t’s no secret that it’s expensive to raise kids. Giving birth alone costs between $8,800 and nearly $30,000 depending on the state. And that’s just the start. From diapers to daycare on to camps and college, parents rarely get a break from spending money. Adding up the annual expenses incurred by kids can be daunting. But having the number at hand can be invaluable for budgeting more. So, how much does it cost to raise a child per year?
The answer is complicated. Costs vary widely depending on income, geography, age of children and parental discretion. And it gets trickier still after divorce, whose child raising costs can look vastly different than what married couples face. Income can take a hit after divorce, which is unfortunate, as being a single parent often incurs additional expenses.
In this article, we’ll talk about the average cost of raising a child and explore how divorce influences expenses.
We’ll cover important questions like:
The most expansive and detailed overview of childraising costs comes from the U.S. Department of Agriculture’s 2017 report Expenditures on Children by Families, 2015 also known as “The Cost of Raising a Child.” The comprehensive, national report estimated that middle-income, married parents of children born in 2015 would spend child born in 2015, would spend between $12,350 and $13,900 per year on their children outside of higher education costs for an average total of $233,610 from birth through age 17.
But those numbers don’t tell the whole story. The cost of a child can vary wildly depending on a child’s age, the size of the family, state of residence, income and more. Personal parental choices like opting for private school or buying cars for teenage children can drive up the total cost, too.
So, how much does it cost to raise a child per year? To some extent, the answer changes depending on the parent. But by using the USDA report as a starting point and keeping in mind key variables that influence the cost of kids, we can form a fairly clear picture of family spending.
If you and your co-parent need or want to draw up a comprehensive list of child expenses, here’s what you need to include.
Basic living expenses account for the biggest chunk of child raising costs. This includes:
Of those basic expenses, housing costs are the most significant, amounting to 29 percent of the costs of child-raising overall for middle-income, married families. The USDA found that food costs are the next most significant category, totaling 18 percent of the average child rearing cost. Despite the frustration new parents feel from buying diapers and clothes to replace items kids quickly outgrew, clothing was the smallest expense, at 6 percent.
How to save on basic needs: Although these items constitute the biggest expense and reflect essential needs of children like food and shelter, there’s still wiggle room. While housing costs are usually fixed, barring dramatic changes like downgrading from a house to an apartment, parents can choose what their kids will eat and wear. Sometimes, creativity and research leads to significant savings. Parents of newborns can consider cloth diapers, for example. And no matter your children’s age, you can cut costs through buying groceries in bulk and outfitting them with secondhand clothing.
To reduce your biggest expense, housing, patience can be a great help. If you’re eyeing a bigger home, wait until you’ve saved up a bigger down payment or stay with extended family for a while.
The cost of child care varies dramatically state by state and by types of providers available to you. Some costs associated with caregivers include:
Your options and childcare costs are driven by where you live. For example, while annual daycare tuition is almost $21,000 on average in Massachusetts, the Mississippi average is only $5,436 while the costs of full time babysitters and nannies vary just as widely depending on location.
It’s important to note here that most child care cost calculations assume that parents are married couples. That often leads to sticker shock for divorced parents, who find that expenses like child care can be much higher for single-parent households. For example, working single parents often can’t pick a child up from school and need to pay for extended childcare hours and higher transportation costs.
How to save on child care: This area has a lot of financial flexibility, but cheaper options often require sacrifice. Maybe you don’t need to enroll your child in the most expensive preschool or exclusive private school. Often, home daycares are budget and kid-friendly options. Or you can also try trading child care with friends if you just need occasional help.
Finally, check out assistance programs for lower-income families if they apply to you. There’s often more help out there than you may realize.
The USDA report found that school expenses were the third largest cost of raising a child, taking up 16 percent of budgets overall. Much like child care, education expenses vary depending on geography, personal choice and other factors. However, there are guaranteed to be some costs associated with schooling for every parent:
Some parents will also take on additional education expenses:
How to save on education: Small actions and forward thinking can cut down on your education expenses. August isn’t the only time to shop for back to school items. Keep your eye out and buy school supplies whenever they’re on sale throughout the year.
Your choice of schools can greatly affect your bottom line. In the elementary, middle, and high school years, you might find charter schools can offer a better quality education than your local school without the private school price tag. Home-based schooling could also reduce transportation and other costs.
Perhaps the greatest area in which parents need to save is in post-secondary education. The cost of college is steadily increasing, so you’ll probably want to seriously consider whether your child’s plans require a four-year college education.
