Raising a child in the US costs $241,080

Have you ever wondered what the cost of raising a child is? According to a new report by the US Department of Agriculture, a child born in 2012 will cost about $241,080 to raise up to his/her 17th birthday.

If you adjust the figure for inflation, the figure stands at $301,970.

Kevin Concannon, Under Secretary for Food, Nutrition and Consumer Services, said:

“Speaking as a father and a grandfather, I know how much we as parents want to give our children the tools they need to excel at anything they set their minds to—from the essentials, like a roof over their heads and a quality education, to the fun stuff, like a brand new soccer ball, piano lessons or a trip to summer camp. We work hard to ensure our children’s future happiness and success each and every day.”

Raising a child today fraught with new challenges

The next generation will most likely be facing a new challenge that threatens their future health and well being – diet- and obesity-related diseases.

According to government figures, nearly one third of all young people in America are seriously at risk of developing heart disease and type 2 diabetes – both mainly preventable diseases. However, a recent report on falling rates of early childhood obesity has has been encouraging.

According to the new report, an average American middle-income family with a child born in 2012 can expect to spend:

  • About $241,080 for food, shelter, and other requirements associated with the child’s upbringing for the following 17 years.
  • This translates to $301,970 when adjusted for inflation.
  • This represents a rise of 2.6% compared to a child born in 2011.
  • Expenses for clothing, health care and child care saw the greatest percentage rise compared to a child born in 2011.
  • Expenses for transportation, food and housing, plus miscellaneous expenses rose moderately in comparison to 2011.
  • The 2011 to 2012 rise is much less than the average annual increase of 4.4% since 1960.

Concannon said:

“As the economy continues to recover, families are naturally cost conscious. This report gives families with children a greater awareness of the expenses they are likely to face,” said USDA Food, Nutrition and Consumer Services Under Secretary Kevin Concannon. “The report is also a valuable resource for courts and state governments in determining child support guidelines and foster care payments.”

The report, which comes out every year, is based on the US government’s Consumer Expenditure Survey.

For 2012, yearly child-rearing expenses for a middle-income two-parent American family ranged from $14,700 to $12,600, depending on how old the child was.

  • A two-parent family earning less than $60,640 annually is expected to spend $173,490 on a child from birth all the way through to high school.
  • For families earning between $60,640 and $105,000, the figure is $241,080.
  • A family earning over $105,000 is expected to spend approximately $399,780.

Robert Post, Ph.D., Executive Director of the Center for Nutrition Policy and Promotion, part of the USDA, said:

“One of the major expenses on children is food, and at USDA many of our programs are focused on making sure that children have access to healthy foods. On our website we provide shopping strategies and meal planning advice to help families serve more nutritious meals affordably through the 10-Tips Nutrition Series and the Thrifty Food Plan. Our MyPlate symbol and the resources at ChooseMyPlate.gov provide quick, easy reference tools to facilitate healthy eating.”

Raising a child – housing remains largest expense

For the average middle-income family in the USA, the single largest expenditure on raising a child is housing costs, averaging 30% ($71,820) of the total cost over the 17-year period.

Child care accounts for 18% of expenditure, and education 16%.

The author of the report stresses that the calculations do not include costs linked to pregnancy or those after high school.

Urban northeast USA is the most expensive part of the country to raise a child, followed by the urban West and urban Midwest.

The urban South and rural areas have the lowest costs for raising a child.

Study author and economist Mark Lino, Ph.D., said “Lower housing costs contributed to the reduced expenditures for families in rural areas. Families in rural areas also saw lower child-care and education expenses.”

Housing, as far as raising a child is concerned, has remained the largest expense since 1960, when the first report was published.

A family with a child born in 1960 would have expected to spend $25,230 during his/her first 17 years of life. Adjusting that figure for inflation (2012 real terms), the figure is $195,690.

Child care costs were “negligible” in 1960. Child health care costs have more than doubled since 1960.

As a family has more children, expenses per child decrease. A family with at least three children spends about 22% less per child than a family with just two kids.

Children in large families share bedrooms, and have toys and clothes handed down to them. Food can be purchased in bulk in larger families, which brings down unit costs. Many private schools offer discounts for siblings.

Most experts say that disposable revenue (take home pay, disposable income) has not suffered because wages have increased by more, adjusting for inflation, than the cost of raising a child.

When raising a child – have “basic needs” changed?

However, there are so many items today that we take for granted and even consider as basic for living, which did not exist in 1960. Examples include computers, video game machines, electronic communications devices (mobile phones), cars, and far away vacations.

In many parts of the USA older children (and their parents) consider a “car for the child” as a basic requirement.