How Much Does It Cost To Raise A Child? | Finance

How much does it cost to raise a child?

/ 10:35 AM February 10, 2022

Starting a family involves weighing the cost to raise a child. Many people adore kids, as raising them can be rewarding in many ways. However, those benefits will mean giving up a lot of aspects of your life.

Having children shouldn’t be reduced to a mere financial decision, but it involves a lot of spending. Parents must provide various things for their children to live a good life. Many of those cost money, so you need to have the funds ready.

I will go through the various expenses you should expect when raising a child. After discussing the financial costs, we will explore the physical and emotional ones. Later, we will see how to decide whether or not to have kids.


Here are the costs of raising a child:

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  1. Caring for the child from birth or adoption
  2. Housing costs
  3. Food costs
  4. Education and childcare costs
  5. Transportation
  6. Other expenses

Breakdown of the costs to raise a child

This is a child's room.

You can find so many studies that can provide real-life estimates of the costs of raising a child. Take the 2020 data from the US Department of Agriculture as an example.


The survey shows the average spending of a middle-income, married-couple family with two children. It says that it would likely spend around $12,980 every year per child.

That middle income family from 2015 earns around $59,200 – $107,400. Yet, it’s expected to spend $233,610 for food, shelter, and other things a child needs until he reaches 17.

Housing costs use up 29% of that money, making it the largest cost to raise a child. Meanwhile, food costs come in second at 18%. The cost of childcare is the third-largest at 16%.

The earnings of a middle-income family seem to have not budged since 2015. The Consumer Expenditures Survey of 2019 says the average middle income for rural areas is $79,500.

For families living in cities, the household income is slightly higher at $81,700. The expenses were subject to economies of scale, meaning you spend less on each child as you have more.

Let’s compare a family with just one child with another that has two. The average cost of raising for the former is 27% higher. This happens because siblings could share certain things.

For example, multiple children can share a bedroom. You may hand down the clothes and toys of the older siblings to the younger ones. They could even babysit for you.

Now that we’ve discussed the average budget for child support, we can now break the expenses down. The following information can help you make a financial plan for your family:

#1. Caring for the child from birth or adoption

This represents a cost to raise the child.

Average cost: $4,500 to $43,000

The first cost to raise a child start as soon as your kid is born. Surprisingly, welcoming a new child to your family can almost cost as much as raising it. Let’s say you have employer-based health insurance.

You will likely spend around $4,500 for maternity care. Still, you should talk to your life insurance provider or the ACA marketplace to confirm your options.

If you don’t have insurance, this will likely cost you around $30,000 to $50,000. Some couples may have to adopt children instead due to various reasons. This often costs around $43,000.

Read More: How To Save Money On Groceries

#2. Housing costs

This represents a cost to raise the child.

Average cost: $3,750 every year

As we discussed, this makes up the highest cost of childcare. Housing is often 29% of the total cost to raise a child. That’s roughly $3,764 per year or $314 per month.

Note that this only considers the costs that the USDA tracked. It couldn’t account for some factors in its data gathering. After all, each family has different needs.

For example, some of them may have extra bedrooms, which could bump up the costs. A family may spend more on moving to a new home with a large backyard.

#3. Food costs

This represents a cost to raise the child.

Average cost: $2,794 per year

This is the second-largest cost to raise a child as it takes up 18% of the total budget. The Official USDA Food Plans of 2020 show children’s average food spending.

It divides the costs into four spending ranges: thrifty, low-cost, moderate-cost, and liberal. The study says a “low-cost plan” costs $131 to $214 per kid, while the “liberal plan” costs $182 to $327.

If you compare it to the USDA Food Plans of 2021, you’ll notice an increase. The thrifty plan per month now ranges from $140 to $229. The liberal plan now costs $193 to $348.

#4. Education and childcare costs

This represents a cost to raise the child.

Average cost: $37,400

These are other significant costs to raise a child, but they could vary depending on their needs and age. You will likely spend the most while your child is in preschool.

Once your kid enters school, you will likely spend less on their education. Most parents also have to spend on childcare because they have to leave home for work.

Spending for an in-home care center is around $870. Meanwhile, you might have to pay $2,450 for a nanny. You could get rid of these by working a remote job!

