How Much Does It Cost To Raise A Kid In The US?

How Much Does It Cost To Raise A Kid In The US?

Having kids is a luxury; however, not many people share the same realization. It may be painful to contrast the cost of raising a kid with the joy of having one to nurture, but it is wise to be aware of and plan for such expenditures.


Let's speak about statistics.


For many years, the United States Department of Agriculture produced an annual report that determined the average cost of bringing a kid to maturity, excluding college costs. That research hasn't been updated since 2017, but it indicated that the cost of parenting a child born in 2015 was $233,610. That is assuming the child was born into a middle-class, married couple. According to Bureau of Labor Statistics statistics, the figure climbs to $267,233 in 2021 dollars when adjusted for inflation.

The USDA derived its estimates from the annual Consumer Expenditures Survey. It discovered that the cost of raising kids varies by area, with the Northeast being the most expensive region in the country.

According to the USDA, typical spending for children born in 2015 is divided into the following percentages:


• Household: 29%

• Food: 18%

• Child care and education: 16%

• Transportation 15%

• Health-care services: 9%

• Miscellaneous activities: 7%

• Clothing: 6%


In terms of how much it costs to raise a kid in a year, the USDA estimates that a middle-class, two-parent household will pay $14,846 in 2021.

In 2019, LendEDU, an online marketplace for financial solutions, polled 1,000 parents with children aged one to three. They were especially interested in how much raising a newborn costs and discovered that parents paid an average of $13,186 during their child's first year, even though the median price was just $6,000.

Meanwhile, the non-profit Economic Policy Institute used 2017 statistics to calculate how much money families in the county need to maintain a modest but decent level of life. Adding a kid to a two-adult family in the Los Angeles metro region may increase annual expenditures by $24,236. Even in the Kansas City metro region, where the cost of living is much lower, one kid may add $17,869 to the family budget.

While average expenditures might be helpful for budgeting, they can often create an excessively pessimistic image of parenthood. Many parents can and do spend far less. Most the parents are of the opinion- "It's fine not to give your kids what Instagram suggests you should."


Factors Influencing Child-Raising Costs


  • While cost estimates can be a valuable baseline for parents, they may exaggerate some expenditures while disregarding others. "You have to consider the cost of living and family support," says Anthony Paul, managing director and co-founder of The Hamilton Group, a financial planning business in Greenwood Village, Colorado.
  • Grandparents nearby who are ready to babysit for free can almost cover child care costs entirely. Meanwhile, people who live in places with inexpensive housing, such as South Dakota and Michigan, may have lower monthly mortgage and rent costs.
  • However, there are drawbacks to relocating to a lower-cost-of-living state. According to Michael Foguth, a father of six and the founder of Foguth Financial Group in Brighton, Michigan, the expense of baby clothing is ever increasing. "Parents must purchase baby clothes suited for four seasons. You have to buy winter boots and jackets every year as the kids grow."
  • Children may incur more costs for school activities, sports teams, and technology devices as they age. One approach to reducing these expenditures is asking youth to work and pay for their discretionary purchases.


Creating a Baby Budget


  • The varied figures provide both good and bad news to would-be parents. The bad news is that the funds they have set aside for a baby may not be sufficient. However, the good news is that cost estimates vary widely since so many things are optional.
  • Instead of purchasing pricey technology, expanding the house for more room, and insisting on new stuff, parents may save money by making do with what they currently have. Consider purchasing used stuff (which is obviously in usable condition, because anyway your kids will outgrow them even before you know it!), taking advantage of grocery savings apps, and reconsidering costly family trips.
  • Rather than filling your home with toys, we suggest asking the family to contribute to a child's college fund. "Toys are a vacuum cleaner for your cash," Michael jokes.
  • Limiting extracurricular activities might also help you save money. It's fine if your child does not participate in a sport or activity every season. Children tend to learn more from seeing strife in their early years of life. They will learn to respect things and work hard toward their goals to achieve them.
  • Children do not have to be as pricey as the figures imply. Couples should assess their financial situation and willingness to forego creature comforts to have children. Those who decide to become parents may discover that there is eventually only one word to describe the expense of children: priceless.
  • Having numerous children can increase expenditures, although possibly not what people assume. Parents may already have a large enough house and car to support many children. Sibling discounts may also be available from child care providers. Furthermore, clothing and toys may be passed down to younger siblings, and purchasing food in bulk can result in a reduced per-serving cost.
  • In some circumstances, parents discover that what they expected to be pricey is not. "For some reason, I assumed I'd have to pay an arm and a leg every time I went to the doctor," exclaims one of the parents (from one of our surveys conducted in Ohio). That hasn't been the case since her boys, who are in first grade and preschool, are covered by their father's health insurance coverage, which keeps out-of-pocket expenses to a minimum.



While many couples debate whether they can afford children, Foguth believes that motherhood should not be reduced to a financial issue. Rather than asking if you can afford children, a better question could be whether you are willing to divert money from your present costs to meet your kid's demands. Foguth inquires, "Are you prepared to make financial sacrifices for someone else?"

Couples might anticipate immediate expenditures related to the birth or adoption of a child. However, parents typically have a lot of leeway in how much or how little they spend on their children. To summarize, careful preparation and consistent investing discipline guarantee that a family is better equipped to sail through any costs stress-free.

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