How Much Does It Cost to Raise a Child in America in 2020?

How much does it cost to raise a child?

Having kids is a major financial decision. 

We strive to provide the best for our kids.

Let’s see how much expanding your family may cost you:

Cost of Children: Stats and Facts (Editor’s Pick)

  • The cost of raising a child until age 17 is $233,610 on average.
  • Low-income married couples spend $174,690 on average to raise a child.
  • Low-income single parents spend $172,200 to raise a child from birth until age 17.
  • The average amount spent on raising a child in the Urban West is $245,460.
  • The average cost of vaginal birth in Alaska is $10,413.
  • The average cost of daycare for an infant is $20,415 in Massachusetts.
  • Raising a child to age 18 in Germany costs approximately $140,000.
  • 59% of millennial parents underestimate the cost of raising children.

Does it sound expensive? Don’t worry – not everyone spends that much money. But it is a rough estimate that will motivate you to start saving.

While this is not something we are comfortable putting a price on, it is still practical to financially evaluate a child’s financial impact

Now, let’s take a look at all the numbers in more detail.

Average Cost to Raise a Child

The United States Department of Agriculture has issued a report regarding the expenditures on children.  After tracking the expenses over the years, in their latest report they have calculated the following average costs:

1. The cost of raising a child through age 17 is $233,610 on average. 

(Source: United States Department of Agriculture)

If you are a parent with an organized spreadsheet of all of your expenses, you may have found that your costs were significantly lower or significantly steeper.

Now, you might be wondering: How much does it actually cost to raise a child, then?

The report estimates the expenses as they correlate to the number of primary caregivers. There is a different average for married-couple families – families where there are two parents. There is a different calculated amount for single-parent families – those with one primary caregiver. 

Then, the income bracket also gets taken into consideration. 

Married couples (before-tax income):

  • Lower-class income: less than $59,200
  • Middle-class income: between $59,200 and $107,400
  • Upper-class income: over $107,400

Single parents (before-tax income):

  • Lower-class income: less than $59,200
  • Middle and upper-class income: over $59,200

Naturally, the report found that the expenses of raising a child were higher for middle and high-income parents, as they were able to spend more on nonessentials and education.

There is one more thing that can be mentioned here. The latest data estimated only the expenses as they were in 2015. We can only expect that the average cost of raising a child in 2020 will be higher! 

2. Housing accounts for 29% of the total expenses on average. 

(Source: United States Department of Agriculture)

Housing is considered one of the biggest expenses of raising a child. It represents 26% of the costs for high-income families, 29% for middle-income families, and 33% for low-income families. 

This category includes:

  • mortgage payments
  • property taxes
  • home repairs
  • rent
  • utilities
  • furnishings
  • equipment, such as house appliances

However, bear in mind that if you are already a homeowner with an extra bedroom, you probably won’t see a drastic increase in expenses. Your utilities will be higher, and you will likely need to buy new furniture. You might also have to replace and repair things in your home more often. 

Parents who need to move into a bigger home see their housing expenses increase more significantly. 

3. Food accounts for 18% of the total child-rearing expenses on average. 

(Source: United States Department of Agriculture)

Housing and food are some of the main expenses for all families.  And while food is the second-largest expense for low-income and middle-income families, it is the third-largest for high-income families. But, we will get to that later.

As children age, food costs increase. Teenagers are the most expensive to feed, whereas the food costs associated with babies and toddlers are the lowest. However, parents that use formula can expect higher food costs on average.

4. Child care and education account for 16% of all expenses.

(Source: United States Department of Agriculture)

This category includes tuition fees, supplies, books, babysitting costs, etc. 

We already mentioned that for high-income families, the cost of childcare and education represents the second-highest expense. 

This happens mostly because high-income families can afford to enroll their children in schools with more expensive tuition.

What’s interesting is that more than half of the families didn’t report any expenses related to childcare and education. Merely 26% of lower-income married families have this expense. We can only assume that part of them can’t afford to pay for childcare, and some have a stay-at-home parent. 

5. Transportation represents 15% of all expenses on average. 

(Source: United States Department of Agriculture)

If we look at expenses as they correlate to the child’s age, transportation costs the most for teenagers. After all, teenagers can get a driver’s license. This, in turn, means that some families buy a vehicle for their children and include them in their insurance.

And speaking of insurance, according to the latest statistics, the average car insurance cost is the highest for teenage drivers. 

6. Healthcare represents 9% of the total child-rearing expenses. 

(Source: United States Department of Agriculture)

This category includes every out-of-pocket expense. These can be deductibles and premiums that aren’t paid for by the employer or another organization. 

