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Be Prepared to Spend $245,000 to Raise a Child

The U.S. Department of Agriculture released its annual Cost of Raising a Child report this week. It shows that a middle-income family raising a baby born in 2013 can expect to spend about $245,340 for food, housing, childcare, education and other child-rearing expenses up to age 18. Costs associated with pregnancy or after age 18, such as college, aren't included.

The report is issued annually and is based on data from the federal government's Consumer Expenditure Survey, which is the most comprehensive source of information available on household expenditures, and it's developed by the USDA Center for Nutrition Policy and Promotion (CNPP).

The report notes that family income and location in the United States affect child-rearing costs. Costs are lower in the urban south ($230,610) and rural ($193,590) regions and higher in the urban northeast ($282,480). The differences in income are:

  • A family earning less than $61,530 per year can expect to spend a total of $176,550 (in 2013 dollars) on a child from birth up to age 18.
  • Parents with an income between $61,530 and $106,540 can expect to spend $245,340.
  • A family earning more than $106,540 can expect to spend $407,820.

For middle-income families, percentages of the total costs to raise a child rank:

  1. Housing at 30 percent
  2. Childcare and education at 18 percent
  3. Food at 16 percent

"Parents have the challenge of providing food that is not only healthful and delicious, but also affordable," says Angela Tagtow, CNPP executive director. "We have great resources, such as ChooseMyPlate.gov, that feature tips to help families serve nutritious and affordable meals. I encourage parents to check out our Healthy Eating On a Budget resources, 10-Tips Nutrition Series, recipes, and MyPlate Kids' Place, which features digital games for kids to get engaged in healthy eating."

In 1960, the first year the report was issued, a middle-income family was expected to spend $25,230 ($198,560 in 2013 dollars) to raise a child. Housing was the largest child-rearing expense both then and now. Health care expenses for a child have doubled as a percentage of total child-rearing costs during that time. Some common 2013 costs, such as childcare, were negligible in 1960.

The report shows expenses per child decrease as a family has more children. Families with three or more children spend 22 percent less per child than families with two children. As families have more children, the children can share bedrooms; clothing and toys can be handed down to younger children; food can be purchased in larger and more economical quantities; and private schools or childcare centers may offer sibling discounts.

The full report and a calculator, where families can enter the number and ages of their children to obtain an estimate of costs, are available on the USDA website.

To help budget for child-rearing costs, avoid these Financial Planning Missteps and try these 5 Money Tips for Setting Up Your Family Finances.

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