America’s birth rates are at their lowest point in over 30 years, for many reasons; no doubt, the cost of raising a child is one of them. While the birth rate has fallen, the cost of raising a child has subsequently risen; in fact, the cost of raising a child has ballooned over 40% over the 2000-2010 period alone. This cost increase has occurred for a variety of reasons, from the rising cost of medical treatments and health care to the skyrocketing cost of housing, especially in urban areas where the majority of Americans now live.
So, just how much does it cost to raise a child these days? According to most figures, having a baby and raising that child to young adulthood will knock you back well over a quarter of a million dollars. That cost presumes a normal birth and childhood and excludes the costs a family may face when it comes to higher education. So, while having a baby may be one of the biggest and most exciting moments in a couple’s life, the cost of raising a child is increasingly a factor when people are thinking about having kids. Let’s look at the real costs of raising a child here in the 21st century.
Labor and Delivery
If you and your spouse are expecting a baby soon, then congratulations are in order! While this is an extremely exciting time for any family, it can also be quite expensive. For example, during the course of a normal pregnancy, you can expect your family’s health care costs to average around $2,000. That cost will include routine prenatal health checkups as well as things such as vitamins. While awaiting the new baby’s arrival, you can also expect to spend an additional $500 to $1,000 for the purchase of items such as cribs, furniture, clothes and blankets, and other items. Finally, when your newborn arrives, a typical vaginal birth costs approximately $10,000, while a Caesarean delivery costs nearly $16,000. You could bear a solid portion of this unless you have a great insurance plan.
Once your newborn is home from the hospital and settled in, the real cost accounting can begin. For most families, the single largest increase in spending they’ll face with children is housing. In fact, housing accounts for approximately 30% of the total cost of adding a child to your family. Beyond housing, additional expenses that most families with children must account for include childcare, education, and food. Finally, adding new members to your family may also increase how much you’re paying for health insurance and other medical costs; the deductible on your health insurance plan may increase significantly once you have kids as well.
The costs of raising a child don’t end in young adulthood for most parents, either. On average, over 60% of high school graduates pursue college or some sort of follow-up education, such as a trade school. The costs of attending college are high and frequently fall on the parents. In 2018, families paid nearly $27,000 annually for each child attending college. Many families have to resort to student loans and other debts to cover these costs and end up racking up interest expenses and long-term monthly payments because of the high costs of a college education. So, when you’re considering the costs of raising your child, make sure you factor college tuition into the equation.
All Things Aren’t Equal Everywhere
While the costs of raising a child in the United States have increased significantly over the past few decades, they can vary significantly depending upon where you live. The cost of rearing a child is lower in the urban South and much higher in the urban Northeast. Even in a single state, the costs of raising a child can be considerably different from one town to the next. For example, it’s common for housing costs to be higher in school districts that outperform other nearby areas. Cities and towns with excellent schools and good, family-friendly infrastructure tend to have higher taxes as well. So, as you plan to expand your family, ensure you consider these varying costs.
Planning Helps Everything
None of these costs should frighten you when you’re considering having a child, or if you have one arriving soon. However, thinking clearly about costs can aid you as you prepare to expand your family, and it can help you increase the opportunities your child has available throughout his or her life. Some excellent online tools can aid you in planning for the financial realities of having a new child. For example, the United States Department of Agriculture has an excellent online financial calculator to help you estimate all the costs you’ll have to deal with over the course of your child’s life. Additionally, talking to a trusted financial expert can help you adjust your household budget to deal with the costs of a new child’s arrival and assist you with preparing for the future.
Adding a child to your family can be expensive, but it’ll likely be the biggest and best decision you’ll ever make. So, take the numerous costs into consideration, and start making a budget to plan for your new child’s arrival today!