#5. Transportation

Average cost: $1,947 per year

Your kids will soon have to leave their homes. Perhaps you need to drive them to the daycare center. They might need a ride for soccer practice or other activities if they’re older.

That’s why having a car is a must for most families in the US. They have to choose the right car because they will have to handle additional costs like car insurance and fuel.

SUVs are often the number one choice because they provide space and safety. You might want to click here to see the best family SUVs of 2022.

#6. Other expenses

Average cost: $2,856 per year

The USDA also reported three other costs of raising a child: health care, clothing, and miscellaneous goods and services.

These consist of the 22% of what parents spend on one child or around $2,856 per year. Let’s take a closer look at each of them below:

  • Health care makes up 9% of the cost to raise a child, which is $1,168 per year. This includes out-of-pocket spending for health insurance premiums and family medical bills.
  • Clothing is 6% of the total expense or roughly $779 per year.
  • Miscellaneous goods and services make up 7% of the $909 per year. This accounts for sports equipment, video games, and other stuff your child likes. This also includes the small costs of living like hair cuts and toothbrushes.

Physical costs of raising a child

This is a family

Parent spending isn’t the only thing you should consider when starting a family. While it involves numerous financial decisions, its other costs have no monetary value.

You have to consider the toll this could take on your body. Fathers may have to spend more time helping their spouses care for their babies. Some have to take overtime to earn more for the family.

If they have a full-time job, they might have to get a part-time one. As a result, fathers tend to be more tired than ever. Fortunately, remote jobs could serve as less-stressful options for side gigs.

Mothers will stay up late because babies tend to wake up and cry at night. Moreover, childbirth may leave lasting impacts on a woman’s body that’s hard to remove or conceal.

Now that both parents spend more time raising a child, they might not have time to work out. As their physical fitness declines, they’re more likely to get out of shape.

Emotional costs of raising a child

This is a family

Having children can also be taxing on parents’ minds. After giving birth, a mother may feel tremendous anxiety as she realizes the responsibilities of parenthood.

This is natural as this is their first time accepting such responsibility. Unfortunately, this could cause major behavioral changes to harm the mother and her child.

This is called postpartum depression, a major concern for families. That’s why it’s a good idea to have someone accompany a mother after she gives birth.

Of course, the costs to raise a child aren’t always as dire. Still, you will have to live with missing out on things you used to enjoy before becoming a parent. Let’s take a closer look at each one:

  • You might miss hanging out with friends because you’re too busy with your family.
  • You may not have enough time for hobbies and other interests.
  • Parents may struggle to maintain peace of mind with their children. They get new reasons to worry for their kid as it grows older.
  • Parents may also feel stuck in their lives. This is because they have to remain in the same home or job for their kids.
  • You may lose privacy as you’ll have a child nearby almost 27/7.
  • The lack of fun and sleep could cause some parents to feel depressed.

Note that your experience as a parent may differ. Some can balance their time to do still the things they used to do before parenthood.

Should you have kids?

This is a family

You might get the impression that having children is nothing but a difficult ordeal. Yet, parenthood can be a source of joy and satisfaction for many people.

They see their kids as an extension of themselves. As their children gain new experiences, the parents also feel enriched. Some enjoy hanging out with their kids.

Parents may treat their kids as another buddy they can bring to activities. While some dislike lack of privacy, people love it since it means they won’t be alone.

The costs to raise a child may serve as challenges that can help you develop as a person. If you handle time with your kids well, you might manage work schedules better.

Deciding whether you should have children or not rests on you and your partner. After all, you will be the ones who will care for them. Just remember that most choices involve trade-offs.

It’s a classic idea in economics, which means that you give up other choices when you pick an option. There are costs to raising a child, but there’s also a cost to not doing so.

This trade-off happens for these decisions because you have a limited amount of time. You only have a limited period to experience being single and being a parent.

The key is not to find the perfect option. Rather, you and your partner must find worthwhile benefits worth the potential issues.

Final thoughts

Having a child requires a lot of planning. Make sure to consider all the costs to raise a child beforehand. You might want to learn a few money management skills for this too.

This means optimizing a budget based on your potential expenses and current earnings. Do this well, and you will be able to pass on excellent financial literacy skills to your children.

You could start by reading more Inquirer USA articles. Those will help you learn more about finance and budgeting. You may even find investment options for your kids.

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TAGS: childcare, how to, interesting topics, USFINANCE
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