The Average American Spends This Much Raising a Child

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  • Raising kids can be expensive.
  • The average American parent spends more than a quarter million dollars doing so.
  • There are ways to keep costs down, including watching your housing expenses and buying toys and clothing used.

There are a few ways to save but it's still expensive.

In 2015, the U.S. Department of Agriculture provided an estimate for how much a child would cost to raise. The numbers were shocking.

Middle-income married couples could expect to spend $233,610 from birth to adulthood. And this was on essential expenses such as food and shelter -- not things like college costs, which are extra. After accounting for the impact of inflation, this number is now close to $286,000.

Obviously, that's a lot of money -- but parents can try to find ways to keep costs down a bit so they can more easily afford to cover their kids' costs without going into credit card debt or busting their budget.

Here's what parents are spending money on

According to USDA data, the bulk of the costs of raising a child goes to three specific things:

  • Housing, which accounts for 29% of costs
  • Food, which accounts for 18% of child rearing costs
  • Child care and education, which accounts for 16%

However, unsurprisingly, costs change depending on a child's age. Children under the age of two tended to cost around $300 per year less than average while teenagers 15 to 17 cost $900 more in large part because they generally eat more at that age and transportation expenses increase as they get their own vehicles or parents pay for their car insurance.

The good news, though, was that having each additional child didn't double the parents' costs due to economies of scale. The USDA found that expenses per child were 27% more on average for married couple families with one child than two, and pre child expenses were 24% less for families with three children compared to two.

The fact that multiple kids can share bedrooms, food and toys, and that parents can buy in bulk for multiple children, all help to explain why more kids doesn't make prices go up as much.

How can you keep child-rearing costs down

It's clear from the USDA data that having children is a very expensive proposition. But the good news is, parents can find ways to reduce spending on their children while still providing for their needs.

Some of the different ways to help reduce the expenses associated with kids include:

  • Getting creative with childcare: Parents may want to look into alternative arrangements, such as trading care with other families or sharing a nanny with others in the neighborhood, rather than paying for daycare or individual nanny services.
  • Buying used toys and clothing: Children tend to outgrow items really fast so there's a very large used market for kids' goods. Parents can often purchase items at a fraction of retail price if they buy used.
  • Evaluating the differences between needs and wants: Kids need food, but they don't necessarily need expensive pre-prepared snacks or name brand cereal. Likewise, children will be just fine in used clothing or off-brand items rather than designer gear.
  • Avoiding buying too much house: American family homes have grown much larger over time, but kids are better off sharing a bedroom or a bathroom than having parents who are stressed about money all the time because they bought a house they couldn't afford.

By making smart spending decisions and setting a budget for purchases for your kids so you do not overspend, you can still raise happy, healthy children but can also have some cash left over for other things.

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