How Much Does It Cost to Raise a Child?

Whether you’re already a new parent or you’ve been doing preemptive research and preparing to start a new family of your own, you’ve likely wondered how much it actually costs to raise a child in this modern world. 

And there is no doubt that it’s an extremely important question to ask. 

As exciting and rewarding as it can be to raise a child, you should be prepared with the knowledge of what to expect financially when providing for them. Over the last twenty years, there have been dynamic shifts in housing, technology, healthcare, schooling, and transportation that will likely impact your finances.

The more prepared you are now, the more time you can spend focusing on what matters most as your child grows. So, how much does it cost to raise a child? Keep reading to learn more about average costs based on data from across the US gathered by the Economic Policy Institute.

Average cost to raise a child: Housing costs

Arguably, one of the most important aspects of raising a child is housing. On average, Americans with a single child will spend approximately $1,040.47 each month on keeping a roof over their head. On average, people spend $14,652.79 each year on housing costs. 

These numbers assume that one or both parents will occupy one room of a small home or apartment while the child occupies a second room.

Extrapolate that cost times the 18 years minimum to bring a child to adulthood, not accounting for future inflation rates, and you are looking at around $263,776.22 in 2023 dollars.

Average cost to raise a child: Food costs

Second in importance only to housing, monthly food costs should also be considered when raising a child. In the US, the average one-child household will spend $865.46 on food each month, or about $10,385.56 for a full year.

This data assumes the cost of groceries purchased from a store and cooked at home (with minimal indulgence in take-out foods). Without adjusting for inflation, a typical single-child family can expect to spend upwards of $186,940.08 on food alone by the time their child reaches the age of 18.

If you don’t like to cook often, expect this investment to be much higher.

Average cost to raise a child: Childcare costs

For most American working families, childcare is a necessity. Unfortunately, it’s also one of the largest investments you’ll need to make. On average, Americans spend $901.62 on childcare each month, or about $10,819.47 per year. If you have a nanny, this cost may be substantially higher. 

Now, “childcare” isn’t just confined to infant and toddler care. These figures do account for different versions of childcare that remain necessary as a child grows in grade school: after-school care, summer programs, overnight camps, etc.

Average cost to raise a child: Healthcare costs

The average medical costs, including the monthly premium and most common out-of-pocket costs, amount to $1,221.07 each month for a single-child family. That equates to about $14,652.79 per year.

It’s important to note that this number will vary significantly depending on whether a portion of your costs are covered by your employer and if your child has any special medical needs.

Average cost to raise a child: Transportation costs

On average, a household with one child will spend about $1,148.36 each month ($18,469.89 on average per year) on transportation costs. It’s important to note that figures can vary widely depending on parents’ work commute distance, school commute distance, auto ownership versus public transportation use, and other factors. 

The cited numbers don’t include transportation for the purpose of recreation – this is just for the necessary commuting between work, school, childcare, and home.

Average cost to raise a child: Other necessities

These are the items that don’t neatly fall into the broader categories: things like apparel, personal hygiene items, household cleaning supplies, furnishings, school supplies, and more. The average American family with one child can expect to spend about $674.81 each month, or $8,097.72 each year on miscellaneous supplies.

How much does a child cost per month?

Totaling all the averages of associated costs with raising a single child, like housing, food, childcare, healthcare, transportation, and other necessities, an average American child may require around $5,851.80 per month.

How much does each child cost per year?

When we add up the same necessary costs for raising a single child in the US, the annual sum averages out to be $70,221.48.

How much does it cost to raise a child up to the age of 18?

This one can be a bit more difficult to pin down because the costs associated with certain aspects like childcare, food, and transportation will slowly shift independently as the child grows to adolescent age. 

Based on the data, the estimated average cost to raise a single child up to the age of 18 in America is around $1,264,000.64. Yes, you read the commas correctly: that’s more than $1.2 million to raise a single child to adulthood. Keep in mind that these figures do not account for typical inflation over the course of 18 years; costs are expressed in the 2023 dollar value.

It’s also important to note that these figures don’t include money being stashed away for your child’s college fund. Though this obviously pays off once your child hits adulthood, the act of saving could be another substantial cost throughout the first 18 years.

Average cost to raise a child: A breakdown of the data

Our averages were calculated using the Economic Policy Institute’s (EPI’s) Family Budget Factsheet, which pools community-specific costs for 10 different family types (one or two adults, and zero to four children) across every county and metropolitan area in the entire US. 

For the purposes of this article, we chose to isolate the numbers for single-child households (with either one or two adults) to provide average costs to raise a single child. 

You can review EPI’s methodology to gain a deeper understanding of how they weighted data from several verifiable sources to provide a comprehensive, realistic evaluation of what it costs to raise a child in the average American community today.

Factors that impact the cost of raising a child

These averages can act as a starting point to get a general idea of the costs involved with raising a child. But your family’s costs are going to differ based on how you spend. Additionally, several factors contribute to how high or low your individual costs could actually be. 

For example, raising a single child in Marin County, California – consistently one of the highest cost-of-living areas in the US – costs an average of $116,658 each year if you account for housing, food, transportation, healthcare, childcare, and other necessities (excluding any family taxes).

On the flip side of that coin, raising a single child in Todd County, South Dakota, costs an average of $52,854 per year, by the same metrics – that’s less than half the cost of raising a child in Marin County, CA.

Another important factor is how long your child stays at home before becoming financially independent. Though some children do leave home at 18, you may very likely be taking care of your children until their mid-20s or later, depending on college attendance, career prospects, finances, etc.

What are some other costs of raising children to keep in mind?

As noted briefly above, these monthly/annual cost averages for raising a child aren’t all-encompassing. There will be myriad other costs associated with the process, including the option for private schools, the eventual first car purchase (and any associated repairs), miscellaneous gifts/toys/travel/recreation, and savings for college or higher education.

And, as any parent of an aspiring musician will tell you, an adolescent’s hobbies can be expensive. Even after-school activities and sports add up.

For higher education, many parents are opting to start their children’s college funds, such as 529 plans,  at birth and slowly contribute each month along the way so as to make the investment more manageable when the time comes.

Ways you can balance the cost of raising a child

Although having children comes with inevitable expenses, there are ways to reduce some of the associated costs and make life changes that can save you money. 

There are also tax benefits of having dependents that can help you save when it comes time to file. When preparing your annual tax return, consider checking to see if you qualify for the Child Tax Credit. This credit allows you to subtract up to $2,000 per child under 17 years of age from your tax bill. Keep in mind that eligibility requirements apply.

There are also several other tax credits that ease the amount of income tax you’re paying each year. You might be able to reduce your tax bill if you’re paying for childcare, employing your child, and more. If you need help determining which credits and deductions you qualify for, working with a TurboTax tax expert can ensure you don’t miss any.