Raising a child can be an emotionally rewarding experience. But it can also be very costly. Statistics from the Brookings Institution, an economic think tank, show that the average middle-income family with two children will spend $310,605 to raise a child born in 2015 up to age 17 in 2032.
This number represents a significant jump from the figure published by the U.S. Department of Agriculture (USDA), which estimated the overall cost to be $233,610 in 2017.Understanding the costs can make shaping a parent’s financial plan easier.
Key Takeaways
- Middle-income parents will spend an average of $310,605 for a child born in 2015 until they turn 17 in 2032.
- The greatest expense associated with raising a child is housing.
- The cost of childcare varies widely and depends on where a family lives.
Housing: 33% of Income
An expense associated with the cost of raising children is housing. This can easily make up a sizable chunk of a parent’s budget, especially when you factor in mortgage or rent payments, taxes, insurance, repairs, utilities, maintenance, and household goods.
According to Consumer Expenditures Data for 2022, the typical household spends $24,298 on housing per year. Meanwhile, U.S. Census Bureau data shows that the median household income in the United States was $74,580 in 2022.
These numbers offer a broad idea of how much families pay for housing. Costs vary depending on geographic area, type of dwelling, and family size. Economic conditions can also influence the cost of housing for families. Rising house prices make it more expensive for families to purchase a home. Likewise, rising inflation can push up rental prices and raise prices for consumer goods.
The U.S. Department of Housing and Urban Development offers housing assistance programs to supplement the cost of housing for eligible lower-income families on their website.
Food: 25% of Income
The amount a family spends is based on the number of children in the home, household income, geographic region, and preferred diet. The USDA issues monthly reports on food costs at four levels: thrifty, low-cost, moderate-cost, and liberal. These reports consider different household sizes with children of different ages.
The reference family consists of a male and a female adult ages 20 to 50 and two children in the 6- to 8-year-old range and the 9- to 11-year-old range. Here’s how the average food spending numbers for the reference family add up as of Oct. 2023:
- Thrifty plan: $975.30
- Low-cost plan: $1,059.90
- Moderate plan: $1,313.60
- Liberal plan: $1,585.80
At the low end, a family of four spends about $11,700 per year on food at home. At the high end, they spend more than $19,000 per year on food. That’s around 25% of their income based on the median household income of $74,580.
$310,605
The total cost to raise a child born in 2015 to age 17.
Childcare: 7% to 23% of Income
Childcare costs can easily use a sizable part of parents’ budgets each year. How much families pay can depend on the type of care needed, the number of children who need care, and where the family lives. In 2022, costs ranged from $5,357 for school-age home-based care in small counties to $17,171 for infant center-based care in large counties.
Planning For College
The essential expenses don’t account for the cost of a college education. Higher education can add to the total for parents who help pay for their children’s college costs. How much parents pay for college can depend on whether the child:
- Attends a two- or four-year school
- Goes to a public or private university
- Is charged in-state or out-of-state tuition rates (at public universities)
The average annual cost (in-state) for the 2023-2024 academic year totals $24,030 for a public college and $55,190 for a private college. It includes the cost of tuition, fees, and room and board.
What Other Costs Are Involved in Raising Children?
Besides the cost of housing, food, childcare, and education, parents will need to factor in transportation, healthcare and insurance, clothing, extracurricular activities, sports and hobbies, and family trips or vacations.
How Can Families Save Money While Raising Children?
Families can look for parent-friendly tax credits and deductions that can reduce their tax liability or help them get some money back, like the Child Tax Credit.
How Can Families Save for College?
Families can benefit by taking advantage of 529 plans or other investment vehicles to keep kids from graduating with a large amount of debt. A 529 plan is a tax-advantaged savings plan to encourage saving for future education costs. The plans are sponsored by states, state agencies, or educational institutions and authorized under Section 529 of the Internal Revenue Code.
The Bottom Line
The financial side of child-rearing can be daunting and expensive. Families allocate money to housing, food, childcare, and even college. Parents can research housing assistance available to qualified families from HUD, childcare discounts that may apply for multiple children, and IRS tax credits.
