Cost of Raising a Child

The cost of raising a child is the total amount a family spends on a child from birth to (typically) age 18, aggregated across housing, food, transportation, clothing, healthcare, childcare and education, and miscellaneous everyday expenses. Federal figures come from the U.S. Department of Agriculture's "Expenditures on Children by Families" series, whose most recent installment was released in January 2017 and covered a child born in 2015. The report estimated that a middle-income, married-couple family would spend about $233,610 in 2015 dollars raising a child through age 17, and about $284,570 for the highest-income group.

What the USDA report actually measures, and what it deliberately does not. The USDA figure is what a typical family in the sampled income bracket spends on a child through age 17, so college costs and any adult-child support are excluded. It uses the Consumer Expenditure Survey to divide household spending among household members. Housing is typically the largest category at about 29% of the total, followed by food at about 18%, and childcare and education combined at about 16%; the balance covers transportation, healthcare, clothing and miscellaneous items. It reports averages, not medians, so a small number of high-spending households pull the number up.

The figure is not current, and the USDA has not updated it. The 2017 report is the last in the series. Any headline number below 2017 dollars is a projection somebody added to the original figure — usually by inflating it for the CPI — and is not itself a USDA figure. Two categories in particular have moved faster than the headline CPI in the years since: childcare, which now regularly runs 10 to 20% of household income in high-cost metros, and healthcare, where family premiums and out-of-pocket costs have both climbed. So the underestimate direction is systematic. The Department of Labor's National Database of Childcare Prices is the current source for childcare, and Kaiser Family Foundation's Employer Health Benefits Survey the current source for family health-plan costs; those categories should be updated separately rather than folded into a single old aggregate.

The number is a description of behaviour, not a target. Two households raising the same child in the same city can spend very different amounts on that child and both raise them successfully. The usable content of the figure is its category structure — which parts of the household budget grow with a child in it, and which do not — and its variation by geography and income, both of which suggest that the parents' housing choice and the parents' income together shape the number more than any specific parenting decision does.

A workable household estimate treats the cost of raising a child not as one number but as a set of budget-line changes. Housing usually moves once (a larger apartment, a house purchase) rather than gradually; food, healthcare and clothing scale roughly linearly with the child's age; childcare and education are lumpy: very high in years 0–5 in most metros, materially lower once the child starts public school, and potentially very high again for private school or college. Each family plots the changes onto its own baseline and works with the difference, rather than trying to reconcile to a national average.

A hypothetical illustration built up from the categories, not from the aggregate. The Kims live in a mid-sized city and have a new baby. Housing does not change in year one because they were already in a two-bedroom apartment. Food is roughly $130 a month higher. Health-plan premiums rise about $410 a month for family coverage. Full-time daycare in their neighbourhood costs about $1,950 a month. Diapers, clothing, savings for college and other everyday costs come to about $250 a month. Their year-one incremental cost, before any parental income loss, is about $33,000 (the sum of those monthly lines annualized). Their year-six cost, once their child is in public kindergarten and after-school care replaces daycare, might drop to about $12,000. Neither number is universal; both are patterns the Kims can measure and plan against.

Uses of the figure

• As a category map — housing, food, childcare, healthcare, education, transportation, everything else — so the family can identify which lines of their budget will grow and by how much.
• As a geographic and income-band comparison, since USDA reports variation by region and by household income and those patterns have largely held even though the levels have moved.
• As a starting point for a college-funding plan, though college itself is excluded from the USDA number.

Traps

• Treating the average as a target. It is a description of what families spent, not a floor a family must meet.
• Comparing today's cost to the 2017 USDA number without adjustment, which understates childcare and healthcare in particular by more than a simple CPI adjustment captures.
• Assuming the number is a lifetime cost — the USDA figure stops at age 18 and excludes college and any adult-child support.
• Ignoring parental income lost to caregiving. Reduced hours, delayed promotions and a parent leaving the workforce entirely are large hidden costs the USDA figure does not attempt to capture.