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The real costs of having and raising a child


The Cost of Raising Children

Those cute bundles of joy you see strolling down the sidewalk may pull at your heartstrings as you consider starting a family of your own.  But what does it actually cost to have a baby and raise a child to the age of 18?  In the United States, that price tag is close to $200,000.  And that does not even include the cost of college.

Given the cost, you would be well-served to arm yourself with additional savings before you begin the journey of parenthood. How much to save will depend on the lifestyle that you’ll anticipate having once the baby arrives.  In a two-parent family, will both parents continue to work full-time or will one (or both) of you stay home to provide child care?  Will you move to a larger home to accommodate your growing family?  Will you need a car (or a second car)?  Breaking down anticipated child care, housing and transportation needs for at least the first year will assist you in developing a savings plan.

Pregnancy and birth

Let’s begin with pregnancy.  The cost of maternity care and delivery can range significantly and depends significantly on your health insurance provider.  The factors that come into play are your health insurance plan’s premiums, co-pays, co-insurance and deductibles.  If you have health insurance through your employer, review your health plan to see what is covered.  If you do not currently have health insurance, pregnancy is considered a “qualifying event” that allows you to purchase health insurance in the health care marketplace.  Nowadays all health insurance policies include maternity care as part of their standard package.

Once the baby arrives you'll need to know how much leave you and your co-parent will receive from your jobs.  Some employers offer paid time off to their employees, while others will allow you to use sick and/or vacation time once the baby arrives.  Employees of companies with 50 or more workers are covered by the Family and Medical Leave Act (FMLA) and have the right to take up to twelve weeks of unpaid leave from their jobs to care for their newborn.

Raising a child

Here are some of the categories that factor into the total cost of raising a child:

Housing:  About 30 percent of the cost of raising a child is the family’s housing, although if you live in a high-cost area this number could be more.  While you may not think this matters much as you have to live somewhere anyway, having children means that you might decide to live in a larger home than you would if you were by yourself.  It could also mean more bedrooms and extra space devoted to Lego constructions, doll houses or sporting gear.

Education & child care:  As there are more two-parent working families now than ever, child care is a necessity and makes up close to 20 percent of the cost of raising a child.  According to the USDA, the expenses in this category include day care, baby-sitting, and elementary and high school tuition, books, fees, and supplies.  For families paying for full-time, year-round day care, this amount could grow.

Food:  Food costs take up about 15 percent of the total cost of raising a child.  This might make you think twice about taking your kid out to a restaurant for a meal that she never finishes.                    

Transportation:  Similar to food costs, transportation makes up about 15 percent of the cost of raising a child.  Private automobile expenses include the down payment you made on your car as well as your car loan, the gas needed to fill the tank, maintenance and repairs, and insurance premiums.

Health:  Health care for your precious little wonder (think runs to the emergency room or braces) can take up to 10 percent of the child-raising cost.                

Clothing:  Why do they grow so fast?  And their feet seem to grow even faster!  Clothing amounts to about 5 percent of the cost of raising a child.

Other:  Count on the remaining 5 percent of this amount to be that “other” category that is not included above.  They may eventually want a haircut that is not performed by you or one of those portable game devices (or whatever technology that has been invented by the time they get to be tweens).              

Help with the Cost of Raising a Family

What if, despite your best intentions, your income falls short of the amount you need to care for your child?  Maybe you have suffered a medical emergency, unexpected unemployment or a divorce.  Know that there are public benefits that act as a safety net for families in need.  Children's Health Insurance Program (CHIP) and Medicaid provide needed health coverage; WIC, SNAP, and School Breakfast and Lunch provide food; and Fuel Assistance and Weatherization Assistance can keep your home heating bills down.  For some families unemployment insurance or Temporary Assistance for Needy Families (TANF) provides temporary direct payments to cover the costs of running a household.

Many people would describe having a child (or children) as a priceless experience that is worth any cost.  Some plunge into parenthood without even giving finances a thought.  But a little planning goes a long way in having the family life you want.

Tools to Help

Cash Flow Budget Template


SMART Goal Worksheet


Public Benefits and Community Resources

Learn More

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What You Can Do Right Now

Information is great. But taking small steps now can lead to big changes.
  • Today
  • Begin to plan for a family by getting a handle on your financial life. Use our tool “Cash Flow Budget Template” to track your income and spending for a number of months to get a better understanding of your financial situation.
  • Next Week
  • Think about how your life might change once a baby arrives with regards to your work hours (and need for child care), housing and transportation.
  • Use our SMART Goals Worksheet to develop a savings plan to build up a cash reserve related to these three household expenses.
  • In the Next Few Months
  • If times get tight and you're not sure how you might pay your bills, public benefits are available that protect families with children. Use our tool “Common Public Benefits” to learn more.