Having children can be rewarding, but thanks to higher rates of inflation, it’s also getting more expensive. Today, parents can expect to spend around $310,000 to raise a child from birth up to age 17, according to a recent Brookings Institution analysis of data from the USDA.
If you’re considering growing your family, understanding all the costs involved can help you prepare financially. Let’s take a closer look at the average annual cost of raising a child in the U.S. and how that figure has changed over the past two decades.
What Is the Cost of Raising a Child in the US in 2022?
Adjusting for higher future inflation, the Brookings Institution estimates it costs $310,605 for a middle-class family to raise a child born in 2015 up to age 17. Of course, the amount you end up spending depends on a number of factors, including household income, the cost of childcare, and where you live.
If you want more personalized insights to help you plan your spending, consider using an online calculator.
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A Comparison of the Cost of Raising in Child in 2000 vs 2022
The average cost of raising a child in 2000 looked much different than it does now, thanks in large part to the recent surge in inflation rates.
In 2000, a typical middle-income family could expect to spend $165,630 to raise a child to the age of 17. In 2022, that same family would spend $310,605, according to the Brookings Institution analysis, which adjusted the USDA’s most recent estimates for higher expected future inflation. Note that this amount doesn’t include extras like summer camp or birthday parties, nor does it factor in the cost of college.
Top Expenses of Raising a Child in 2022
When it comes to the average cost of raising a child from birth to 17, middle-income families can expect to spend around $17,255 per year. The following table shows where that typically money goes.
| Cost category | Average percent (%) of spending |
|---|---|
| Housing | 29% |
| Food | 18% |
| Child care and Education | 16% |
| Transportation | 15% |
| Healthcare | 9% |
| Miscellaneous | 7% |
| Clothing | 6% |
Source: USDA’s Expenditures on Children by Families, 2015
Top Expenses of Raising a Child in 2000
Average middle-income parents in 2000 spent around $9,201 per year on child-rearing costs. As the chart below shows, housing and food were the biggest expenses. But compared to 2022, parents spent less on other things, like healthcare and child care and education.
| Cost category | Average percent (%) of spending |
|---|---|
| Housing | 33% |
| Food | 18% |
| Transportation | 15% |
| Miscellaneous | 11% |
| Child care and Education | 10% |
| Healthcare | 7% |
| Clothing | 6% |
Source: USDA Expenditures on Children by Families, 2000
How to Reduce the Cost of Raising a Child Today
No matter when you become a parent, you’ll likely have some major expenses. The good news is, it is possible to save money while raising kids. Here are some tips to consider:
• Look for ways to lower housing expenses. Housing is the number-one expense for families, so finding ways to trim expenses there can really help you save. For instance, if you’re planning to move, you may want to expand your search to include smaller, less expensive homes located in neighborhoods with lower property taxes.
• Purchase secondhand clothes. Kids tend to outgrow their clothing quickly. Rather than spend a lot on new outfits, shop secondhand whenever possible. Tag sales, thrift stores, and consignment sites are all good places to explore.
• Make the most of your local library. Are expensive streaming subscriptions eating away at the family budget? Consider canceling some of those streamers and heading on over the local library. Not only can you check out books and audiobooks for free, you can also rent DVDs and enjoy free events.
• Shop generic. When it comes to basics like diapers, toiletries, and household cleaners, skip the fancy brand names and go for less-expensive generic versions.
Recommended: From One Child to Two: How to Financially Plan
More Financial Tips for Parents
Whether you’re looking to start a family or add to your brood, there are also some smart financial habits you can start today that can make it easier to afford raising children. As a bonus, these habits can also help you teach your child about money management.
• Pay down debt quickly. When a borrower takes on debt, they repay not only the amount they borrowed, they also owe interest and fees to the lender in exchange for borrowing the money. That’s why it’s so important to pay off debt quickly. The sooner you erase your debt, the less interest you’ll have to pay.
• Create a budget that grows with your family. Coming up with a budget — and adapting it to meet your current needs — can help your finances roll with whatever changes life has in store. It’s a good idea to sit down once a month to evaluate what’s working in the budget, what can be improved, and what new expenses are on the horizon. A spending app can also help you keep tabs on where your money is going.
• Prioritize savings. When you’re raising a family, it’s easy to let long-term savings goals fall by the wayside. One way to make saving second nature is to sock away a portion of each paycheck into a savings account or investment account. By paying yourself first, you’re better positioned to reach your financial goals, whether that’s putting multiple children through college, investing, or saving for retirement.
Recommended: Creating an Investment Plan for Your Child
The Takeaway
Having a family can be rewarding — and expensive. The average middle-class family today will pay around $310,000 to raise a child to age 18. Housing, food, and child care/education are among the top three biggest expenses. The good news is, there are ways to manage expenses and still save for long-term financial goals.
If you need help organizing your finances, consider using a money tracker app. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.
FAQ
How much does it cost each year to have a child?
The average middle-class family will spend around $17,255 per year to raise a child.
How much does it cost to raise a child to 18 in 2023?
According to a 2022 Brookings Institution analysis of data from the USDA, a middle-class family will spend $310,605 to raise a child to the age of 18.
How much does a baby cost on average?
The average middle-income household family can expect to spend around $12,680 a year to raise a child from birth to 2 years of age, according to the most recent USDA data.
Photo credit: iStock/Prostock-Studio
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