It costs $241,080 to raise child

It costs $241,080 to raise child

Annual child-rearing expenses estimates at $12,600-14,700.

IT'S hard to put a price tag on raising a child, but the U.S. Department of Agriculture pegged it at $241,080 ($301,970 adjusted for projected inflation) to rear a child born in 2012 all the way through high school.

That estimate — for a middle-income family with an income between $60,640 and $105,000 — includes food, shelter and other necessities associated with child-rearing expenses over the next 17 years.

A family earning less than $60,640 per year can expect to spend a total of $173,490 (in 2012 dollars) on a child from birth through high school. A family earning more than $105,000 can expect to spend $399,780.

The number represents a 2.6% increase from 2011 — although it's lower than the average annual increase of 4.4% since 1960.

Expenses for child care, education, health care and clothing saw the largest year-over-year percentage increases related to child rearing. However, there were smaller increases in housing, food, transportation and miscellaneous expenses during the same period.

As a proportion of total child-rearing expenses, housing accounted for the largest share across income groups, comprising 30-33% of total expenses per child in a two-child, two-parent family.

For families in the middle-income group, child care/education (if applicable) and food were the next largest average expenditures, accounting for 18% and 16% of child-rearing expenses, respectively.

Mark Lino, author of the USDA report, explained that for a child in a middle-income family, the expenses range between $12,600 and $14,700 per year, depending on the age of the child. These expenses tend to increase as the child gets older, he said, with teenagers being the most expensive.

"They have high food costs because they have greater nutritional needs as well as higher transportation costs since these are the years, the teen years, when a teenager starts to drive, so you add them to your auto insurance or maybe even buy them a second car," he explained.

The food budget shares ranged from 17% to 25% for a child in a two-child, two-parent family and 25-34% for a child in a two-child, single-parent family. Food budget shares generally increased with the age of the child and did not vary much by household income level, the report notes.

 

Cost differences

It costs $241,080 to raise child

USDA undersecretary Kevin Concannon noted that there are great variations in the cost of raising a child in the U.S. between urban and rural areas and among sections of the country: the Northeast, the Far West, the South and the Upper Midwest (Figure).

Concannon said a major reason behind the cost variations is the difference in housing costs in rural areas and the South.

"Families in rural areas also saw lower child care and education expenses," Lino added.

Lino said the report identifies what he calls the "cheaper by the dozen effect." Compared with expenditures per child in a two-child, two-parent family, expenses by families with one child averaged 25% more, whereas if they had three or more children, they spent 22% less per child, he explained.

As families have more children, the children can share bedrooms, clothing and toys can be handed down to younger children, food can be purchased in larger and more economical quantities and private schools or child care centers may offer sibling discounts.

Robert Post, acting executive director of the USDA Center for Nutrition Policy & Promotion, which published the report, noted that although food is not the highest expense, it can be managed to be lower than current spending. He added that by following USDA's low-cost food plan available on its website, a family of four could save money and consume a healthier diet for about $180 a week.

Volume:85 Issue:33

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