Tuesday, June 15, 2010

What Does it Cost to Raise a Child?

Raising children takes a great deal of time, energy and resources.  Parents, educators, organizations and governments may ask, “What does it cost to raise a child?”  The United States Department of Agriculture (USDA) has estimated the annual costs of raising a child from birth to age 17 since 1960 and shares the numbers in the Expenditures on Children by Families report.  The answer varies by household (two-parent or single household), numbers of children in the household and levels of income.

In 1960, a moderate-income, two-parent family spent about $182,857 (in 2009 dollars) to raise a child to age 17. A similar family in 2009 spent about $222,360 (an average of $13,080 per year)—a 22 percent real increase. Expenses include housing, food, transportation, clothing, health care, education/childcare, and other miscellaneous expenses (personal care items, recreation expenses, etc). Costs do not include college expenses or indirect costs (such as a parent taking work leave to raise the child).

Housing costs have been the largest part of total expenses for raising children (31-35 percent of child-rearing expenses). Childcare and education have increased considerably over the years (the report in 1960 did not include childcare).  This category makes up 17-22 percent of what it costs to raise a child.  Expenses on food vary from 17 to 34 percent of child-rearing expenses, depending on a two-parent or single parent household.

Based on 2009 figures, transportation expenses for children were about 15 percent of the total amount spent to raise a child for a two-parent home and 20 percent for a single parent home.  Clothing expenses took up about 5-7 percent of the total amount spent, and healthcare accounted for about 6-8 percent.

How can knowing the costs of raising a child be helpful? The USDA report has three main uses. One is education. Some schools use the information to help teens understand how much raising a child really costs, hoping that teens may wait to have children. Furthermore, families can use the information to set up spending and saving plans. Some families think about saving for college, but do not think about saving for costs of child care, as well. 

A second use is determining child support. In 2007, 26 percent of children lived with a single parent. Many single-parent families are in poverty and child support is one way to reduce poverty. States often consult the Expenditures on Children by Families report in calculating typical costs for children for state child support guidelines.

A third purpose of the report is to determine foster care rates. By the end of the federal fiscal year 2009, about 463,000 children were in foster care. About half the states use the USDA report to set the levels of foster care rates.

USDA bases child-rearing expense estimates on the Consumer Expenditure Survey. They estimate expenses for children by age of child, household income level, number of children in the family, and geographic area. The expenses for the budget categories represent what is actually spent rather than what should be spent.  The costs to raise a child are highest in the urban northeast and lowest in the urban south and rural areas.

For more details on child-rearing expenses by types of households or levels of income, please see the 2009 Expenditures on Children by Families report at http://www.cnpp.usda.gov/expendituresonchildrenbyfamilies.htm.

You can also use an interactive calculator to estimate child-rearing expenses for your household at http://www.cnpp.usda.gov/expendituresonchildrenbyfamilies.htm
 

References:

 

U.S. Census News Release. 50 Million Children Lived with Married Parents in 2007. Retrieved July 28, 2008, from http://www.census.gov/Press-Release/www/releases/archives/marital_status_living_arrangements/012437.html.

 

U.S. Department of Health and Human Services. (2009). Trends in Foster Care and Adoption. Retrieved June 15, 2010, from http://www.acf.hhs.gov/programs/cb/stats_research/.

 

USDA. (2009). Expenditures on Children by Families. Retrieved June 15, 2010, from

http://www.cnpp.usda.gov/expendituresonchildrenbyfamilies.htm.

 

 

 

Lucy Schrader, MA Educational and Counseling Psychology
University of Missouri Extension, HES Extension Associate State Specialist

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