Here's How Much It Costs to Raise a Child

Having and raising kids has become a financial commitment comparable to buying a home. A family is estimated to spend $310,605 to raise a child born in 2015 until they are 17 years old, assuming inflation is 4% over those years, according to an analysis of Department of Agriculture data done by the Brookings Institution.

Read on for more statistics on how expensive it is to raise kids.

How much it costs to raise a child

The U.S. Department of Agriculture (USDA) estimated in 2015 that a middle income family spends on average $233,610 to raise a child to age 17, not factoring for inflation.

Assuming inflation is 2.23% on average over the 17 years of support parents provided a child born in 2015, it would cost $284,594, per the USDA.

Assuming inflation is 4%, the child was born in 2015 and raised until age 17, it would cost $310,605, based on a 2022 Brookings Institution analysis of USDA data.

Those inflation estimates are based on USDA and Brookings Institution analysis. Given the rise in inflation since 2021, it's likely that the cost of raising a child has increased.

The cost of raising a child by age

The annual cost of raising a child increases as the child gets older. Factors include higher food costs for teenagers and added transportation costs due to additional car insurance premiums or an additional vehicle purchase.

Here's how much it costs per year to raise a child, based on their age.

Under the 4% inflation scenario, annual expenditures on raising a child exceed $15,000 when they turn eight and raise over $20,000 a year when they turn 14. Parents are estimated to spend nearly $25,000 when their child is 17.

Child-raising expenses don't rise as dramatically under the 2.23% inflation scenario. Parents will spend just under $15,000 the year their child turns 8 and just over $20,000 when they turn 17.

How much it costs to raise a child by category

Housing is the costliest part of raising a child, making up 28% of child-rearing expenditures for middle-income families, based on USDA's 2015 data.

Food is the second-largest expenditure, accounting for 18% of middle-income families' child-raising budget. Childcare and education accounts for 16% and transportation accounts for 15%.

Housing and food take up a larger share of low-income families' budgets and a lower share of high-income families' budgets relative to middle-income families. High-income families devote a larger percentage of their child-raising budget to childcare and education -- 23% compared to 16% for middle-income families and 12% for low-income families.

How has the cost of raising a child changed over time?

Pairing USDA's 2015 estimates with inflation data, The Motley Fool Ascent estimated how much it would have cost a middle-income family to raise a child in previous years. These are ballpark numbers meant to give a sense of how much more expensive it's become to raise a child -- not exact figures.

Costs grew most quickly from 1980 to 1990 -- a reflection of high inflation in that decade compared to the other periods.

These estimates assume that parents have not changed their budgets much since 1980, although that is unlikely, particularly in times of high inflation.

Still, it's likely that the spike in inflation starting in 2020 has raised the costs of raising a child and perhaps changed budget priorities for parents.

The declining U.S. birth rate

The birth rate in the United States among women considered to be of childbearing age (15 to 44) has steeply declined since 2008 and has not recovered despite improving -- albeit with some disruptions -- economic conditions.

From 1980 to 2007, births per 1,000 women aged 15 to 44 stayed between 60 to 70. Since 2007, the birth rate has fallen to 56 per 1,000 women in 2022, according to data from the National Center for Health Statistics.

While the Great Recession likely caused an initial decline in birth rates, economists have not been able to identify other economic, social, or policy factors that correlate to the continued decline in birth rates even as economic conditions improved. Birth rates have declined across demographic groups which suggests that broad shifts in attitudes towards childbirth may be happening.

That idea is backed by survey data from Pew, which found in 2021 that 44% of non-parents are unlikely to have children, up from 37% in 2018.

The reasons why? Fifty-six percent of those who said they're not likely to have children simply said they just don't want them. Among those who gave a reason, the most commonly cited ones were medical reasons, financial reasons, and not having a partner.

It's impossible to point to a single factor behind the declining birth rate. Women have more career opportunities than ever before, which could lead them to put growing a family on hold. Inflation has made childcare and other necessities more expensive. Some otherwise prospective parents may be worried about climate change or the long-term cost of living for their potential children. Still, researchers have not been able to confidently say that those factors are behind the declining birth rate.

