How Much Does it Cost to Raise a Child?

Disclaimer: We are not qualified legal or tax professionals and are not giving advice. Always speak with a qualified professional before making any legal or financial decisions.

Raising a child is one of life's most rewarding experiences, yet it comes with a significant financial commitment. As we navigate through 2024, understanding the costs associated with child-rearing is crucial for prospective and current parents alike.

From the joy of welcoming a newborn to the pride of watching your child graduate, every stage of parenting brings its own set of financial considerations.

In this guide, we'll explore the essential costs to anticipate and offer budgeting tips to ensure you're prepared for this exciting journey.

Prefer to talk to a debt specialist immediately? Click here for a free consultation.

Where Does the Money Go?

The USDA breaks down the cost per child in percentages. These are averages so they depend on each family’s lifestyle and location.

Housing - 29%

Food - 18%

Child care and education - 16%

Transportation - 15%

Healthcare - 9%

Miscellaneous - 7%

Clothing - 6%

Housing - 29%

While one person can live in a cheap studio or apartment, two is problematic and adding a baby to the mix can get very uncomfortable. The top five reasons that people buy a house include a place to raise children and provide them a good education, a safe physical structure, and more space for a family.

Separate bedrooms become more important as children grow up and become teenagers, especially with opposite gender children. Sure you can make do, but most people really don’t want to, hence the high expense in housing cost.

Food - 18%

Not only is food getting more expensive, but non-parents cannot believe how much a pre-teen or teenager can eat. Add in the extra calorie requirements for having a child enrolled in sports and food budgets get quickly out of hand!

If you are eligible, take advantage of free and reduced meals through your child’s school. Master the art of competitive grocery shopping and save money with leftovers, coupons, and sale shopping.

Child Care and Education - 16%

Preschool child care is expensive. The average nationwide cost for infants in daycare is $991 a month ($11,896/year), toddlers average $847 per month ($10,158 per year), and $771/month ($9,254/year) for preschoolers. Many families have found that it is not cost effective for both parents to work and have children in daycare.

Not everyone has a family willing or able to step in to provide low cost babysitting, and nannies and babysitters are getting more expensive as well. The national average for in-home babysitting is $17.73 per hour or roughly $2800 per month for a 40-hour week.

Public education is free, but not without expenses. There are daily supplies to buy, book fairs, fundraisers, clothing, snacks, and supplies for special projects.

Transportation - 15%

Most school districts offer bussing, but not all do and if you choose to send your child to an out or area school, you will need to provide transportation. In addition, there will be the days that your child misses the bus, gets sick at school, or has after school activities.

You’ll find there is a reason minivans and SUVs are very popular with parents. Try wrestling an unhappy toddler into a car seat in the backseat of a two-door vehicle! As your child ages, you may be providing transportation to sporting events or after school activities that involve either a lot of friends or a lot of equipment.

Health Care - 9%

Kids get sick, break bones, and need stitches, on top of their regular checkups and vaccinations. If your child is in daycare, prepare yourself for a continual round of strep throat, ear infections, pink eye, and the sniffles. It all costs money in either doctor’s bills or being out sick.

Miscellaneous - 7%

This category includes toys and equipment especially for babies. Fewer carefully selected toys are far better than an overload of toys that never get touched. If you are shopping for a baby buying second hand, gently used strollers, bouncy chairs, changing tables, and diaper bags is a great way to get good equipment for less. And your baby will not know, nor care. You, or your child, may not think so now, but a less expensive toy from grandma and a deposit into an education bank account will have double the impact -  a new thing which may or may not be played with and less stress heading off to college or trade school later in life.

Here’s another secret. Your child does not have to be enrolled in every after school activity ever invented. These are expensive and time consuming. Allow your child some downtime to be a kid. Choosing one after school activity a year or a semester will let your child experience and enjoy one thing at a time. If they don’t like it, there is a time limit to complete the activity before they try something new.

Clothing - 6%

Clothing is expensive. The best action you can take is to not have a huge wardrobe of new clothing for your kids. Babies and toddlers grow so quickly that buying secondhand, gently used clothing is far smarter than buying anything brand new. Winter clothing is another item that is far  better off being bought used. Most of it won’t be worn enough to be able to tell the difference between brand new and secondhand. Once they are in school a wise selection of new and gently used can stretch your child’s wardrobe. Shoes and underwear are generally best purchased new!

What Do Children Really Need?

Despite what TV and advertising tell you, it is not just more stuff. Focus on providing your children and the following and the rest should fall in place.

Food and shelter - not experiencing food or shelter insecurity will make a huge difference for your child. It is very hard to concentrate and learn when you are hungry in class or not sure where you are going to sleep that night. Clothing is important, especially in colder climates but again the amount or the name brand is not important as cleanliness and a decent fit.

Emotional support - can’t buy this one. You need to provide a safe place, safe actions and safe words to help your child grow into a functioning adult.

Stability and consistency - you can buy the basics, but the reality comes from knowing you will have a decent meal, a safe place to sleep, and a parent or guardian who protects them.

Love -  not giving your children everything they want, but instead providing them with stability. This goes along with structure. You love them so you provide them with reasonable rules and expectations.

And finally education. Making sure their main job is school and that they are learning is a huge part of your main job. But children can’t properly learn if the world around them is unstable and unstructured.

FAQs