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. 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 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 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 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 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 to complete.
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!