Counting the Cost of Raising a Child

USDA Estimates the Cost of Raising a Child at Nearly a Quarter of a Million Dollars

It’s tried-and-true advice to count the cost of something before making a commitment. Recent projections by the U. S. Department of Agriculture (USDA) show that the cost of raising a kid – a big commitment – is on the rise.

In a 2014 USDA annual report, Expenditures on Children and Families, calculations indicate that a middle income family with a 2013 newborn should expect to spend about $245,340 – nearly a quarter million dollars! – on raising that child up to age 18. The annual child-rearing expenses for that same family ranged from $12,800-$14,970, depending on the age of the child.

The calculations the USDA used include:

• Food
• Housing
• Child care
• Education
• Other common child-rearing expenses

While this represents an overall 1.8% increase from 2012, the percentages spent on each expenditure category remain about the same, with housing representing the largest piece of the pie.  This image shows the breakdown:

The cost estimates did not include expenses that you might want to include in your own calculations, such as the actual cost of pregnancy, or any expenses commonly incurred after age 18, such as higher education.

When it comes to cost, where you live matters

Want to raise your kids for less? Move to the south. Even better: move from the city to the country.

As in the past, the costs by location are lower in the urban South ($230,610) and particularly in the rural regions of the country ($193,590).

Cheaper in the past? You bet’cha!

How have things changed? While it likely comes as no surprise that child-rearing costs have risen over the decades, the total change is remarkable.

The USDA began tracking these statistics in 1960, back when the average expenditures on raising a child for a middle income, husband-and-wife family amounted to $25,229. Factoring in the cost of living, that would amount to $198,560 in 2013 dollars. But in 2013, that cost per child was actually 24% higher, at $245,340.

Cheaper by the dozen

Predictably, families spend less per child when there are more children in the household, as a result of economies of scale and the necessity of dividing the same income among more family members.

For example, when comparing husband-and-wife households, a single child family will spend 25% more per child when compared to a two child family. And those with three or more children spend an average of 22% less per child.

How much you earn makes a difference

The report notes that family income affects child-rearing costs. From birth up to age 18:

• A family earning less than $61,530 per year can expect to spend a total of $176,550 (in 2013) on a child.
• Middle income parents with an income between $61,530 and $106,540 can expect to spend $245,340.
• A family earning more than $106,540 should expect to spend $407,820. 

Controlling those costs

Since food is among the top three child-rearing expenses, how do you meet the challenge of providing food that is tasty, healthy, and yet affordable? Here is a resource to help with that: the ChooseMyPlate.gov website, featuring food purchasing and meal preparation tips to help you serve nutritional and affordable meals for your family. What you’ll find:

• The Healthy Eating on a Budget section, with tips and materials to make healthy choices while staying within your budget.
• 10 Tips: a nutrition series with a wealth of suggestions to help you get started toward a healthy diet.
• Recipes: an interactive tool to help with healthy meal planning, cooking, and grocery shopping.
• MyPlate Kids' Place: A section for children, with online kids’ games to get them engaged in healthy eating.

These USDA statistics are useful, not only for giving families with children an indication of expenses they might want to be prepared for, but also as a valuable resource for state governments in determining child support guidelines in foster care payments.

Having a child will be one of the biggest commitments you'll ever make, but it will also be one of the most rewarding. By knowing the costs in advance and preparing accordingly, you can help ensure your child will be well provided for.

Ric Moxley
Contributing Writer