Whether you are a parent or not, you’re probably well aware that raising a child isn’t cheap. The cost of diapers, clothes, healthcare, housing and countless other expenses add up – but have you ever tried to put a number on the annual cost of raising a child?
The answer depends heavily on a family’s unique circumstances, from location to the child’s age to the number of parents and children in the household. Here are a few benchmarks:
- In a two-parent, two-child household in the Midwest with income over $104,670, child-rearing costs would be about $20,600 per child.
- In a single-parent, one-child household with income under $60,640, child-rearing costs would be about $11,391 per child.
These numbers are based on data from the 2013 U.S. Department of Agriculture report, “Expenditures on Children by Families.” The study contains estimates on the annual cost of raising a child from birth through the age of 17. Let’s take a closer look at some of the factors the affect the price of raising a child.
The more you make, the more you spend on kids
Not surprisingly, a parent’s income has a substantial effect on how much they spend on child-rearing costs. The statistics below show the amount of money that parents at various income levels in a two-child, husband-wife family spend per child.
- When family income is less than $60,640, average annual expenses per child lands between $8,990 and $10,230.
- When family income is between $60,640 and $105,000, average annual expenses lands between $12,600 and $14,700
- When family income is over $105,000 average annual expenses per child lands between $20,930 and $25,180
Since lower-income families bring in less money overall, they spend a higher percentage of their income on childcare costs. For example, households in the lowest income group spent 25% of before-tax income on a child, while middle-income families spent 16% of overall income on a child and the highest income group spent about 12% of total income on a child.
Older kids are more expensive
Babies are expensive, but the cost of child-rearing actually increases as the child ages. Food, transportation, clothing and healthcare costs are all more expensive for tween and teenage kids. One cost that went down with age was childcare and education, which makes sense when you consider that this data does not include the cost of a college education.
Regional breakdown of child-rearing cost
The report also found that geographical location has a significant effect on how much it costs to raise a child. In a husband-wife family, no matter what age the child, it is most expensive to raise a kid in the urban Northeast, while the second most expensive region is the urban West. Child-rearing costs are significantly lower families in the urban South as well as in rural areas across the United States.
Budgetary breakdown of child-rearing costs
Regardless of income level, the largest chunk of family budgets went to housing expenses. Below is a breakdown of child-rearing budgets for middle-income, husband-wife families with two children.
- 30% housing
- 18% childcare & education
- 16% food
- 14% transportation
- 8% healthcare
- 8% miscellaneous
- 6% clothing
The Raising A Child Calculator
The USDA actually used the above report to create a hands-on tool that you can use to calculate how much it will cost annually to raise a child based on your family’s unique circumstances. You will be prompted to enter the ages of your children, whether you have a single- or two-parent household, the region you live in and your income. The calculator will then provide an estimated annual cost for child rearing. Try out the Raising A Child Calculator here.
For more information on raising children with financial responsibility in mind, check out our family and money series.