By Jamie Johnson, WCI Contributor
Everyone knows that kids are expensive, but have you ever wondered exactly how much it costs to raise a child? According to a recent analysis from the Brookings Institute, it now costs an average of $310,000 to raise a child from birth to age 17. This number is a big jump from the US Department of Agriculture’s original estimate of $284,594. The Brookings Institute adjusted the USDA’s estimate to account for inflation and the costs associated with sending a child to college.
If you’re a parent or planning to have kids in the future, you want a realistic picture of what you can expect to pay. Understanding the average costs of raising a child can help you come up with a financial plan. Because, yes, it's been proven that having children really is expensive.
How Much Does It Cost to Have a Baby?
Many factors influence how much it costs to have a baby, including where you live, whether you have health insurance, and the type of birth you have. Insurance can lower these costs slightly, but the average family will still have out-of-pocket expenses.
The Peterson-Kaiser Family Foundation Health System Tracker estimates an average cost of $18,865 for pregnancy, childbirth, and post-partum care. Families with insurance will pay an average of $2,854 in out-of-pocket expenses.
Women who have a vaginal delivery incur an average cost of $14,768, with $2,655 paid out-of-pocket. However, many births aren’t standard (the C-section rate in the US is 32%), and pregnancies resulting in a cesarean section cost an average of $26,280, with $3,214 paid out-of-pocket.
In Vitro Fertilization Cost
According to the CDC, one in five women between the ages of 15-49 cannot get pregnant after a year of trying. Out of this group, one in four women has trouble either getting pregnant or carrying a pregnancy to term. Some women who struggle with infertility choose to pursue in vitro fertilization (IVF). Fertility treatments aren’t usually covered by insurance, so families are often left to cover these expenses.
A single IVF cycle can range from $15,000-$30,000, which is a daunting figure for most families (and for physician families). These costs typically include a base fee for the appointments, lab work, egg retrieval, and follow-up care. You miss a lot of productive work time too and that doesn't include the emotional cost of repeated cycles.
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How Much Does It Cost to Raise a Child?
Raising children is expensive, and the USDA found that these expenses tend to increase as kids get older. From birth to age 2, parents spend about $300 less per year, while parents with teenagers from the ages of 15-17 spend roughly $900 more per year. Let’s look at some of the biggest areas in which parents are spending this money.
Housing
Housing costs are, by far, the largest expense associated with having children—the USDA found that families usually spend 29% of their budget on housing. The exact costs will vary depending on where you live and the kind of housing you choose. Of course, even if you don't have children, housing costs are still going to be a large part of your budget.
Food
Food is another significant expense for families, and the costs only get bigger as children grow up. The exact costs depend on how many children you have, your preferred diet, and where you live. The USDA estimates that food is the second-largest expense for families, accounting for 18% of their budget.
Education
Education accounts for 16% of the average family’s budget. Education costs start early, with many parents paying for preschool. Once children are school-age, parents who opt to send their children to public school will get a break on tuition. However, they’ll still have to pay for school supplies, sports, and other extracurricular activities. Parents who send their children to private schools will pay an average of $12,350 annually (while still having to subsidize public schools with their property taxes).
Childcare Costs
Childcare accounts for a considerable portion of most parents’ budgets, ranging from $5,436-$24,243 a year. At $24,243 per year, Washington, D.C., is the most expensive area for childcare, costing more than the average rent. The exact costs depend on how many children you have, where you live, and the type of childcare solution you choose. It also depends on the ages of your children, with infant care being the most expensive.
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How Much Does It Cost to Adopt a Child?
Families that choose to adopt can spend up to $50,000, depending on the type of adoption they choose. Adopting from foster care is a low-cost option, with the majority of adoptions costing less than $1,000. This type of adoption is less expensive because of state and federal programs in place to make it easier to adopt children in foster care.
If you choose to pursue a private adoption in the US, the costs will vary depending on the agency you work with. The costs usually range between $25,000-$45,000. If you’re adopting a newborn, you can also expect to pay for the birth mother’s medical expenses.
An international adoption usually costs between $20,000-$50,000, although it varies by country. Adopting internationally is not only the most expensive option but also takes the longest to complete. The average international adoption can take up to five years from beginning to end.
The Bottom Line
For many Americans, raising children is a rewarding experience, but it is going to cost you. And many of these costs are out of your control since the US doesn’t prioritize paying for childcare or maternity leave, like other countries.
But by understanding the average costs of raising a child, you can go into the experience prepared. The best way to manage these costs is by living below your means, prioritizing saving and investing, and knowing your priorities from the start.
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Are you surprised at how expensive it is to conceive, deliver, adopt, and raise a child? If you're planning to have children in the future, how will you start financially planning for it now? Comment below!
Great article although childcare is almost always a larger expense than housing
Cost to adopt out of your local foster system falls somewhere in the -10,000 to 10000 range depending on state subsidy/stipend amount. You have to like filling out paperwork almost as much as children, though.
Yes, thank you for bringing up adoption as another way to build a family.
Two additional financial factors should be considered.
First, there is a federal tax credit for adoption.
Second, remember that adopted children often experience scaring emotional trama that flares throughout their lives and can result in significant expenses for counseling, especially during teenage years.
In my opinion, the cost of children is the most overlooked aspect of all personal finance blogs and websites. There are thousands of articles on how much home one can afford, whether or not to buy a Tesla, savings rate, live like a resident, etc (and to be clear those are all very important topics) but the number of children and the age at which you have them, from a purely objective standpoint, is just as important financially. Now most would argue children are worth it but in the end, you can’t get a pass on math.
Great review. I often presented the cost of parenthood when I discussed contraception with young military troops. Unplanned pregnancy and early marriage, a major cause of financial stress in young families, have a direct impact on military readiness.
Fun discussion. Though as a parent of four, many of those numbers seems too high to me.
Well, and as I think through the math…. According to those numbers, an average family (of two kids) spends over $36,000 per year on their kids until the kids turn 17. So, you think a family with a median income (70k/year) is paying more than half their income on their kids? Doesn’t seems right. Or what if they have four kids like me?
Completely agree. Had 4 kids through residency and fellowship. Definitely didn’t cost up 17k a year! However, I am not sure if the opportunity cost is included in the calculation, and I am sure exorbitant daycare costs are included, which we didn’t pay since my wife stays home with them. Also, I’m not a fan of including college education costs in that number for raising a kid from 0-17.
You hit the mail on the head. These “costs of having children” articles tend to use a bit of scaremongering. Children do not need to cost anywhere near that number. Sure, you can choose to spend as much as you want on them, but that is not usually required. I have friends who have 6, 7, 8, even 9 or more kids, and most are of a modest income. I also have 5 myself, including fully grown, and I did not spend anywhere near those numbers, not even 1/3 on the older ones. Of course now that I have a much greater income, I have the “luxury of choosing” to spend much more on them. But truly, if you avoid the most expensive cities, you can get by at a cost of an extra $3,000-5,000 or so per year per child, and the more you have, the less incremental costs (hand me downs, shared rooms, etc).
I agree that these numbers as presented in this (and many other similar studies) don’t jive with the actual experience for most moderate earners because, well, they cannot. That said, I certainly know plenty of white coat investors whose kids cost this much and more between child care, private schools, college educations, expensive vacations, expensive kids activities, more expensive/larger house. I wouldn’t be surprised if we’re spending more on our kids than these amounts for instance.