The Cost of Raising a Child Has Risen to a Quarter of a Million Dollars

According to figures from 2015, It will cost nearly $14,000 per year to raise a child from birth to the age of 17

The Cost of Raising a Child Has Risen to a Quarter of a Million Dollars
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February 28, 2017

Hoping to have a baby? You may be less hopeful when you find out that it will cost almost a quarter of a million dollars to raise a child.

According to the Department of Agriculture's (USDA) estimates, it will cost parents $233,610—nearly as much as $14,000 per year---to bring up a child from birth through the age of 17. This amount is the average cost estimated for a couple earning a middle-level income with two children. The cost will be slightly higher in urban areas and slightly lower in rural locations.

Parents may be even more discouraged when they find out that, because these figures are based on numbers collected in 2015, the actual cost of raising a baby born this year is likely to be even greater. The USDA's estimate is an increase of three percent from that in 2014, a rate higher than that of inflation.

The agency has been putting together this annual report since 1960 in order to help parents making budgets. The information is also used by state governments and courts to write guidelines for child support and foster care. The main costs involved in raising children include housing, food, transportation, health care, education, clothing, and other miscellaneous expenses.

Here are some things that parents should know about the costs of raising a child:

Housing Costs Are High

The cost of housing accounts for up to one third—between 26 and 33 percent—of the total amount that it takes to raise children. To figure out this amount, the USDA calculates the average cost of one additional bedroom—a method that the agency believes is likely conservative because it does not take into account the families who pay more to live in places with better schools or other advantages for kids.

The Differences Between Urban and Rural

It costs more to raise children in some places than it does in others. In general, families composed of married couples making middle levels of income and living in the urban Northeast spent the most at $253,770. They were followed by those living in the urban West at $235,140 and the urban South at $221,730. Those living in areas in the urban Midwest spent less at $217,020, while those living in rural locations spent even less at $193,020.

The USDA estimates that the annual cost of housing per child is $3,900 in urban locations and $2,400 in rural ones.

Income levels also played a role. Families living on lower incomes are expected to spend roughly $174,690 per child from birth through age 17, while those with higher incomes will spend $373,210.

Before taxes, the average family living on a middle-level income earns between $59,200 and $107,400.

Child Care Is More Expensive

Child care, education, and food account for the highest costs after housing for families raising children. For example, the cost of food makes up roughly 18 percent of the cost of raising a child for a middle-income couple with two children. The costs of child care and education account for 16 percent.

Education costs have gone up drastically since 1960, when the agency estimates that those expenses accounted for about two percent of expenses related to raising children. The new report explains that this increase is probably due to the higher number of women who have joined the workforce, which has fueled the need for additional child care.

The USDA's estimates do not include, however, the yearly cost of college. The government estimates this cost to be $45,370 for a private college and $20,090 for a public one.

Older Children Are More Expensive Than Younger Ones

If you think that diapers and other necessary items for infants are a strain on your finances, you will not be happy to hear this. When a child is between the ages of zero and two, he or she costs roughly $12,680. However, a teenager between 15 and 17 costs about $13,900 per year.

According to the USDA, the costs of food, transportation, clothing, and health care all grow along with children. The highest costs for the oldest children are those related to transportation, possibly because they start driving, while those for children ages six and under are child care and education.

The More Kids You Have, the Lower the Costs Will Be

It may same counterintuitive at first that bigger families have lower costs related to raising their children. Families that have three or more kids spend, on average, 24 percent less on each child, a fact that the USDA says is the result of children in larger families often sharing bedrooms and having hand-me-down clothes and toys while the parents can buy food in bigger, more economical packages. In addition, private schools and child care providers sometimes offer sibling discounts.

Households with only one child, on the other hand, spend an average of 27 percent more on that child.