How Much Money Does it Take to Raise a Child Until 18?

It's no secret that kids cost money, but did you ever wonder just how much? According to a 2011 report by the United States Department of Agriculture, the annual cost of raising a child totaled between $12,290 and $14,320 1. The USDA figures assumed a married couple with two children in a middle-income household. The budgetary components in the USDA report included expenses such as housing, food, clothing, transportation, child care, health care and education. Parents with a single child spent more per child and parents with three children spent less per child.

Assumptions About Costs

The USDA made certain assumptions in its calculations that don't necessarily fit all families. One assumption was that when a family had children, each child had a separate bedroom. Another assumption was that clothing, furniture and similar household or personal items were purchased new rather than second-hand. The USDA determined health care costs by using data from the U.S. Department of Health and Human Services’ 2005 Medical Expenditure Panel Survey rather than obtaining actual data from the families surveyed for the 2011 report 1. College expenses were not included in the report since it did not include children over age 17 and the report did not include prenatal or childbirth costs.

Housing Costs

Housing, food, child care, education and transportation made up the majority of the costs, with housing the largest overall at 30 percent of the total cost, according to the USDA. However, the median monthly cost of owning a home varied from $827 in the South to $1,389 in the West in 2009, according to the U.S. Census Bureau. For renters, monthly housing costs varied from $691 in the Midwest to $956 in the West. Clearly, the location in which the parents live and the choice to rent or own a home can have a significant impact on housing costs.

Other Costs

Other costs might vary dramatically for a given family depending on their circumstances. A relative who provides child care or a stay-at-home parent can make a considerable difference in child care costs. A family in a rural area who can raise some of their own food and who have a large garden are less likely to have the food costs of a family who must rely on the grocery store. Many children outgrow clothing before it is worn out and second-hand stores provide an opportunity for significant clothing savings. A younger child can also wear clothing an older sibling has outgrown.

The Final Cost

The USDA’s final cost estimate to raise a child from birth through age 17 -- until the child’s 18th birthday -- was $234,900 in 2011. Families who had higher incomes tended to spend more, and the urban northeast was the most costly area to raise children. Since costs rise with inflation, a family would spend more on a child born in 2011 than a child born before 2011. The USDA estimates it would cost $212,370 to $490,830 to raise a child born in 2011, assuming an annual inflation rate of 2.55 percent.