As was the case with some of the previous expenses mentioned, this too increased as the children grew.

Though we are not surprised about the high healthcare costs – if there is anything we learned from looking at healthcare spending statistics, it is that taking care of your health can bankrupt you! 

So, at what age do the kids require the most money? We would have to say that taking care of teenagers is the most expensive in general. 

7. Low-income married couple families spend $174,690 on average to raise a child. 

(Source: United States Department of Agriculture)

We already mentioned that families with a before-tax income that is less than $59,200 are considered low income.

On average, they spend less than middle-income married couples, whose average expenses amount to $233,610.

8. High-income married couples spend $372,210 on average to raise a child. 

(Source: United States Department of Agriculture)

Married couples, whose before-tax income is higher than $107,400, spend $372,210 on average to raise their kid. 

So, how much do rich people in America spend on their children? Well, Bill Gates’ daughter is a talented equestrian and the proud owner of a $5 million condo!

No wonder the average expenses of high-income families are significantly higher! 

9. Low-income single parents spend $172,200 to raise a child from birth through age 17.  

(Source: United States Department of Agriculture)

Single-parent families with low incomes can’t afford to spend much on items that aren’t of primary necessity, so their expenses are lower in general. 

It’s noteworthy that child support payments are included in this estimate. 

10. High-income single parents spend $319,020 to raise a child on average. 

(Source: United States Department of Agriculture)

As was the case with high-income married couples, single parents with middle and high incomes have greater expenses. The average amount they spend also exceeds $300,000. 

High-income families spend almost double than low-income families. And when we compare the amount, it does put into perspective how bad US income inequality is. 

11. The average amount spent on raising a child in the Urban Northeast is $264,090.

(Source: United States Department of Agriculture)

Obviously, this is notably higher than the overall national average. To raise a child in the Urban Northeast:

  • A low-income family spends $204,840 on average
  • A middle-income family spends $264,090 on average
  • A high-income family spends $407,490 on average

Future parents should consider the cost of living in the area where they will settle. That way, they can determine their expenses more accurately. 

12. The average amount spent on raising a child in the Urban West is $245,460.

(Source: United States Department of Agriculture)

The Urban West is the second most expensive region for parents. To raise a child in the Urban West:

  • A low-income family spends $186,270 on average
  • A middle-income family spends $245,460 on average
  • A high-income family spends $387,810 on average

13. The average amount spent on raising a child in the Urban South is $232,050.

(Source: United States Department of Agriculture)

For parents in the Urban South, the average is almost the same as the national average cost of raising a child.

These are the numbers for raising a child in the Urban South

  • A low-income family spends $175,290 on average
  • A middle-income family spends $232,050 on average
  • A high-income family spends $366,360 on average

14. The average amount spent on raising a child in the Urban Midwest is $227,400.

(Source: United States Department of Agriculture)

In the Midwest, the total cost of raising a kid is below the national average. To raise a child in the Urban Midwest:

  • A low-income family spends $169,920 on average
  • A middle-income family spends $227,400 on average
  • A high-income family spends $363,000 on average

15.  The average amount spent on raising a child in rural areas is $193,020.

(Source: United States Department of Agriculture)

According to the report, the total cost of raising children is lowest in the rural areas of the United

States.  

The estimates are that to raise a child in rural areas: 

  • A low-income family spends $146,310 on average
  • A middle-income family spends $193,020 on average
  • A high-income family spends $280,080 on average

The total costs in the Midwest and the rural areas of the USA are lower because housing, childcare, and education costs are lower in these areas.  

Most Expensive and the Cheapest States to Raise a Child 

Now that we have established the differences in expenses by regions, it’s time to get a bit more specific.

16. Daycare for an infant costs $13,404 on average in Hawaii.

(Source: Go Banking Rates)

Sounds steep? Don’t worry, once your child turns 4, you will only need to pay $8,724 for daycare.

And this is not the only thing that costs a lot in Hawaii. You will need to shell out a fortune on housing, healthcare, and groceries. 

The only thing that can be considered affordable in Hawaii (which is debatable) is childbirth. Vaginal birth costs $5,743 on average. A C-section costs $8,265 on average.

Still, Hawaii is considered one of the most expensive places to raise a child in America.

17. The average cost of vaginal birth in Alaska is $10,413.

(Source: Go Banking Rates)

If you are planning to have a kid in Alaska, well… You are going to have to start saving even to give birth.  

A C-section in Alaska will cost you $14,528 on average. Alaska is considered one of the most expensive states in terms of healthcare.

Everything else is expensive too – such as housing, groceries, and clothing.

