Quarter Million Dollar Baby? Cost of Raising a Child Hits $245K

How much will it cost to raise a child born in 2013?  According to the US Department of Agriculture (USDA) in its annual report, Expenditures on Children by Families, also know as the Cost of Raising a Child, a middle income family can spend up to $245,340 ($304,480 adjusted for projected inflation).

The data are gathered by the Consumer Expenditure Survey.  This amount includes money for food, housing, childcare, education, and other child-raising costs up to the age of 18.  This number does not include pregnancy costs or expenditures after the age of 18, like higher education, according to a news release on the USDA website.

The costs vary according to the region of the country.

• The urban South – $230,610

• The rural regions of the country- $193,590

• The urban Northeast – $282,480

“In today’s economy, it’s important to be prepared with as much information as possible when planning for the future,” said USDA Food, Nutrition and Consumer Services Under Secretary Kevin Concannon. “In addition to giving families with children an indication of expenses they might want to be prepared for, the report is a critical resource for state governments in determining child support guidelines and foster care payments.”

The amount spent on rearing a child varies according to the the family income, with food being one of the top three expenses. The USDA can provide literature, such as ChooseMyPlate.gov,  that acts as a resource for families wanting to have affordable, yet nutritious meals.

“Variations by geographic region are marked when we look at housing, for example,” said study author and CNPP economist Mark Lino, Ph.D. “The average cost of housing for a child up to age 18 is $87,840 for a middle-income family in the urban West, compared to $66,240 in the urban South, and $70,200 in the urban Midwest. It’s interesting to note that other studies are showing that families are increasingly moving to these areas of the country with lower housing cost.”

If a family increases the number of children in the home, the cost per child decreases.  If a family has three or more children, it spends 22% less on each child than families with two children.

Matt Becker, a Florida financial planner, says it is a good idea to begin setting aside money before the baby arrives, to get an idea of the costs the new arrival will add to the family budget, according to Christopher Doering of The Des Moines Register.  Becker says that this is an idea they should continue in order to build up savings for unexpected emergencies.

“It’s pretty normal to be worried as to whether you can afford a child. I was worried about it. It’s scary,” said Becker, a father of two sons, who founded financial planning firm Mom and Dad Money in 2013. “Take the time to plan, take the time to figure out what it might cost, get the right things in place but if it’s close . . . don’t let the numbers scare you off if having a baby is something that is important to you. If you make the effort to prepare, it’s going to have a way of working out.”

Wednesday
08 20, 2014
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