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A few people have asked how much money they should plan to put aside in order to raise a child given their specific financial situations, but I can't find any information here on average childrearing costs in the US.

Calculating your own expected child expenses is the most precise way to plan financially for raising a child. That said, I think it'd be helpful to have an average figure in mind so I know, very broadly, what to expect?

How much does the average American family spend on childrearing? How is that money typically spent? How much should I expect to spend on raising my child?

Cloudy
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Brian
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1 Answers1

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How much does the average American household spend on raising a child?

The USDA has been tracking the cost of raising a child in the US since 1960 and their most recent report from 2015 contains the most comprehensive data that I've found on the topic.

Their blog post summarizes the full report well. In it, they find that:

A family will spend approximately $12,980 annually per child in a middle-income ($59,200-$107,400), two-child, married-couple family. Middle-income, married-couple parents of a child born in 2015 may expect to spend $233,610 ($284,570 if projected inflation costs are factored in*) for food, shelter, and other necessities to raise a child through age 17.

This report does not include the cost of a college education, prenatal care, fertility care, child birth, adoption expenses, gifts, life insurance, or any costs made on children after they turn 18.

The cost of raising a child varies dramatically depending on where you live, how much you earn, how many children you have, how old your children are, how many parents are in the household, and many other factors. The report (linked above) covers all of the aforementioned variables in greater detail.

How does the average American household allocate their childrearing expenditures?

  • 29% - Housing (mortage/rent, utilities, house furnishings, etc.)
  • 18% - Food (groceries, school meals, dining at restaurants, etc.)
  • 16% - Child Care & Education account (school/day care tuition, school supplies, babysitting, etc.)
  • 15% - Transporation (monthly vehicle payments, down payments, gas, maintenance, insurance, public transporation, etc.)
  • 9% - Healthcare (out-of-pocket costs for health insurance premiums, drugs/supplies not covered by insurance, medical/dental/menatal health services not covered by insurance, etc.)
  • 7% - Miscellaneous (haircuts, toothbrushes, entertainment, nonschool books, etc.)
  • 6% - Clothing (shirts, shoes, pants, diapers, etc.)

How much should I expect to spend on raising my child?

Raising a child is very personal and the costs can reflect the experience you want your children to have. As such, I would advise against using these figures as some kind of golden number that you will spend or that you should spend on raising a child. Only you can decide how much to spend on raising your child.

That said, the report does offer an example of how much a married couple might spend on the younger of two children, relative to their before-tax household income.

  • If they earn less than $59,200, they might expect to spend $174,690 in 2015 USD ($212,300 adjusted for inflation)
  • If they earn between $59,200 and $107,400, they might expect to spend $233,610 in 2015 USD ($284,570 adjusted for inflation)
  • If they earn over $107,400, they might expect to spend $372,210 in 2015 USD ($454,770 adjusted for inflation)

Caveat: The example assumes that the younger child is born in 2015 and reaches age 17 in the year 2032, and the average annual inflation rate over this time is 2.2 percent (the average annual inflation rate from 1995-2015).

Hopefully this provides a general estimate for how much people in your income group are spending so that you can calculate your own expected costs.

Brian
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