How Much Does It Cost to Raise a Child?

Key Takeaways

• The average cost of raising a child for middle-income families is nearly $375,000, from birth through age 18.
• Newborn and childcare expenses include delivery, baby gear, nursery set-up, daycare, preschool, and essentials like cribs, car seats, and diapers.
• As children grow, expenses for groceries, housing, education, clothing, and healthcare become recurring costs.
• Additional costs such as extracurriculars, tutoring, insurance, summer camps, and personal spending also contribute to the overall cost of raising a child.
• Effective financial management, budgeting tips, and government assistance can help parents manage costs.

Understanding the costs of raising a child may help you create a roadmap for managing your finances, identifying where you can save, and setting long-term financial goals. According to SmartAsset, the total cost of raising a child born in 2023 can reach nearly $375,000, including essentials like food, clothing, and education.²

Developing good money management habits early on is crucial to preparing for the long-term costs of raising children. If you want to feel more confident and prepared for the expenses of raising a child, below are some ideas on what to expect, along with some budgeting and resource tips.

Initial Expenses of Welcoming a Newborn

Whether preparing for your first child or planning for a second, welcoming a newborn involves a variety of expenses. Here are some early estimated costs to consider, keeping in mind premium items or services could cost more: 

Delivery Costs

Without insurance, a vaginal birth averages over $14,000 and a C-section is approximately $26,000 at a hospital. According to a recent Forbes article, a vaginal birth will likely cost about $2,700, and a C-section around $3,200 dependent upon the type of insurance coverage and the specifics of your health insurance plan.²

Some alternative options for delivery include home births or birthing centers might offer different, more affordable costs of childbirth but could have higher risks. 

Baby Gear & Nursery Setup

For a nursery, expect to budget between $275 and $1,700 for essentials such as a crib and mattress, car seat, stroller, and changing table, according to Costhelper.³

Other baby gear essentials, such as a baby monitor, highchair, and baby-proofing supplies could add another $200 to $500 to your expenses on average, also noted by Costhelper.³

Post-Birth Expenses

When budgeting for a baby, Costhelper notes to expect to spend an average of $130 to $300 on immediate expenses such as diapers, wipes, baby clothes, and formula. Breastfeeding supplies could add $20 to $350.³

Daycare & Preschool Costs

According to a recent article by TrustedCare, full-time daycare could cost between $400 and $1,500 per month. High-quality centers may be more expensive.⁴

Costs for preschool programs range from $400 to $1,300 per month, depending on whether it’s a private institution or part of a public school system, as noted by TrustedCare.⁴

Ongoing Expenses for Basic Needs

While the early costs of raising a newborn are significant, financial responsibilities evolve as your child grows. Here’s a breakdown of the essential costs that are typically required throughout their childhood:

Food & Nutrition

Expect to spend approximately $150 to $300 monthly on groceries and food costs for a school-aged child according to the USDA.⁵ Costs may vary based on eating habits, age, and dietary needs. Keep in mind that these expenses could fluctuate due to inflation rates.

Additional food costs for school lunches and snacks, noted by the School Nutrition Association, could add another $55 to $65 per month.⁶

Clothing & Personal Items

A recent article from The Ascent recommends budgeting approximately $140 monthly for clothing costs, including seasonal changes and special occasions.⁷ 

The Bureau of Labor Statistics states items like toiletries, skincare products, and other personal care items cost, on average $72 a month but may vary depending on spending habits.⁸

Primary & Secondary Education

While public schooling has no tuition fees there could be alternative education expenses, such as supplies, uniforms, and field trips. These additional expenses could be up to $600 on average according to USA Today.⁹

Private school tuition typically ranges from $5,000 to $30,000 annually, according to a recent article by the Education Data Initiative, with variations based on location, type of school, and fees.¹⁰ Higher-income families often choose private schools for benefits like smaller class sizes and specialized programs.

Housing Costs

Moving to a larger household typically means higher rent, property taxes, or mortgage payments, which vary by location and household size. Additionally, many hospitals require proof of housing before releasing you from the hospital after delivery. 

Some additional costs that could increase with a larger home would be utility bills and maintenance.

With a larger household, your utility bills may increase as your energy costs for heating, cooling, and lighting rise. Additionally, more space generally requires extra upkeep, leading to potentially higher maintenance costs.

