The Average Cost of Raising a Child


The Expenses of Childrearing

Although raising children can be one of life’s most rewarding experiences, childrearing can also be extremely expensive. The costs begin before the child is born. Parents prepare for the baby by purchasing new gear and tools, and the expenses continue beyond college. The United States Department of Agriculture estimates the cost of raising a child in 2012 (based on a middle income family) until the age of 18 is $241,080—and that doesn’t include college.

The USDA breaks down the costs of raising a child into categories, which include:

  • Housing
  • Food
  • Transportation
  • Clothing
  • Health Care
  • Child Care and Education (not higher education)

The amount you will pay in each category varies depending upon the number of children you have, their age, your geographic location, income and marital status. Those with dual or higher incomes tend to spend more.

Estimating the Costs of Childrearing

Because the costs are different for each family, the USDA’s calculator application allows you to input personal parameters to determine how much your children cost annually.

This calculator can provide a good idea of the expenses you are likely to incur over time. You can also check the sample results page for a general idea of the expenses you might incur as a parent.

For example, a two-parent home in the Midwest with an income between $56,670 and $98,120, estimates each year, parents will spend:

  • $4,688 for housing
  • $2,713 for food
  • $2,100 for transportation
  • $850 for clothing
  • $1,088 for healthcare
  • $2,275 for child care and education (not including higher education costs)
  • $1,413 in miscellaneous expenses

Based on these costs, the annual total would be $15,125 per child. According to the USDA, the national average total annual costs are $16,950.

Keeping Costs Affordable

While calculators can estimate how much it can potentially cost to raise a child, every family and every situation is different. Below, are four ways to keep costs down so you can raise your kids without breaking your budget.

  • Purchase the minimum in baby items: Many products are marketed to new parents and not all of them are necessary. Here are thetop 7 baby items you don’t need. Avoid getting caught up in baby fever. Instead wait, and buy only what you need. Then purchase additional items as a need arises.
  • Use hand-me-down and used items: While some items you should not buy used, such as car seats and cribs, you can purchase many of the items that you need at second hand stores and from people whose kids have outgrown them. When you inherit hand-me-downs make sure they are not a risk to your child. Check the wear and tear on the used items for safety.
  • Invest in reusable items: If you plan to have multiple children invest in tools that you can use over and over again. For example, cloth diapers can be a great investment. You can buy them for your first child and use them for all of your children, saving a fortune on diapers. There are several baby items that can be recycled and reused for other purposes around the house. Be creative, be crafty, and have fun recycling your baby items.
  • Start an education savings: Grandparents and other family members love to give gifts to their grandchildren. Rather than receiving toys and clothes that your kids will quickly outgrow, set up tax-advantaged education account and ask loved ones to make contributions for special occasions.

While it is important to consider the affordability of having children, remember that you can make your budget fit your lifestyle. Remember, children are always a blessing, not to mention they keep you young.

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