Raising a child costs money.
You probably expect that.
But, just how much does it cost to raise a child?
According to the U.S. Department of Agriculture, a family will spend about $12,980 per child each year in a middle-income family with two children. “Middle-income, married-couple parents of a child born in 2015 may expect to spend $233,610 ($284,570 if projected inflation costs are factored in) for food, shelter, and other necessities to raise a child through age 17.”
For that two-child family, that means spending more than $25,000 every year on their kids.
That’s kind of scary.
Do you have to spend that much money on your kids? The good news is that you might not end up spending so much on your children. I know I don’t spend what the government thinks I should on my son.
How much does it cost to raise a child? It’s not the same for everyone
First off, it’s important to understand that the USDA doesn’t expect that everyone will spend the same amount on their children each year. In fact, if you use the USDA calculator to determine the average cost of raising a child, your results will vary depending on different factors:
Number of children
Your cost per child goes down when you have more. The assumption is resources like housing and transportation are shared. Plus, you have hand-me-downs to help you keep costs down.
Number of parents
The USDA takes into account the number of parents in a household. The disposable income you have helps determine how much you might spend on your kids. I was hoping for more nuanced results in my case, but the single-parent information just sticks with the national average.
Where you live
Your cost of living (and how much those kids will cost you) depends on where you live. The calculator divides regions into Northeast, South, Midwest, West, and Rural. You’re likely to spend less on your kids if you live in the Midwest or South versus living in the Northeast.
Income can also impact your cost to raise a child. The more you have, according to the calculator, the more likely you are to spend on your children. According to a Pew Research Center survey from 2015, extracurricular activities are impacted by income. Parents with higher incomes are more likely to ensure their children are involved in extracurricular activities. That means the cost of raising a child is higher.
How much does it cost to raise a child? My numbers
I decided to take a look at how much I spend on my 14-year-old son and compare it to what the USDA says I should be spending. As you can see, the USDA thinks I should spend $23,612 a year:
The USDA breaks down the information into major costs like housing, food, transportation, clothing, healthcare, childcare and education, and other.
I used my personal finance software to generate a graph showing the spending categories that relate to my son, and you can see the difference:
According to my own information, I spend about $16,132.18 on my son. This first look is deceiving, however. I’ve included the total rent cost, our bills, car costs, and groceries. These are items that are spent on me as well, so I think it makes sense to halve those amounts to reflect that I account for half our costs in those areas.
The actual cost to raise a child for me is right around $10,051.28. We do travel, but it’s hard for me to gauge the cost, since we use points to pay for airfare and many of our hotel rooms and all the traveling he does is a result of my desire to travel. At most, the cost of my son’s travel is $1,000 a year. My ex also kicks in to help pay the costs in the form of child support, so I don’t bear the entire cost on my own. He also pays for my son’s health insurance, amounting to about $1,290 per year.
Overall, the cost is probably right around $12,341.28. That’s substantially less than $23,612 the USDA assumes I should be spending, based on my income.
How does my spending on my son stack up with the average cost of raising a child according to the USDA? Let’s have a look:
|Housing||Food||Transportation||Clothing||Healthcare||Childcare and Education||Other|
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How to spend less on raising a child
So, how do you spend less on raising a child?
A lot of it has to do with where you live and what you buy. My housing costs are well below the national average because I choose to live in Idaho.
I used the cost of living calculator from PayScale to compare the cost of living in Boise, Idaho to the last place I lived, Philadelphia:
As you can see, it costs about 20 percent less to live in Idaho. In fact, I don’t live in Boise. I live in a different town that’s even less expensive. You can see some of my biggest savings are in housing, food, and transportation.
There are other ways to spend less when you raise your children. Here are some ways to save on the cost to raise a child:
One of the most effective ways to save money on food is to plan your meals so you eat out less. My son and I rarely eat out; it usually happens when we travel. Otherwise, we use the meal planning service Blue Apron, and I do a little meal planning as well.
We also shop sales for bulk deals and look for ways to save on groceries. By using a list when we shop, freezing some of our food, and looking ahead, we rarely buy more food than we need. It reduces food waste and costs much less.
My housing focuses on larger common areas and smaller bedrooms. That way, we are more comfortable in smaller spaces. We do rent a larger house right now, but our location makes it less expensive than a one-bedroom luxury apartment outside Philadelphia.
I’ve heard the argument that having children means a bigger, more expensive house. However, in my case, I’m probably saving more because of my son. Without the desire to live near my parents for support and a low cost of living in Idaho, I’d probably live in a big city, but I’d be paying more for a smaller place.
Hand-me-downs, seasonal sales, and discount stores like Ross and TJ Maxx can help you save money. We regularly buy my son’s clothing at low-cost outlets so we don’t pay as much.
If you have a consignment shop or thrift shop nearby, that can be a great way to save money on all sorts of clothing and other items.
Look for deals
I’m always looking for deals on travel, education, and more. My use of rewards credit cards and hotel rewards programs helps me save money on travel. We rarely pay for airfare, and a lot of the time hotels are “free” for us as well. I travel a decent amount on my own. I pay for that travel and rack up the points, and then when my son comes with me it’s practically free.
You can also look for deals on groceries, eating out, and activities. Social sites and websites that offer rebates and coupon codes can be great for finding deals and getting discounts.
When my son was younger, he loved story time at the library. Our city puts on music in the park during the summer. We love biking, camping, and hiking. You can make memories with your families without spending a lot of money.
Look for free ways to entertain your kids. Check with your local parks and recreation department to see about sports leagues so you can reduce what you spend on extracurricular activities.
We don’t like saying no to our kids, but sometimes it’s necessary. My son can choose one sport, a musical pursuit, and one self-improvement extracurricular. This keeps our costs down and it helps prevent over-scheduling.
You might also have to say no to the latest trendy clothes or toys and gadgets. Stick to your guns and help your kids learn that sometimes they don’t get everything they want. It’ll be better on your pocketbook.
While it’s true that you can spend a lot on your children, the reality is there are ways to cut down on costs. The USDA offers some insight into the average cost of raising a child, but it doesn’t have to be that much. With some planning, you might be able to get away with spending much less than the government thinks you will.