If you’re thinking of starting a family soon, you might want to make sure your finances are on point. Why? Well, according to CNN Money, raising a child in the United States can cost you nearly a quarter of million dollars! Yes, there’s a lot to plan when it comes to your future, whether it’s saving for retirement or buying a home, but there should also be planning when it comes to financing and children. It may sound crazy to a non-parent, but the average cost of raising a child estimates to roughly $233,610!
According to a 2017 report from the U.S. Department of Agriculture, the average cost of raising a child from birth through the age of 17 is more than $233,000. Don’t worry, it made my heart skip a beat too, just take a deep breath before you continue to read, because here comes the bang. As if that wasn’t high enough, this number isn’t incorporating the inflation costs, which will more likely be a total of $284,570. Now, that estimate was based on studies conducted in 2015, so, I’m pretty sure we can expect the cost to be higher since the number of babies born since then is way, way more.
So, how can these little human costs so much? Well, the average does include food, housing, food, transportation, healthcare, childcare, education, clothing, entertainment, and so on and so forth. Of course, housing makes up the biggest expense, accounting for one-third of the total cost. Food and childcare take up the next biggest part of a budget. The USDA estimate that childcare cost an average is $37,378 per child, regardless if one of the partners is a stay at home parent or not. Parents spend anywhere between 9 to 22 percent of their total income on childcare. But, there is actually good news behind this! If you’re planning on having two children, each additional child poses less of a financial burn than the last. This due to shared bedrooms, hand-me-downs, free babysitting, and economical qualities of food.
Now, we are not trying to scare you in any way, but these numbers do account for children 0 to 17. Meaning, these numbers don’t include the cost of 18 and over, ultimately including a child’s college education. As we all pretty much know, education is one of the biggest expense parents will face. College Board reported a public four-year institution in the US to cost each in-state student an average of $20,770 for tuition and room and board. That number jumps up to $36,420 for out-of-state students. For students at a private nonprofit four-year college, that number goes even higher, paying an average of $46,950. Yikes!
Of course, the USDA average does not reflect what everyone pays. It’s only an estimate for middle-income married couples with two children. In reality, families throughout the U.S. include a range of household incomes. Lower income families can expect to spend around $174,690 per child, while the average higher income family can spend around $372,210. Single parents typically spend less than married ones.
Obviously, the choice of whether to have a child is not just a financial decision. Yet, it is crucial to keep your financial situation in mind and realized what the cost of raising a child is. Create a budget, stick to it, plan it, and create a happy family!