urban South and rural areas. The difference in the child-rearing expenses based on geographical location can be explained by the high cost of living in some places, especially when speaking of housing, child care and education, and transportation.

Type of family. A husband-wife family usually spends more on rearing a child as compared to a single parent family. Though there is little difference, it can be noted that single parent families have lower household income as compared to husband-wife families.

Number of children. The total number of children in the household can also greatly affect the cost of raising a child. A one-child family usually spends more on a child as compared to a two-child family. Take a look at the housing expenses alone. Usually, households with two or more children have two or three children sharing the same room. Hence, the cost of housing yearly is divided among two or three children.

Annual inflation rate. The cost of raising a child usually is affected by the annual inflation rate, which is usually calculated as 2.60 percent. Hence, not only the cost of child-rearing expenses gets higher as the child gets older but also as the inflation rate goes higher. For a total of 17 years, the total cost of raising a child is $206,180 for low-income group, $286,860 for middle-income group, and $477,100 for high-income group.

Here is a calculation of the cost of raising a child that was born in 2010 following the expected inflation rates for the next 17 years.

how much does it cost to raise a child

Source: CNPP.USDA.gov

Additional Costs

Prenatal expenses are an extra cost when raising a child because the calculated cost above starts once the child is born.

College education is also an additional expense, because the overall cost of raising a child is calculated up until the age of 17. However, parents usually spend serious money on a child’s college education. College education expenses include tuition, room and board, and the like.

Photo by josef_moffett

Tips Before You Decide To Raise A Child

You can calculate the cost of raising a child on a more personal level using this online calculator from USDA.

Save money prior to having a baby. This will help you at least ensure that you can support raising your child for the first few years. Good financial preparation is key towards a smooth experience of raising children.

Be mentally and physically prepared for having a child. Your finances are not the only things that matter here.

As your child grows, teach him good skills. Raising a responsible child can mean fewer expenses for you in the long run.

Spend wisely when raising a child. Your child does not need top-of-the-line goods all the time. You can experiment on cheaper clothes, diapers, and the like from time to time to save even a little money on the way.

Take advantage of government programs for children such as public education. Learn about the benefits your child can get per year.

Get an educational plan and health insurance for your child. Over the years, you can save more when you insure your child.