HOW MUCH DOES IT COST TO RAISE A CHILD ?
Updated: 3 days ago
TL:DR
Thinking about having kids? Or maybe you already have one (or a few) and want to know where all your money is disappearing to each month. Let’s be honest. Kids are priceless, but they sure aren’t cheap. If you have ever wondered how much it really costs to raise a child each month, you are not alone. Parenting comes with a lot of unexpected expenses, and while love may be free, diapers, daycare, and dance lessons definitely are not.
Let’s take a deep dive into how much does it cost to raise a child each month, how those expenses add up over time, and how you can financially prepare so your kid (and your wallet) are set up for success.
The Cost of Raising a Child Over the Years
The cost of raising a child has increased significantly over the years. In 1960, the U.S. Department of Agriculture estimated that raising a child to the age of 18 cost around $25,000. Fast forward to today, and that number has skyrocketed.
A 2017 report from the USDA estimated that raising a child from birth to age 18 costs around $233,610. That breaks down to approximately $12,978 per year or about $1,081 per month. Of course, this number varies based on location, lifestyle, and the number of kids in the household. In high-cost-of-living areas, the number is much higher.
What’s The Average Cost Of Raising A Child?
Let’s talk about where that $1,500 a month actually goes. While every family’s situation is different, here is a rough breakdown of the biggest expenses:
Housing: About $300 - $500 per month goes toward the extra space a child needs.
Food: Expect to spend around $200 - $300 per month on groceries for a child, especially as they grow into those teenage years when they eat everything in sight.
Childcare & Education: Daycare costs can be shocking, with parents paying anywhere from $800 - $1,200 per month for full-time care. If your child goes to private school, tuition can range from $300 - $3,500 per month depending on the school.
Healthcare: Between insurance premiums, doctor visits, and occasional ER trips, parents spend around $200 - $400 per month on medical expenses.
Extracurriculars: Sports, dance, music lessons, and after-school programs can add $100 - $500 per month to your budget.
Clothing & Miscellaneous: Kids outgrow clothes at lightning speed, so expect to spend around $100 - $200 per month on clothing, shoes, and random needs.
This does not even include big milestone costs like birthday parties, vacations, or unexpected expenses that pop up.
The 18-Year Total: A Staggering Number
If we use an average of $1,200 per month, the total cost of raising a child from birth to age 18 comes to $259,200. That does not include inflation or major milestone expenses like college, a wedding, or a first car.
Now imagine you have two or three kids. It is no wonder parents often feel the financial pressure of raising a family.
What Is The Cost of Giving Birth?
Before the monthly costs even begin, parents are faced with the cost of childbirth. In the U.S., the average cost of giving birth varies widely depending on location and insurance coverage.
Vaginal delivery with insurance: $2,000 - $5,000 out-of-pocket
C-section with insurance: $3,000 - $7,500 out-of-pocket
Vaginal delivery without insurance: $10,000 - $15,000
C-section without insurance: $15,000 - $25,000
These costs include hospital stays, doctor fees, and prenatal care. Many parents are caught off guard by unexpected medical bills, making it essential to budget for these expenses early on.
The Cost of Private Schooling Before College
For parents considering private education before college, tuition can be a major expense.
Private elementary school: $7,000 - $15,000 per year
Private middle school: $10,000 - $20,000 per year
Private high school: $15,000 - $35,000 per year
Over the course of a child’s education, private schooling can easily exceed $150,000. This does not include additional costs for uniforms, books, extracurricular activities, and transportation.
What Are The Costs Parents Sometimes Forget About?
Beyond the basic monthly expenses, there are several costs parents might not immediately think about when planning for their child’s future. These are the things that can really add up over time:
College tuition and expenses – Even with scholarships and financial aid, college is a major financial undertaking. A four-year degree at a public university can cost anywhere from $40,000 to $100,000 or more. Get ahead of this expense by reading some of our tips.
A first car – Whether you buy it outright or help with insurance and maintenance, a teenager’s first car is another big-ticket item.
A wedding – The average wedding in the U.S. costs around $30,000. Even if parents only contribute a portion, it is still a major expense.
A first home down payment – Many parents want to help their kids with a down payment on their first home. Even a small percentage of a home’s cost can mean tens of thousands of dollars.
Emergency expenses – Unexpected medical bills, therapy, or other support services can come up at any stage of a child’s life.
How Parents Can Start Saving For Their Kids Early
The best way to prepare for these expenses is to start saving early, ideally before your child is even born. Here are a few financial tools that can help:
High-yield savings account – A great place to start saving for short-term expenses like medical costs, child-related purchases, or even a future car.
529 college savings plan – This tax-advantaged investment account helps parents save for their child’s college tuition. The earlier you start, the more you can benefit from compound growth.
Custodial investment accounts (UTMA/UGMA accounts) – These accounts allow parents to invest in stocks, bonds, or mutual funds for their child’s future, which they can access as adults.
Roth IRA for kids – If your child earns money from a part-time job, you can contribute to a Roth IRA on their behalf, helping them build wealth from an early age.
The Importance of Financial Literacy for Parents and Kids
One of the best things parents can do for their children—aside from providing financial support—is to teach them financial literacy.
Kids who understand money from an early age are better equipped to make smart financial decisions as adults.
Teaching your child about financial literacy can set them up for success and help them avoid common money mistakes.
Budgeting: Show them how to track their income and expenses from an early age.
Investing: Teach them about compound interest and how investing early can help their money grow.
Avoiding debt: Talk to them about student loans, credit cards, and how to use debt wisely.
By teaching these habits early, you give your child the financial confidence they need to thrive as an adult.
Raising a child is expensive, but with proper planning and smart financial choices, parents can reduce the stress of these costs. By starting to save early, being mindful of hidden expenses, and passing down financial knowledge, parents can ensure their kids have a solid financial foundation.
While the numbers may seem overwhelming, remember that financial preparation is a marathon, not a sprint. A little planning today can make a big difference in the future—for both parents and kids.
Teach your kids and teens finance, investing, and entrepreneurship: Enroll your students
FINANCIAL EDUCATION & INVESTING FOR KIDS AND TEENS
Comments