Each year, the US Department of Agriculture estimates the cost of raising a child from birth to age 17. And of course, the cost goes up almost every year. The latest figures from the USDA put the average cost at a staggering $233,610, or almost $14,000 annually.
That’s the average for a middle-income couple with two children. It’s a bit more expensive in urban parts of the country, and less so in rural areas. Importantly, it does not include any expenses incurred to send the child to college (more on this below).
Costs vary by family income level and location. Lower-income families are estimated to spend an average of $174,690, while high-income households will pay around $372,210 over the years from birth to 17.
By region, families in the urban Northeast face the highest child-rearing tab with an average of $253,770, followed by the urban West at $235,140. Those living in rural areas throughout the country pay the least, at an average of $193,020, according to the government.
The latest estimate released earlier this year is based on 2015 numbers, so a baby born this year will cost even more. Generally, the cost of raising a child in the US increases about 3% annually, considerably higher than the rate of inflation.
Since 1960, the USDA has compiled this annual report to inform – more likely terrify – budget-conscious parents who are considering having children. The main costs include housing, food, transportation, healthcare, education, clothing and other miscellaneous expenses.
Housing was the biggest expense for middle-income families, taking up an average of 29% of the total cost of raising a child, driven mostly by the cost of a larger home. Food is the second biggest budget eater. Another big expense is childcare, which costs parents an average of $37,378 per child, according to the government.
Despite the endless cycle of diapers, children tend to be less expensive in their younger years. While childcare and education expenses are higher for children under six, those expenses usually dissipate as kids get older and enter school full-time.
Put differently, while new parents may flinch at the costs of diapers and baby gear, it’s only going to get worse. While a child costs around $12,680 a year when he or she is between 0 and 2, a teenager between 15 and 17 costs around $13,900 annually, says the USDA.
It says food, transportation, clothing and healthcare expenses all grow as a child ages. Transportation costs are highest for the oldest children, largely because they start driving, while childcare and education costs are highest for six and under.
There is some good news for big families. Families with three or more children spend an average of 24% less per child. The USDA says that’s because children often share bedrooms in bigger families, clothing and toys are handed down, food can be purchased in larger and more economical packages, etc.
Also, private schools and childcare providers may offer sibling discounts. In contrast, one-child households spend an average of 27% more on the single child.
As noted earlier, the average of $233,610 to raise a child from birth to age 17 does not include any expenditures for a college education. If parents plan to pay for their child’s college education, they need to add $15,000-$20,000 a year for public colleges and universities and $35,000-$40,000 yearly for private institutions.
Finally, it is no wonder then that fewer Americans are having children. The government reported earlier this year that only 3.9 million babies were born in the US in 2015, down about 1% from 2014. The number of births per woman has declined dramatically from over 3.5 in the late 1950s to apprx. 1.85 in 2015.
Fertility rates in America – the number of babies born per 1,000 women ages 15 to 44 – were at the lowest levels ever recorded in 2015, according to the US Centers for Disease Control and Prevention.
This does not mean there are more infertile women today; rather it means that fewer babies are being born to women of childbearing age in the US, most often by choice. Researchers disagree on the causes of the decline in birth and fertility rates, and there are many factors involved.
Yet there is no disagreement that the rising cost of raising a child in the US is a major factor.