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Kids & Money: How Much Does It Cost to Raise Your Child?

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Every year, it seems as though there is a story on the high cost of raising a child. This year, CNN Money pointed out that experts expect the average child to cost $226,920 to raise from birth to age 18. That works out to right about $13,830 a year. Of course, that’s just for a middle-income, two-parent family. The numbers change if you have a different income, or live in certain areas.

You can go to the USDA web site and use their Cost of Raising a Child Calculator to get a more personalized view of what it should cost to raise a child. According to my income and location, the USDA thinks I should be spending $26,463 a year on my son. I’m pretty sure I’m not spending that much. But I thought I’d work it out anyway.

How Much Am I Spending to Raise My Son?

Looking at the USDA numbers is kind of daunting. Costs listed include housing, food, transportation, clothing, health care, child care and education and other. The biggest expense on the list is housing, which I think is kind of silly, since my husband and I would probably live in the same size house, regardless of whether we had our son or not. At any rate, here is how we stack up so far this year.

I used actual figures for the first three quarters of the year, and then estimated fourth quarter spending based on our current pace, assuming it stays the same (although I bet we actually cut back a little). The only exception is “other,” where I include toys, since my son’s birthday and Christmas are both coming up; I based this on last year’s spending. Also, since I work from home, and have no need of child care beyond babysitting when my husband and I go out, I include my son’s summer camps in that category, as well as sports activities and music lessons. For food, health care, housing (I included utilities) and transportation, I took my family’s total costs and divided them by three to get the individual amount for my son.

USDA Actual
Housing $10,450 $6,560
Food $3,200 $4,371
Transportation $3,263 $1,096
Clothing $1,238 $574
Health Care $1,238 $1,368
Child Care & Education $4,450 $2,362
Other $2,625 $980
Total $26,463 $17,311

That’s more than I expected it to cost, and more than I spend last year on my son, but he is also involved in more activities this year. And we clearly spend a substantial amount of money eating out, which is why the average food cost is higher. However, I am skeptical that my son is eating as much as my husband and myself at this point (and he doesn’t eat out with us each time, even though I included all our restaurant visits in food costs), and, as I mentioned before, my son really isn’t adding to our housing costs. Without housing costs added in for my son, the yearly spending on him drops to being on track for $10,751 this year.

It’s clear that spending on my son doesn’t have to be what the USDA and others expect. How much do you spend on your kids?

{ 25 comments, please add your thoughts now! }

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25 Responses to “Kids & Money: How Much Does It Cost to Raise Your Child?”

  1. Steve says:

    I am surprised you find the housing cost silly. How do you fit a kid into an existing home without changing anything else? In my household, we managed to squeeze our first child in, but if and when we have a second, we’re planning on moving. The only reason we’re even putting up with the tight quarters is because we believe it to be a temporary situation. Of course I can come up with examples on both ends of the spectrum – a household with 5 kids living in a 1 bedroom apartment, a childless couple with a 5 bedroom, 3000 s.f. house – but in general, the size of a household’s housing is going to be proportional to the number of family members living there (limited by available money of course).

    • Miranda says:

      Oh, I agree that in some cases having children will dictate the size of a home. Our home is a good size for two or three people. Our home is fairly modest, and we’d probably have the same square footage without our son, and we’re not planning to buy a larger home to accommodate our son. We can just move rooms around when he gets old enough to need more space. I probably should have qualified by saying that including the cost of housing for our son was silly FOR US. I guess my point is that, really, it’s all very personal — as most financial situations are.

      • Courtney says:

        Space isn’t the only consideration in housing costs. Sometimes people buy houses in better school districts, and thus spend more money (and possibly also have higher local and/or property taxes) than on an equivalent house in a less stellar school district.

    • mannymacho says:

      $1000 per month seems like a huge differential between what you would have with or without kids, but I could be wrong.

      In any case, I think that even as much as they may cost, kids are worth every penny – certainly the greatest investment I have made!

  2. thunderthighs says:

    There is a constant stream of stories on the costliness of children in the media. As if I needed any more convincing. No kids for me!

  3. cubiclegeoff says:

    The calculator says $27,613 for me. I agree with you though that housing isn’t that big of a deal. We would probably live in the same size house with or without our kid, so it doesn’t change anything. And if we didn’t have a kid, we would probably live in a more expensive area and it would probably even out. Transportation is another area where it doesn’t really matter. We have the same cars.

    Where it is under is with healthcare (even though family and couple coverage is the same amount for us, the cost is higher than $1,075 a year), and child care. I wish child care cost only $7,238 a year, and we take our kid out for the summer, and it’s the cheapest, most reasonable option we could find.

  4. Stacey says:

    When you add up all the things we DON’T do/have because we have children, it’s a wash! Seriously: We don’t vacation in exotic, fun places (And I know we would if we didn’t have 3 extra plane tickets to buy!) We don’t eat out hardly at all because of the expense of childcare AND because I’d rather eat in with my kids having a weekly carpet picnic of pizza and pop while watching a movie than dropping $50 plus bucks for some so-so steak at a steakhouse! We choose to live in a very rural area to give our children the best of this world. WIthout them? We’d probably live in a larger city with extra expenses. My point being: without children, we’d spend that money anyway on ourselves. I’d rather have (and spend it on) my boys.

    • cubiclegeoff says:

      I agree. We would probably spend that money anyway. And for now, it just means it takes longer for us to get to the amounts we want to spend to do the things we want to. And that’s fine.

  5. freeby50 says:

    The housing figure is grossly inflated.
    Total spending on housing nationwide is around $17k per household with 2.5 people average.
    So theres no way people spend +$10k a year on average for a single child.