The average cost of groceries for a family of 3 is $5,997! That is the 6th highest average in the US. Those who plan on bigger families need to bear in mind that the average grocery bill for, say, a family of 5 would be even higher. 

18. The average cost of daycare for an infant is $20,415 in Massachusetts.

(Source: Go Banking Rates)

Daycare costs don’t seem so bad in Hawaii now, right?

The average cost of groceries in Massachusetts is $6,172. Almost the same as the average healthcare costs – $6,679.  

19. The average daycare cost for a 4-year-old in Arkansas is $5,348.

(Source: Go Banking Rates)

The Midwest region has proven to be the most child-friendly area. Daycare for an infant costs $6,726 on average in Arkansas. The cost is lower for a 4-year-old, averaging at $5,348.

This makes Arkansas one of the least expensive places to raise a child.

The average costs of vaginal and C-section birth are also relatively low in comparison to other states, $5,600 and $8,037, respectively.

20. Daycare for an infant costs $5,307 on average in Mississippi.

(Source: Go Banking Rates)

Mississippi is among the 10 states with the lowest vaginal delivery cost on average – $5,605. Healthcare for a family of three would cost $5,054 on average. Clothing and groceries are also deemed to be affordable. 

Daycare for an infant costs $5,307, whereas daycare for a 4-year-old costs $4,670. Mississippi has some of the lowest costs of daycare in the USA.

Cost of Raising a Child by Country

And how do other countries worldwide compare in terms of costs?

21. The full cost to raise a child to age 18 in the UK is $200,000 for a couple.

(Source: Child Poverty Action Group)

In the UK, the full cost a couple would need to spend to raise their child from birth to age 18 is estimated to be £155,142. That is more than 200,000 USD.

A single parent, on the other hand, would need £187,120 (242,000 USD).

If rent, childcare, or council tax aren’t included, then the amount needed is £75,436 for a couple and £102,627 for a single parent (approximately 97,000 USD and 132,000 USD, respectively).

22. Child-rearing expenses in Switzerland amount to $1,230-1,850 per month. 

(Source: Swiss Info)

This settles the question of “How much does it cost to raise a child monthly in Switzerland?”.

A considerable part of that is housing, and it is the highest expense in Switzerland for families.

Well, depending on how old the child is, the cost goes anywhere from CHF1,200-1,800 per month (approximately 1,230-1,850 USD).

23. Raising a child to age 18 in Germany costs approximately $140,000.

(Source: What Life Could Be)

It has been estimated that raising a child in Germany costs around 130,000 EUR. However, after university expenses get included, the amount rises to 230,000 EUR (250,000 USD). 

24. The average cost to raise a child to age 17 in Australia is $195,000.

(Source: Budget Direct)

Raising a child would cost a middle-class Australian family an estimated amount of 297,600 AUD (or 195,000 USD). 

As was the case in the USA, some areas in Australia are pricier than others. Overall costs in Sydney and Melbourne are higher than the costs in the regional areas of Australia. 

25. The average annual cost of raising a child in Canada is approximately $10,000. 

(Source: Money Sense)

So, now you have the answer to “How much does a child cost per year in Canada?”.

North of the border, things look a bit more affordable for parents. 

The amount has been estimated to be 13,365 CAD (or around 10,000 USD). By the time the child is 18, parents will have spent a projected amount of 253,946 CAD (or around 190,000 USD). 

Millennial Parents and the Cost of Raising Children

How do millennial parents feel about these growing costs and stagnating incomes?

26. 59% of millennial parents underestimate the costs of raising children.

(Source: Bank of America) 

According to the 2020 Better Money Habits Millennial Report, more than half of millennials have underestimated the costs of raising kids. 

And 48% have stated that these expenses are making them feel restricted in what they can do financially. 

27. Finances were an important consideration when starting a family for 58% of millennials. 

(Source: Bank of America) 

Before most millennials decide to start a family, they ask one question.

How much does it cost to raise a child?

In contrast, only 49% of Gen X and 46% of Baby Boomers considered their finances before starting a family. 

28. 36% of millennial parents are stressed about saving for their child’s education.

(Source: Bank of America) 

The primary financial stressor for most millennial parents (44%) is not saving enough. And after having a look at the latest American savings statistics, we aren’t surprised! 

However, other major financial stressors for millennial parents include whether they have saved enough for retirement and their child’s education. 

Yet, when asked what they would do if they suddenly received $10,000, 44% of them answered that they would pay off their debt. Only 8% would save it for their child’s education. Well, there is no interest if you lack savings.

29. 38% of millennial moms became stay at home parents due to high childcare costs.

