The Parenthood Price Tag

Benjamin Haas |

Baby booties, baby toys, baby showers, baby joys – some of the best things come in small packages! It can be very exciting when you begin thinking about starting or expanding your family. But as cute as babies are, there are some NOT so “cute” things too, like poopy diapers and the rising costs that come with raising children! For anyone who has been there before, I’m sure they will tell you, “Kids aren’t cheap!”  

Recently, we were discussing adoption with a client. We became very curious how to “financially plan” for this exciting and monumental change in our client’s lives and decided to do some research. What we found was interesting and we wanted to share. Here’s a breakdown of the actual numbers on how much it costs to raise a child (age 17).   

The most recent study I could find was conducted by the U.S Department of Agriculture in 2017 and the total cost to raise a child from birth to age 17 was $284,5941! Please keep in mind that the study assumed an inflation rate of 2.2% (it’s currently hovering around 6% [2]) and they didn’t include any amount saved for higher education costs. There has been an updated analysis of that study choosing to keep everything in the original study the same except changing the inflation rate to 4% in years 2021-2032, which showed that the number is actually around $310k [1].  

What’s included in that $310k [3]? 

  • Housing (29%) - $89,900 

    • This is all based on where you choose to live and the associated costs that come with it (location, taxes, homeowners’ insurance, etc). This number may also not be as high if you have more than one kid. For instance, you already moved from your 1-bedroom apartment to a 3-bedroom home, which can comfortably fit 2 kids.   

  • Food (18%) - $55,800 

    • Once again, this number could be higher or lower depending on if you had to buy formula, if you choose to buy organic, eating at home or choosing to eat out.  

  • Child Care & Education (16%) - $49,600 

    • Remember, this is NOT including any higher education costs and only looking at daycare expenses, catholic schools, or other education expenses  

  • Transportation (15%) - $46,500 

    • This is more so based on the size of your family since you may need to upgrade your vehicle to fit everyone which means more expensive car payments and potential maintenance costs. Once your child becomes of driving age, this number accounts for insurance, additional gas, and any other associated costs 

  • Healthcare (9%) - $27,900 

    • This accounts for premiums and potential other out-of-pocket expenses. This number does NOT include any costs associated with being pregnant and childbirth.  

    • The average healthcare costs associated with pregnancy, childbirth, and postpartum care is $18,865 and average out-of-pocket payments for women in large group plans are $2,854 [4] 

  • Clothing (6%) & Miscellaneous (7%) - $18,600 & $21,700 

    • This is the catch-all for clothing, haircuts, toys, etc. and can vary based on location and the potential need for warmer clothes. This is also where any family vacation expenses are captured too 

Whether it’s having children or even caring for aging parents, taking on that responsibility has both emotional and financial impacts. The key is to focus on what you can control now (saving, having a budget, obtaining life insurance, establishing, and reviewing estate documents, and prioritizing any goals you may have) so that you feel more confident and secure in whatever comes your way. Especially if the stork drops your baby off on your front doorstep 😊   








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