If you decide college is necessary, you can look into college savings plans while your kids are young. If it doesn’t, many alternatives to college lead to solid career paths.
As you likely know, the American health care system can be difficult to navigate and affects each family differently. You can’t predict your’s child medical needs, but you can set your expectations for spending on the following items:
How to save on health care: A reliable method for cutting down family’s health care costs is investing in healthy habits. With consistency, simple, everyday practices can act as preventive solutions over time. For example, high-quality nutrition and vitamins, regular exercise, and annual check-ups with a pediatrician all contribute to better overall health. If these are available to you, they could reduce the chances that your kids will catch frequent colds and need medical care.
When your child does need to visit a doctor, it’s best to know your insurance plan inside and out — if you or your co-parent have one that covers your child. Choose in-network providers when you can so your per-visit cost is as low as possible.
If you don’t have insurance, look into whether your state offers free or discounted health plans for children.
It’s also wise to learn about your right to negotiate payment plans with your doctors for times when you receive larger-than-expected medical bills. You may have more options to lower treatment costs than you may think.
There’s no guarantee that child support payments will be part of your divorce finances and co-parenting arrangement. But if they are, they’re likely to cover some of the core needs of your child — the categories we’ve covered so far.
Family law varies from state to state, so it’s important to check on the child support guidelines that apply to you before assuming how much child support you’ll pay or receiving.
How to save on child support: There’s not much flexibility with a child support obligation, especially if it was established by a court order. Keep in mind that the amount you’re required to pay can change if your income or circumstances change significantly.
Health insurance may be the primary insurance category that comes to mind, but parents need to investigate other forms of insurance as well. Primarily, those will be:
Life insurance is optional but provides a great sense of security when you have children who depend on your income. This is especially true when you’re co-parenting and unsure of whether your children’s other parent has life insurance. There are many different types and coverage amounts to choose from, so set aside some time to research what’s right for you.
Auto insurance, however, is a must-have for parents of teens. Once your children are old enough to drive, you’ll need to add them to your auto insurance policy whether they have their own vehicle or not.
How to save on insurance: Traditionally, the most affordable and appropriate life insurance policies for parents will be term policies.
To lower the cost of auto insurance for your teen or young adult, ask the insurance company about multi-car discounts and consider increasing your deductible. And tell your kids to hit the books—some insurers offer good student discounts that allow parents of higher achieving students to pay reduced insurance premiums.
Extracurricular expenses are usually outside of the scope of the question “how much does it cost to raise a child,” but many parents want their children to enjoy some enrichment. And enrichment often comes with a price. This category of child expenses includes things like:
How to save on extracurricular activities: This is a tough area to whittle down costs. You may have to say no to your kids and to parental peer pressure. Keep in mind, you don’t know details about other parents’ incomes or how they approach their budgets. Even if your children’s friends are participating in expensive activities, you don’t have to follow suit.
Instead, you can choose to sign your kids up for school-sponsored sports teams or clubs instead of private leagues. There’s also the opportunity to look for free ways for them to get involved in the community (e.g., volunteering at an animal shelter).
Itemizing every expense parents can face is impossible. The truth is, this list could go on forever. New miscellaneous expenses arise every day, with each one more miscellaneous than the last. But some of the biggest ones are listed below.
Keeping track of every financial responsibility that pops up throughout a child’s life can be overwhelming, especially when you’re trying to split expenses fairly with your co-parent. It’s best to use an app like Onward so you always have a record of who owes whom, and an easy way to propose new shared expenses for your kids.
How to save on miscellaneous expenses: Saving on the extras is possible with a little research, compromise, and creativity. Search for coupons for family activities, don’t be afraid to negotiate your share of an expense, and go for “staycations” or birthday parties at home when you can.
So, how much does it cost to raise a child? Unfortunately, it’s nearly always a lot more than you’d expect.
For most, becoming a parent entails a crash course in budgeting or financial planning, whether they want to or not. And that’s particularly true if you get divorced.
But all is not lost! While the expenses are daunting, they’re not insurmountable. With some forethought and creativity, it’s possible for parents to find flexibility in financial decisions big and small alike. You can’t plan for everything, but it never hurts to have a plan.
The total cost of raising a child is tough to nail down. Luckily, one thing is certain: parenting is worth it.
Chelsea is a twice-divorced mom of two boys. She is happily single parenting and doing her best to balance two simultaneous co-parenting relationships. Despite the complications, Chelsea can see the beauty in her story and believes healing is possible for the whole family.