Is Raising a Child Getting Unaffordable?


Source: Gallup

It’s no secret that raising a kid costs a lot of money. Even excluding the cost of a college education — which, according to the College Board, costs an average of $17,860 at public institutions and $39,518 at private institutions — you could probably buy a house for the amount of money it takes to raise a child. Case in point: In 2013, the U.S. Department of Agriculture (USDA) estimated that it costs, on average, $241,080 to raise a child from birth to age 18; in December, the median sale price of a new home in the U.S. was $265,900. Add in the cost of college and you can skip the mortgage and go straight to property ownership.

If the average cost calculated by the USDA doesn’t jibe with your personal experience, blame the necessary evils of averaging and estimating. Costs vary enormously by circumstance and region, so the average may actually be a poor representation of the whole. For example, the USDA estimates that the cost of raising a child in rural areas is $190,290, 21 percent below average. The estimated cost in the urban Northeast is $277,170, 15 percent above average and nearly 46 percent above the cost of raising a child in a rural area.

Transportation, healthcare, and education needs and costs can also vary enormously. The USDA estimates that, on average, 30 percent of the total cost of raising a child goes to housing, 8 percent to healthcare, 14 percent to transportation, 6 percent to clothing, 16 percent to food, 18 percent to child care and education, and 8 percent simply evaporates into a cloud of miscellaneous costs.

Gallup offers a different perspective on the issue. The firm asked Americans about their spending habits and broke down the results based on the number of children the respondents had. The results exclude spending such as buying a house, buying a car, or paying bills. Average daily spending reported by individuals without children was $79. For those with at least one child under the age of 18, average daily spending was $108, or $29 per day higher.

Unsurprisingly, average daily spending increases with the number of children. Those with two children under the age of 18 report spending an average of $107 per day and those with three report spending an average of $123 per day. Gallup’s breakdown is below. The average additional cost of each new child, in terms of daily spending, is $13.20. It’s interesting to note that, according to the survey data, it is relatively cheap in terms of daily spending to go from three to four children.

More From Wall St. Cheat Sheet: