What Does it Cost to Raise a Child?

One of the greatest moments in life is welcoming a new baby into the world. Surrounded by a loving family, a newborn child has the potential for so much while bringing years of pride and joy to their family. Of course, there is a hefty cost to raising a child - diapers, daycare, data plans and drives to soccer practice.

Average cost to raise a child in the US

The U.S. Department of Agriculture has been trying to put a number on that question since 1960. Their latest update calculates the average cost of raising a child to age 18 is $245,000. Nearly a quarter million dollars to raise one child and that is not including the cost of college tuition.

The cost is even higher for the average family in the Northeast United States. The current projected yearly expense to raise a child in a two parent home is $18,525. In a single parent household with income below $62,000, the yearly cost is estimated at $10,450 while doubling to $22,000 in a one parent home with income over $62,000.

It should be no surprise that this number continues to rise each year, often outpacing inflation. There are seven primary areas that child-rearing expenses can be categorized.

Yearly Expenses to Raise One Child

Breakdown of Costs to Raise a Child

Housing expenses are going up

Housing is the biggest expense, comprised of the cost for mortgage or rent, taxes, maintenance and repairs, utilities, furniture and other living expenses. This number will continue to rise with the increased cost of utilities and the price of living in the digital age with cellphones, 500 channel cable packages and the need for digital devices and data plans.

Cost of food

Groceries, dining and school meals, make up over 15% of the overall cost of raising a child. The cost for feeding a child nearly doubles from infancy to teenage years. Rising food prices and greater emphasis on eating fresher, healthier foods is going to continue to push this number higher.

Transportation is necessary

After-school activities, sleepovers with friends, and doctor appointments mean you’ll need efficient and safe transportation for your child.The cost of maintenance and gas for your car will increase with added usage. Good news is this category has seen some relief in recent years with the price of gasoline down almost $2 a gallon from the high in 2008.

Cost of healthcare

Another child rearing cost that is on the rise is healthcare which consists of insurance, uncovered medical expenses, prescriptions and other health related costs. The cost for a child’s healthcare continues to outpace inflation.

Clothing expenses

Many parents are excited to relieve themselves of the burden of buying diapers only to find years later the high cost and pressure of clothing their children with the latest trends. Fortunately, this is one category where expenses can be trimmed through hand me downs and thrifty shopping.

Child care & Education

Child care & education expenses are the second largest expenditure. Even after adjusting for inflation, the cost for child care has grown twice as fast as the other categories since 2009. The cost for daycare can be a major burden during the first 5 years of a child’s life. Full-time child care can easily cost over $30 a day per child. It is not uncommon for a two-child family to pay over $20,000 each year for daycare.


Miscellaneous expenses for raising a child in the 21st century include the cost for sports, entertainment, personal care items and any other expenses not included in the previous categories. This expense fluctuates greatly based on lifestyle and income. A child that plays soccer on the local rec team will be much cheaper than one on a traveling hockey team, where expenses can get into the tens of thousands of dollars.

Importance of Financial Planning

This all sounds pretty scary, right? This is meant to be an eye opener on the importance of proper financial planning for adding a new member to the family. Planning ahead, anticipating expenses, budgeting and saving all help families focus more on enjoying life’s moments instead of worrying about them. Need help with all of this? Our CHROME reps are certified personal financial counselors. Schedule an appointment today.