Healthcare & Medical Expenses

When planning for a child's healthcare, it's important to consider various medical expenses and remember that many hospitals require a designated child's physician before discharge. 

These costs include routine check-ups, which, depending on your insurance coverage, Doctor visits may cost between $20 and $50 per checkup according to a recent article by The Pricer.¹¹

Additionally, according to Dental Plans, depending on your insurance coverage, regular dental and potential orthodontic care may add $65 to $100 per checkup, while vision exams and glasses or contacts could add $10 to $20 per exam per a recent Forbes article.^12,13

Additional Expenses to Consider

Raising a child involves more than basic needs and education. Various miscellaneous expenses on children could add up. Here are some items to consider:

Extracurricular Activities & Tutoring

Lending Tree notes in a recent article that extracurriculars such as sports, music, art classes, and school-related costs may add to about $700 annually or $60 per month, though costs vary by activity.¹⁴

Tutoring services range from $30 to $80 per hour according to TrustedCare.¹⁵

Transportation Needs

As your family grows, your transportation expenses and needs may change, potentially requiring a larger vehicle like an SUV or minivan.

MoneyGeek states that a new larger vehicle could cost between $30,000 and $50,000 in a recent article, with monthly payments depending on the loan term, interest rates, down payment, and more.¹⁶

Additional costs for transportation may include insurance, maintenance and gas expenses are typically higher for larger vehicles.

Health Insurance

Health insurance can be a major expense when raising children, covering routine check-ups, vaccinations, and necessary medical care. Balancing premiums, deductibles, and out-of-pocket expenses is crucial. The specific plan you choose will significantly impact your financial commitment.

Life Insurance

Life Insurance is another substantial expense for families with children, with costs depending on factors such as coverage amount, policy type, and your family's financial needs. It helpd provides financial security by covering living expenses, debts, and future education costs in the event of an unexpected loss. 

Entertainment & Personal Spending

Entertainment costs could include movie costs, video games, amusement parks, and other fun activities. Expect to spend around $20 to $150 per month on average, referenced by the Bureau of Labor Statistics.⁸

Whether it’s sports, music lessons, or art classes, the Bureau of Labor Statistics notes that hobby costs range between $30 and $100 monthly, depending on the activity and frequency.⁸

Another option for introducing kids to the concept of personal spending is giving them an allowance. A common approach is to give $1 per week for each year of age. This method helps children learn financial responsibility and how to manage their money.

Items of Importance You Should Consider for Raising a Child

Planning for your child's future involves more than just managing day-to-day expenses. When your children move out, consider helping them prepare for adulthood. Here are some long-term financial health you may want to consider:

College Planning

A 529 College Savings Plan is a tax-advantaged account allows you to save for education expenses and college costs. Contributions grow tax-deferred, and withdrawals for qualified expenses are tax-free. Regular contributions could help build the fund to cover college tuition costs over time. 

Financial education for college students is also important. It can help students manage college expenses and prepare for future financial responsibilities, including understanding the impact and management of student loans and the cost of tuition.

Health Insurance & Life Insurance

Incorporating health insurance into your financial health is essential for managing the costs of raising a child. Health insurance may help cover routine medical care and unforeseen health issues. Regularly reviewing and adjusting your health insurance policy ensures it continues to meet your family's needs and financial goals, safeguarding your child's health.

Life Insurance is an important aspect of a long-term financial strategy for families. It provides a safety net by securing funds for living expenses, debts, and future education in the event of an untimely death. Regularly updating your policy can adapt to your family's changing circumstances and goals.

Emergency Funds & Unexpected Expenses

Consider saving three to six months’ living expenses in an accessible account as an emergency fund, to cover unexpected medical emergencies, job loss, or urgent repairs.

Budget monthly for unexpected expenses such as car repairs, major appliance replacements, or sudden travel needs to cushion these blows without derailing your financial health.

Tips for Managing Child-Rearing Costs

Raising a child can be expensive, but planning and budgeting can help you manage these costs effectively. Here are some strategies to help you improve your financial health:

• Create a Detailed Budget: List all income sources and expenses, including housing, food, childcare, education, and entertainment, and distinguish between non-essential and essential expenses. Use budgeting apps to track spending, set savings goals, and monitor your budget with features like expense categorization and alerts.
• Buy Secondhand: Items like clothes, toys, and baby gear may be expensive when bought new. Look for secondhand options through consignment shops, online marketplaces, and community sales.
• Take Advantage of Sales and Discounts: Use coupons, wait for sales, and buy in bulk for items you use frequently, like diapers and baby formula.
• Tax Credits: The Child Tax Credit and the Child and Dependent Care Credit could significantly reduce your tax burden. These credits could provide financial relief for eligible families with children.
• Government Assistance Programs: Various government programs offer food assistance to needy families and provide healthcare coverage for children from low-income families. These programs help families access essential resources and medical care.

