Even though you can’t put a price on the wonderful feeling when you become a parent, every parent would want to know how much does it cost to raise a child before getting into a lifetime commitment.
From birth to college, it’s a never-ending cycle of payment after payment and spending after spending.
Just a tiny newborn baby needs so many things – new bed, stroller, clothing, an endless supply of diapers and I’m not even talking about the needs of a toddler.
Companies are constantly pressuring moms and convincing them that they need the newest gadget in order for their child to thrive, and moms simply don’t want to stay behind their friends who were boasting with their new branded stroller or custom designed nursery for their little one.
Sure, you can keep it simple and cover the baby’s basic needs, but you will also reach a point where some expenses are unavoidable.
Try doing the math of how much it would cost to raise your little one from birth to college. College graduation is practically when you can say you’ve done your part as a parent and you don’t have to worry about spending any more money on your child (and yet you still will!).
If you’re curious, I put together some of the basic statistics to see what a child COULD cost from birth to college.
Disclaimer: the data below is based on costs for children born in 2009 until they reach college in 2026.
How much does it cost to raise a child?
How much does it cost to raise a child: Part 1
Costs by Category
In Maslow’s Hierarchy of Needs, the basic needs and the psychological needs are the foundations of a human’s needs. The basic needs pertain to food, water, safety and security which easily translates to food and shelter.
On the other hand, the psychological needs pertain to relationships and belonging to a community which translates to friendship and family.
The costs of such needs are distributed as equally as possible.
From 1960 – 2009, shelter costs have stayed the same comprising of almost a third of the cost to raise a child. Food was the second highest in 1960 but, because of the trending diets and what not, it has decreased by 8% since.
Today, education is the second highest cost, rising from 2% to 15%. Back in the 60’s, education was not a priority. A college degree was not of utmost importance. In contrast to today, getting into an ivy league college is every parent’s desire for their kids.
Everything else pretty much decreased in cost except health care. More and more kids are born with genetic diseases, diagnosed with mental disorders or fighting obesity. In result to our easy fast food choices, cancer has become common even among children.
How much does it cost to raise a child: Part 2
Costs by Income
It is only logical to be a more lenient with you spending if your household has a higher income. Consequently, miscellaneous spending would gradually increase as your kids get older.
Why is that?
Because, the more money you have coming in, the more you can afford to buy other things outside of necessities. If you look around, more kids now have the latest iPhone or Mac. Also, the older they get, they get the urge to feed their social need which is also part of Maslow’s psychological needs.
Check out Instagram. The most common things you would see are who went on the best summer vacation, has the latest gadgets, has the best clothes or has traveled the most.
These social needs cost money – money that parents earn and choose to give their children out of love and out of financial capabilities.
As shown on this chart, the higher your income bracket, the higher your cost to raise a child is. Logically speaking, why would you withhold a material thing from your child if you can afford it, right?
Being materially secure feeds the human need to feel loved and belonged.
In return, the lower your income, the more you stick to providing your kids their basic necessities such as shelter, food, clothing, and education.
How much does it cost to raise a child: Part 3
Costs by Region
Similar to the costs by income, the region you live in can also make a big difference. Each region in the United States has a different pay scale thus, resulting to different annual household incomes.
According to the graph above, the urban southern states have the least cost to raise a child from birth to college. Seeing as they have the lowest income bracket, it is only expected that even the price of the commodities would adjust to meet their rates. Otherwise, there would be no retail business.
In contrast, the northeastern states have the highest income bracket in all of the United States. Just thinking of the lavish lifestyle in New York and the Hamptons is enough explanation of old rich money that has brought about such numbers.
Also, the world’s most famous financial and fashion districts are situated in the big apple. This means more international traffic equals higher priced commodities equals higher basic pays.
Also, the mid-western and the western states are considered middle class in the income bracket but are not too far behind with their capability to earn and spend accordingly.
How much does it cost to raise a child: Conclusion
Wall Street Journal has released an article predicting how much it would cost to raise a child born in 2013 until he is 18 years old. Several other finance analysis has also shown a steady increase of about and average of $8000.00 yearly based on the inflation of costs from 2010 to 2012.
According to Wall Street Journal, it would cost $176,550 for low-income families, $245,340 for middle-income families with two parents and up to five children and $407,820 for high-income families. CNN Money also supports this estimate as their studies have also hit the same mark based on statistics of previous years’ spending habit.
How much does it cost to raise a child: UPDATE
As of this year’s consensus. There seems to be a change from the USDA’s statistics from 2009. Every year it is said to increase by 4.3% but this year’s increase is below the annual average increase.
Consequently, USDA has released a new spending chart for when a child was born in 2015 until he turns 18 excluding college fees. Back in 2009, the average expenditure for a middle-income family with two parents is $245,340. The new chart shows an average of $233,610.
Housing and shelter still pretty much makes up 1/3 of the entire cost. Daycare and education costs have gone up for the wealthier families.These are followed by food cost for both middle and higher class income households.
“There are significant economies of scale, with regards to children, sometimes referred to as the ‘cheaper by the dozen effect,'” said Mark Lino, author of the report and economist at the Department of Agriculture, in a press release. “As families increase in size, children may share a bedroom, clothing and toys can be reused, and food can be purchased in larger, more economical packages.”
Transportation costs also rise by the time a child is 16 due to the age appropriate to get a driver’s license. Multiple children surprisingly lowered the costs by 24% compared to married working couples who only has one child.
“As families increase in size, children may share a bedroom, clothing and toys can be reused and food can be purchased in larger, more economical packages.” – Mark Lino
By region, affluent families in the Northeastern areas face a hefty average of $397,110, followed by the urban West at $235,140. Families living in the rural areas are projected to spend between $146,000 to $193,000 over the years.
In other words, it is expensive to raise a child from birth to adulthood.
In hindsight, has this ever stopped us humans from reproducing? No.
Why? Because we know the love and joy kids bring to our lives. Yes, they are loud, messy and high maintenance but the pride that you feel when you see them achieving their dreams is worth so much more than a quarter of a million bucks.
As parents, we acknowledge the fact that our children are a show of our investment. Where they get in life is as much of a trophy to us as it is to them.
So if you are new parents or expecting parents, don’t let the numbers intimidate you. All this worry will be replaced with excitement, love and joy the moment you hear your baby’s first cry.
Did any of these numbers surprise you? What do you think about the increasing costs of having kids? What was your experience when you were raised by your parents, do you feel like it’s getting more expensive to have kids nowadays? Leave comment below!