    It is however legitimate to add an additional cost for a child. It just shouldn’t be that inflated. 2 bedrooms costs more than 1 bedroom. So there are additional costs. But whats a 2 bedroom apartment cost to rent compared to a 1 bedroom? An extra $100 or $200? How much more expensive is a 3 bedroom house versus a 2bedroom?

    Now many people would have had 2+ bedrooms anyway so they aren’t really facing immediate out of pocket extra costs for that extra bedroom. My home has 3 bedrooms, so when I got married and have children it doesn’t cost extra. Its the same house and I didn’t / won’t upgrade (well at least not yet). But why did I get a 3 bedroom house to begin with? It wasn’t cause a single guy needed 3 bedrooms. If I knew I’d never get married or have kids then I’d probably have bought a smaller house with smaller costs from the start.

  6. Dave says:

    I wish my total cost was $17K a year. I spend over $15K just on daycare.

    I do challenge many of these categories, because housing, transportation, etc might not be any different without kids. Although, if I were still living in my 2 bedroom condo I had pre-kids, I think I’d feel rich. :)

    I even challenge the food category – my daughter doesn’t eat that much and we don’t make any more food that we did before she came along, we just eat slightly less. I could see this category being large if you buy formula or other special food, just for your kid…

    • Courtney says:

      Half the parents I know have kids with food allergies – have to by special milk, gluten free stuff, etc etc. That’s not as cheap as ‘regular’ food.

  7. Hazzard says:

    I definitely think these numbers are pretty inflated. We have one child and have had no impact on housing. The key expenses for us have been daycare ($150 per month), food, ($100 a month or so), transportation ($100 a month TOPS), clothing ($40 a month or so considering we trade clothes among friends), and healthcare is probably somewhere around $100 a month. That’s a heck of a lot less than the estimates that the USDA have come up with. I’m sure the costs are very different as you move around the country and I may be 50% off on my estimates but that’s still a long way from the USDA estimate. I agree that the housing number seems kind of crazy.

    • Courtney says:

      Your daycare is very, very, very cheap. There was just a report released that the median daycare cost for two children under the age of 5 exceeds the median cost of rent in every single state in the country.

    • cubiclegeoff says:

      You spend half the amount on 1 month of day care than I do in a week. I’m jealous.

  8. Bob says:

    Cost increases for our family:
    Childcare $600 each/month
    Soccer, AAU, etc. $300-500 each/season
    Food $200/month increase
    Housing increase $500/month, minimum
    Healthcare for kids $390/month
    Larger vehicle ?????
    Clothes, beds, etc. ?????

    The estimates by CNN are very conservative, realistic expenses for our family are much higher. As stated by others, financial planning should be considered when adding children to the family. There are multiple reasons why family size is shrinking, one which is financial.

  9. Shirley says:

    There’s not a doubt in my mind that life would have been financially easier without raising five children, nor is there a doubt that raising them enriched our lives ten times whatever that cost. We simply did whatever needed to be done and took it in stride.

    Housing: We bought this 3 bedroom, 2 bath home when I was 21 and still live in it as retirees. Organization was the key here.

    Food: Once a baby was done with formula and until the boys reached their teens, food was not all that much more than for the two of us might have been. Granted, we ate a lot more casseroles than steaks, but meals were plentiful and healthy. Fresh fruit and veggies were always on hand for snacks.

    Clothing: I sew and was able to make many of their clothes and hand-me-downs were not frowned upon. We had employer sponsored health insurance and luckily were never faced with any crisis. Our co-pays/deductibles were manageable.

    YMCA Daycare was only three days a week because we each chose different days off from work in order for one of us to be at home four days a week.

    Education: All except one went to public school and I volunteered in each to keep a close eye on progress, needs and events. It’s rather amazing how much less you spend if you know exactly what is needed. College or a trade school was something they did mostly on their own.

    Our life was not glamorous nor was it filled with wide-world travel, but it sure was fun and was often exciting. I would do it again in a heartbeat.

  10. Maggie says:

    I spend 47,200 a year on my son in college and that covers his apartment, spending money, car, insurance and tuition. They cost more as they get older.

  11. david says:

    A kid costs well over half a million dollars. Instead of spending $600 every month on the kid you could have invested that same money in your home compounded @ 12% and after 20 years you will have $551,915 which is the opportunity cost. Better to never marry which cause kids

  12. Diane says:

    I don’t understand the math here. We raised 3 children and never spent $800 – $1000 a month on them. My husband and I (or even just one of us) would still have had to rent or own a home for ourselves, bought groceries to feed ourselves (kids don’t eat much until they become teenagers (and you can still sensibly limit it then, too) and entertainment for the two of us, plus our insurance, utilities, etc. So a child that costs $800 a month must be getting some sweet designer clothes and eating out every day and be in some very expensive activities. I don’t understand where these inflated costs are coming from. So you are telling me that a family with 4 kids are paying $4000 a month out for each child, plus their standard living expenses for the parents? How many families do you know that make that kind of money? Once children are in school, daycare costs are minimal, so where is all this money going??

  13. Diane says:

    I don’t understand the math here. We raised 3 children and never spent $800 – $1000 a month on them. My husband and I (or even just one of us) would still have had to rent or own a home for ourselves, bought groceries to feed ourselves (kids don’t eat much until they become teenagers (and you can still sensibly limit it then, too) and entertainment for the two of us, plus our insurance, utilities, etc. So a child that costs $800 a month must be getting some sweet designer clothes and eating out every day and be in some very expensive activities. I don’t understand where these inflated costs are coming from. So you are telling me that a family with 4 kids are paying $1000 a month out for each child, plus their standard living expenses for the parents? How many families do you know that make that kind of money? Once children are in school, daycare costs are minimal, so where is all this money going??

  14. sally says:

    Health care is a lot more than that!


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