Conclusion

Raising a child is a rewarding journey but comes with significant financial responsibilities. Understanding costs at different stages is crucial. Parents often make financial mistakes that could lead to stress and economic instability. By implementing practical tips and strategies, you could manage your finances effectively and navigate the economic journey of parenthood. Schedule a consultation with our financial representatives for personalized advice on budgeting and planning for your child's future.

Frequently Asked Questions

What is the average cost of living for a family of 4?

The average cost of living for a family of four varies widely based on location but according to a recent article from NerdWallet, the cost is approximately $101,514 per year.¹⁷ This amount covers housing, food, transportation, healthcare, and other essential expenses. In urban areas and regions with higher living costs, this figure can be even higher.

Why is it so expensive to raise a child?

Raising a child is expensive due to the cumulative costs of necessities like food, clothing, and education. Additionally, housing, transportation, extracurricular activities and childcare costs add to the financial burden, along with hidden costs such as childcare and unexpected healthcare expenses. Regional variations also affect overall costs, and together, these expenses can significantly strain a family's budget.

Sources

1. Raising a Child Can Cost More Than $30K Per Year in the U.S. – 2023 Study. https://smartasset.com/data-studies/cost-raise-child-2023
2. How Much Does It Cost to Have a Baby? 2024 Averages. https://www.forbes.com/advisor/health-insurance/average-childbirth-cost/
3. Find Out What Price Other People Are Paying. https://children.costhelper.com/ 
4. How Much Does Child Care Cost? https://trustedcare.com/costs/child-care-cost
5. Official USDA Food Plans: Cost of Food at Home at Three Levels, U.S. Average, April 2024. https://fns-prod.azureedge.us/sites/default/files/resource-files/Cost_Of_Food_Low_Moderate_Liberal_Food_Plans_April_2024.pdf
6. School Meal Statistics https://schoolnutrition.org/about-school-meals/school-meal-statistics/#prices
7. American Households' Average Monthly Expenses. https://www.fool.com/money/research/average-monthly-expenses/
8. Consumer Expenditures--2022. https://www.bls.gov/news.release/pdf/cesan.pdf
9. Back to School 2023: Could This Be the Most Expensive School Year Ever? Maybe. https://www.usatoday.com/story/money/shopping/2023/07/29/back-to-school-essentials-spending-higher-than-ever/70444329007/
10. Average Cost of Private School. https://educationdata.org/average-cost-of-private-school#:~:text=%2412%2C594%20is%20the%20average%20annual,for%20private%20elementary%20school%20students.
11. How Much Does a Well Baby Doctor Visit Cost?  https://www.thepricer.org/well-baby-doctor-visit-cost/#:~:text=Here%E2%80%99s%20what%20to%20expect%3A%201%20Uninsured%20%E2%80%93%20%24300,deductible%20%E2%80%93%20%2420%20to%20%2450%20copay%20per%20visit
12. The Cost of Dental Care & How to Save. https://www.dentalplans.com/blog/oral-health-cost-and-lifetime-value/
13. How Much Is an Eye Exam? https://www.forbes.com/advisor/health-insurance/how-much-is-an-eye-exam/
14. Parents With Young Children Spend an Average of $731 Annually on Kids’ Extracurriculars, and the Majority Believe It’ll Lead to Income or Career. https://www.lendingtree.com/credit-cards/study/kids-extracurriculars/
15. How Much Does a Tutor Cost? https://trustedcare.com/costs/tutor-cost#:~:text=Tutoring%20costs%20%2420%20to%20%24100%2B%20per%20hour%20on,tutor%20rates%20average%20%2430%20to%20%2480%20per%20hour.
16. How Much Does a New Car Cost? https://www.moneygeek.com/insurance/auto/average-price-of-a-new-car/
17. Average Monthly Expenses: From a Single Person to a Family of 5. Average Monthly Expenses: From a Single Person to a Family of 5 - NerdWallet