(Source: Bank of America) 

Due to the high average cost of child care, 38% of millennial moms and 20% of millennial dads became stay at home parents.

They all stated that they wanted to continue working, but it was more affordable to stay at home.

30. 47% of millennial moms couldn’t afford to become a stay at home parent. 

(Source: Bank of America) 

There are a lot of parents who prefer to take care of their children full time. However, they can’t afford to without the income they are bringing.

This was the case for 47% of millennial moms and 33% of millennial dads.

31. The average age of first time mothers is 26. 

(Source: NY Times)

First time parents nowadays are older than they were in the 1970s. The average age to have a baby is 26 for first-time mothers and 31 for first-time fathers. 

In 1972, the average age was 21 for first-time mothers and 27 for first-time fathers.

The main reason why people wait longer to have kids today is because most of them are waiting to get a college degree and get settled in their careers. 

The average age to have kids for mothers with a college degree or higher education is 30. Women without a college degree are having their first baby at 23. 

The age of first-time mothers also varies by location. The average age for a woman in New York and San Francisco to give birth is 31 and 32 respectively. First-time mothers in Todd County, S.D, have an average age of 20. 

Budgeting for a New Baby

If all of these stats scared you off from having kids for a while… well, it might be for the better.

But don’t worry – part of the expenses included in the estimates are for nonessential items. You probably noticed that parents with higher incomes reported spending more on their kids than those with lower incomes. Really, it depends on the status of the family.

Before having a baby, there are some things you can do to get a rough estimate of what your costs will be. And then, you can start saving!

So, here is one way to budget:

Housing
If there is room for a new member of your family, then awesome! All you need to figure out is how much your utilities and grocery costs will go up. 

But, if you need to move, try to save away the difference in rent or mortgage. That way you

can figure out if paying that much for housing is feasible. 

Medical Costs

You can’t plan your delivery date, but you can estimate your delivery costs. Check which prenatal medical checkups are covered by your insurance and how much will the delivery cost you out of pocket.  

Maternity Clothes and Food

You can buy some extra-wide, stretchy and baggy clothes. But after a while, you may need to add some items in your wardrobe. You can borrow them, thrift for them, shop for them – whatever is in your budget.

And, you also need to determine whether you will be making any changes to your diet. Pregnant women require more nutrients and an additional 300 calories per day. Fortunately, some of the healthiest foods are cheap and can be bought in bulk (like veggies). 

Baby Gear and Food

Diapers,car seats, clothes… all these add up. While college and university education are usually considered the highest expenses for parents, the new costs start right away. 

Figure out how much baby gear costs in your area and make a list of everything you need.

The good thing is, that most of this stuff can be reused for the second child. Speaking of which, don’t be afraid to use hand-me-downs! Babies grow out of things so fast, and these clothes are usually left as good as new. 

If making a budget plan isn’t your forte, no worries! We’ve got you covered.  

How Much Does it Cost to Raise a Child – A Calculator

The calculator below is based on the estimates of the US Department of Agriculture. Just click on the link and input your information to get a personalized estimate. 

 Calculator

Key Takeaways 

If all these stats made you more stressed out, then let’s repeat: the average doesn’t

represent the necessary or needed amount. 

Those amounts represent what the average middle-income family spent raising their child. 

Is every expense involved necessary? Some of the costs can probably be attributed to expensive toys and clothes that haven’t been worn much. Others are due to some families living in areas with a higher living cost. 

Another thing to note is that the amount estimated decreases after each child. So, the first one is considered the most expensive, the second one – not as much and the third is the least expensive. 

So, how much does it cost to raise a child?

Seeing how each case is individual, the best way to find out is by using a calculator which factors in your income and area of living. 

The national average can only be used as a guideline. 

Sources:

  1. United States Department of Agriculture
  2. United States Department of Agriculture
  3. United States Department of Agriculture
  4. United States Department of Agriculture
  5. United States Department of Agriculture
  6. United States Department of Agriculture
  7. United States Department of Agriculture
  8. United States Department of Agriculture
  9. United States Department of Agriculture
  10. United States Department of Agriculture
  11. United States Department of Agriculture
  12. United States Department of Agriculture
  13. United States Department of Agriculture
  14. United States Department of Agriculture
  15. United States Department of Agriculture
  16. Go Banking Rates
  17. Go Banking Rates
  18. Go Banking Rates
  19. Go Banking Rates
  20. Go Banking Rates
  21. Child Poverty Action Group
  22. Swiss Info
  23. What Life Could Be
  24. Budget Direct
  25. Money Sense
  26. Bank of America
  27. Bank of America
  28. Bank of America
  29. Bank of America
  30. Bank of America
  31. NY Times 
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