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How Much Does It Cost to Raise a Child?

Personal Finance
Mother reading with her daughter at home and thinking about how much does it cost to raise a kid

People often say that nothing can prepare you for becoming a parent. That is true in a lot of ways, but there's one area of parenthood you can prepare for — the cost.

What's the Average Cost to Raise a Child?

So, how much does it cost to raise a kid? The average cost of raising a child born to a middle-income, married couple is approximately $267,000 (in 2021 dollars) over a period of 18 years  — or more than $14,800 a year per child for a typical two-child household according to a U.S. News & World Report.

As a new parent, you can expect to pay for everything from labor and delivery to childcare expenses, housing, utilities and more. As parents, we also make countless choices about what's best for our children, and these decisions can also affect your family budget.

When it comes to the cost of raising a child, here's a breakdown of what you can potentially expect.

What's the Average Cost of Labor & Delivery?

If you plan on growing your family, it's important to be financially prepared before you even give birth. Families are charged $13,024 on average for a vaginal delivery and $22,646 on average for a C-section, according to ValuePenguin. If you don't have insurance to help cover these services, the out-of-pocket costs can be really high.

But if you do have health insurance, it's still important to read the fine print of your health insurance policy to understand the percentage your insurance will cover and how much will be your financial responsibility. Once you have a better idea of these costs, you can likely make more informed decisions about things like your birth plan and where to seek care.

How Much Does Childcare Cost?

The cost of childcare can vary depending on whether you decide to employ a nanny, go to an in-home daycare or go to a daycare center. Costs also vary depending on where you live. For example, you might pay $12,555 a year, or nearly $1,050 a month, for infant childcare in Mississippi, but if you live in D.C., you might pay $21,497 a year, or nearly $1,790 a month, according to the Center for American Progress, which examined child care costs during the COVID-19 pandemic.

Consider doing some research on childcare options in your area once you and your partner decide you want to have kids, so you know what kind of childcare you can afford and how to budget for it. You may really want a full-time nanny, but if the costs will force you to drastically cut back on other expenses, it may make sense to explore other options.

What's the Average Cost of Healthcare?

Health care costs have also steadily increased in the last 10 years, according to the Milliman Medical Index. Milliman reported that the average yearly health care cost for a family of four was $28,256 in 2020.

If you have an employer-sponsored health plan, you might be able to choose between different tiers of insurance. It may be hard to determine your family's future health care needs right now, but kids get sick all the time and have several important doctor's appointments during their first two years. Consider evaluating your health plan options to see which tier of coverage provides the services you need for as affordable a price as possible.

What's the Cost of Transportation, Housing-Related Expenses & Food?

A middle-income family with two kids can expect to spend an average of $162 a month per child on transportation (gas, insurance, vehicle maintenance, etc.) and an average of $314 a month per child on housing-related expenses, as reported by the PlutusTM Foundation. A USDA report on food costs found that it costs anywhere from $99 to $183 a month on average to feed a one-year-old child, depending on a family's food budget.

But these numbers are national averages. If you live in an area with a high cost of living, it might cost even more. You may want to sit down with your partner to look at your household expenses now and — using these averages — what they could be in the future. That will help give you a better idea of what you'll pay each month to run your household and how to structure your family's budget.

How Much Does a Child's Education Cost?

Like daycare, early childhood education can be expensive. Licensed center-based infant child care has a national monthly average cost of $1,324, according to the Center for American Progress. Then, if you decide to send your child to a private school, you can expect to pay anywhere from a national average (for 2021-22) of $11,779 per year up to over $26,000, depending on your home state, county or town.

Even if you choose to send your child to public school, which is free, there are other costs to consider, like clothing, lunch and school supplies. A survey by the KPMG found that the average parent's spending per student for the 2021 back-to-school season was expected to be much as $270, compared to approximately $250 in 2020..

These costs aside, whether you choose public or private school, you may want to think of your child's education as an investment that can set them up for future success.

Preparing for the Cost of Parenthood

Affording all of the basic necessities may seem daunting, but you can help ease these concerns by putting a financial plan in place to set your family up for long-term success.

While this plan doesn't have to be super formal, understanding your current expenses, income, and future savings goals and priorities can help. This might involve some conversations with your partner about home versus hospital birth, public versus private school, and more. These talks may challenge you, but being able to make these choices together could help you prepare for the path ahead.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.