A sustained decline in the birth rate can generate economic challenges, particularly if population declines outstrips growth, which can be buttressed via immigration. Population growth below the replacement rate generally results in a shrinking workforce, less productivity, and lower growth. It also likely puts pressure on the safety net for elders, like Social Security, which is funded through employed Americans' taxes.

Average cost of childbirth, adoption, IVF, and surrogacy

Spending on raising a child can start well before the child is born. Parents who pursue adoption or surrogacy also incur significant costs before formally growing their family. Here's a rundown of how much those expenses can be.

The average cost of childbirth

The average cost of childbirth is $18,865 and average out-of-pocket payment adds up to $2,854 for those on large group plans, according to the Peterson-Kaiser Family Foundation. Those numbers include health costs linked to pregnancy, delivery, and postpartum care.

Surgical procedures during a pregnancy, like a C-section, can add thousands more to a hospital bill, although the final out-of-pocket payment depends on insurance coverage.

The average cost of adoption

The cost of adoption has a wide range. Adoption from the child welfare system is "virtually free," according to the Department of Health and Human Services (HHS). Additionally, families who adopt through the welfare system may be eligible for subsidies until the child turns 18.

The cost of an independent adoption with the use of an attorney ranges from $25,000 to $45,000, according to HHS

The cost of an adoption from a private agency outside foster care ranges from $30,000 to $60,000, per HHS.

The cost of adopting a child from outside the United States can cost between $20,000 and $50,000, according to HHS.

The average cost of IVF

In-vitro fertilization, an option for infertile couples, can cost $10,000 to $15,000 per session, according to the Society for Assisted Reproductive Technology. Costs can change based on the patient's insurance, characteristics, and clinic.

IVF is not guaranteed to work after one session, so costs can quickly add up.

The average cost of surrogacy

Surrogacy generally costs over $100,000, although estimates range widely. Surrogacy comes with a number of costs, including compensation for the surrogate, legal fees, and agency fees if that is how the surrogate was sourced.

Prospective parents are also expected to cover premiums and deductibles for their surrogate's health insurance. Health costs can balloon if IVF and associated procedures are involved.

Family budgeting tips for raising kids

Having children is among the most joyous milestones for many couples, but it's also among the most expensive. Here are some ways to save money when growing a family.

• Plan ahead for big, known expenses: Budget and save for larger, repeat purchases that are on a predictable schedule, like summer camp, back-to-school shopping, birthdays, and holidays. These are often seasonal sales to take advantage of when it comes time to spend on these expenses, so set reminders to begin bargain hunting at certain times of the year.
• Get creative with vacations and birthdays: Not every special occasion has to involve expensive tickets, reservations, travel, and so on. Take advantage of cheaper recreation options, like camping. Look for free museum days and other discounted cultural experiences for kids. Lean into DIY for birthday decorations and make decorating for the holidays a fun crafting opportunity.
• Communicate with your partner: The financial commitment of starting a family is significant and will likely impact your family's personal finances, budget priorities, and goals. Being on the same page as your partner on how much you can spend, what you should be spending on, and what your family financial goals are is crucial to head off conflict and create a more resilient financial foundation.
• Invest in a 529 plan or custodial IRA: A 529 plan is a tax-advantaged investment account, like a 401(k), designed to help families save for education expenses. 529s are typically used to pay for higher education, like college. A custodial account can be used by parents or adults to gift or invest money for a minor. Unlike a 529, they don't have a specific use attached to them.

Sources

• Brookings Institute (2022). "It's getting more expensive to raise children. And government isn't doing much to help."
• Department of Health and Human Services (2022). "Planning for Adoption: Knowing the Costs and Resources."
• Melissa Kearney, Phillip Levine, and Luke Pardue (2022). "The Puzzle of Falling US Birth Rates since the Great Recession."
• National Center for Health Statistics (2023). "Births in the United States, 2022."
• National Center for Health Statistics (2023). "Crude birth rates, fertility rates, and birth rates, by age, race, and Hispanic origin of mother: United States, selected years 1950-2019."
• Peterson-Kaiser Family Foundation (2022). "Health costs associated with pregnancy, childbirth, and postpartum care."
• Pew (2021). "Growing share of childless adults in U.S. don't expect to ever have children."
• Society for Assisted Reproductive Technology. "Frequently Asked Questions."
• U.S. Department of Agriculture (2017). "Expenditures on Children by Families, 2015."