Are you planning to start your own family, to finally have kids and be a parent? You know, to nurture, love, and take care of another human being? Yes? Well, having a child is a big decision. It often raises questions like, “Am I ready?” or “Can I really raise a child?” and the most frequent question of all: “Can I afford it?”
You might be surprised on how much money you’ll need to have to raise a kid in the United States. So, let’s not delay things any further. How much does it cost to raise a child and what other expenses should you be aware of? Let’s find out!
Average Cost of Raising a Child
Here’s the thing: raising a child in the United States would normally cost you nearly a QUARTER OF A MILLION DOLLARS. Yes, you read that right. That’s a quarter of a million dollars. And this estimate comes from a study conducted by the United States Department of Agriculture (USDA) which was released on January 9, 2017.
According to the study, known as the Expenditures on Children by Families Annual Report or also called as “The Cost of Raising a Child”, if your kid is born from 2015 onwards and if you’re a middle-income couple with two children (the standard in the United States), you will spend between $12,350 and $13,900 a year, or $233,610 starting from birth through the age of 17.
Families with lower incomes, however, would have to spend at least $174,690. And those with higher incomes are expected to spend around $372,210, on average, to raise a child. Now, take note that these figures do not include expenses for college.
What are Included
The average cost of raising a child is determined by calculating the total costs for the seven most important components for having a child.
And they are:
- Housing – Giving a child shelter is one of the most important responsibilities parents have. And it takes up 29% of the total cost, making it the biggest expense for middle-income families. This includes mortgage payments, property taxes, or rent, maintenance and repairs, and insurance. In addition, there are expenses for utilities, house furnishings, and appliances.
- Food – This is the second biggest expense in the low and middle-income groups, and is 18% of the entire cost. Food cost consists of school meals, restaurant dining, and food and non-alcoholic beverages bought at groceries, convenience, and specialty stores.
- Transportation – These consists of those you pay for vehicle loans, down payments, gasoline and motor oil, maintenance and repairs, public transportation, and insurance. Transportation is 15% of child-rearing expenses, making it the third biggest cost for families with low income. Also, transportation expenses are seen highest when a child reaches 15, a time when he/she starts to drive or be involved in more activities away from home.
- Clothing – These are all of a child’s apparel. From diapers, shoes, pants, dresses, shirts and so on. Clothes make up 6% of how much does it cost to raise a child. If you want, you could spend less by purchasing clothes by sets.
- Health Care – This accounts for 8 to 9% of the total cost which consists of out-of-pocket expenses and portions which are not covered by health insurance. Included are medical and dental services, prescription drugs, and medical supplies.
- Childcare & Education – According to the government, child care is another big expenditure that can cost parents an average of $37,378 for a single child. And along with education, expenses are generally higher for a child under the age of 6. Expenses for such consist of school tuition and supplies, babysitting, books, and other fees.
- Miscellaneous – These are a parent’s expenses on a child’s personal care products and services. These may include toothbrushes and haircuts. There are also expenses for entertainment like video games, media players, sports equipment and musical instruments. Also, you are expected to spend for a child’s reading materials such as magazines and non-school related books.
Additional Costs
As stated, the figures given do not include expenses for a college education. But if you want to know how much it will cost to send your child to one then here are the average expenses for tuition and other fees according to the College Board:
- Public Colleges –You can expect to pay $38,600, considering your child finishes within four years. That’s $9,650 a year.
- Private Non-Profit Colleges – This will cost you around $133,920 for four years, or $33,480 annually.
- 2-Year Public Colleges – The annual average is $3,520 or a total of $7,040.
Aside from tuition and other fees, if your child isn’t staying at home then there’s the additional cost for food and transportation. In addition, you’d have to pay for room and boarding. And at a 4-year public college, it will cost you around $10,440 a year, or $11,890 at a 4-year private college.
Factors Affecting Average Cost of Raising a Child
There are several factors which can determine how much you’ll need to raise a child, factors that could make your expenses higher or lower. And these are:
Income: Studies show that for a standard household of a married-couple family with two children who has a before-tax income less than $59,200, the annual expenses for a single child ranges from $9,330 to $9,980. And for the same type of household but with a before-tax income of $59,200 to $107,400, the yearly cost is from $12,350 to $13,900. Now, for the same type of household with income over $107,400, the cost of raising a child is significantly higher with a total of $19,380 to $23,380.
Child’s Age: Your total expenses for food, transportation, clothing, and health care will generally increase as a child grows older. To give you an idea, at the age of two, you will have to spend $16,100 a year for your child. But as he/she turns to 17, your total expenses will go up to $17,650.
Region you live in: It is seen that families in the urban Northeast had the highest expenses in child-rearing. This is then followed by similar families in the urban West and urban South. The regions with the lowest expenses are urban Midwest and rural areas in the country. To know which region you’re in, here’s a guide:
- The Northeast includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
- The South includes Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
- The Midwest includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
- The West includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
- Rural areas include any town or municipality with a population of fewer than 2,500 people.
Number of Children: The expenses by a couple with only one child are 27% higher than the expenses per child of a couple with two kids. Similarly, those with three or more children have an average per child expense that is 24% lower than of a couple with two kids. So generally, the more kids you have the lower expenses you have for each.
Marital Status: If you’re raising your child in a single-parent family, total expenses are lower. For example, the annual cost for a 5-year-old kid in a married-couple family is $16,170 while in a single-parent family it will only be $11,730.