What this article covers
Opher Ganel breaks down what it really costs to raise a child in the US, drawing on Brookings projections, the Washington Post calculator and USDA data that put the bill at about $310,600 per child with inflation for a middle-income family with two kids. He shows how that cost shifts with income, a child’s age, family size and region, and explains why comparing today’s costs to today’s income gives a fairer, less frightening picture.
Key Takeaways
Raising a child can cost more than $310,000 with inflation, or over $621,000 for two
Brookings projects $310,605 per child for a middle-income family with two kids once inflation is included. Even without inflation, the Washington Post calculator puts the total for two kids at $363,600 at a $31k income, $434,400 at the ~$53k median and $497,400 at $90k, with housing (30%), education (22%) and food (13%) the biggest categories. At the median income, two kids take over 45% of gross annual income.
The per-child cost drops as families grow: an only child costs about 27% more, three or more about 24% less each
Based on USDA data, that works out to about $394,500 for one child versus $236,100 each for three or more, so kids two and three together cost about 20% less than the first. The savings depend on kids being close in age (typically just over two years apart), since hand-me-downs, shared rides and economies of scale shrink when siblings are born many years apart.
Compare today’s child-raising costs to today’s income, not inflated totals to your current salary
Real median household income rose about 27% from 1984 to 2021 (roughly 0.6% a year), and median income tends to rise with age from 25 to 45, so your pay should on average outpace the rising cost of kids. Still, counting the opportunity cost of investing less can nearly double the cost, and financial planner Blaine Thiederman urges parents to cut fixed costs and plan conservatively for children’s health surprises.
Thinking about having kids? It’s important to understand how much it costs to raise a child, or multiple children, for growing families.
Does it ever feel like having kids is just too unbelievably expensive?
I mean, really, what are we supposed to do? Not have kids? Isn’t the “graying of America” bad enough already?
According to the US Census Bureau, “In less than two decades, the graying of America will be inescapable: [By 2035] Older adults are projected to outnumber kids for the first time in US history… Americans are having fewer children… Fewer babies, coupled with longer life expectancy, equals a country that ages faster.”
Blaine Thiederman MBA, CFP, says:
I’ve seen some clients decide against having children altogether because they don’t think they can afford it or because they don’t want kids. This is reflected in the trend in South Korea as well with their massive decline in birth rates.
Having raised three kids, we experienced first-hand how expensive it is just getting them to age 18. Plus, paying for college to give them a leg up in life made it even more costly.
If you’re considering having children or already have some young ones, the Washington Post has a helpful calculator that shows the budgetary impact of raising children across different ages and budget categories.
How Much Does It Cost to Raise Two Children? Costs by Income, Age and Category
Here are some nuggets from the calculator (assuming you’re 35 years old, to calculate income percentiles). Note that the calculator assumes you have two kids.
- With inflation, the Brookings Institute projects your total cost of raising kids to age 18 will reach $310,605. Each. That’s over $621k total!
- The cost changes based on your income. If you make the median of ~$53k, your annual cost will be over $12k per kid, for a total of $434,400 (without counting inflation).
- If you make $31k, placing you at the 25th income percentile, your annual cost will be over $10k per kid, for a total of $363,600 (again, without counting inflation).
- If your income is $90k, at the 75th income percentile, your annual cost (without inflation) will average nearly $14k per kid for a total of $497,400.
- The annual cost depends on age. For median-income families, the lowest annual cost is $11.4k for ages 6–8 and the highest is $12.6k for ages 15–17.
- The costs for housing are 30 percent of the total cost, education 22 percent, food 13 percent, transportation 13 percent, health nine percent, clothes seven percent, and miscellaneous (i.e., everything else) six percent. However, that breakdown changes for different ages (for example, education drops to a mere eight percent for ages 12–14, while food jumps to 22 percent for teens — no shock there, right?!).
- If you make the median income, raising two kids will gobble up over 45 percent of your gross annual income!
But what about those of us who have one kid? Or three plus?
After all, two (or even three) kids can sleep in the same room for years, and hand-me-downs save a good chunk of change…
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Is Each Additional Child Cheaper? One Child vs. Three or More
The Brookings Institute report and the Washington Post calculator both base their findings on a US Department of Agriculture (USDA) 2017 report of 2015 data.
That report estimates the costs of raising one child are about 27 percent higher than the per-kid cost of raising two, while the per-kid cost of raising three plus kids is about 24 percent lower.
Thus, the cost of raising one child (including inflation) would be $394,500, while the cost of raising three or more would be $236,100 each.
As you can imagine, these numbers are based on the typical differences between siblings’ ages, slightly more than two years.
If your kids are born many years apart, you’re not likely to save as much money per kid because, e.g., you won’t likely save your firstborn’s hand-me-downs for a decade.
Also, any savings in transportation (taking both kids to the same school) and food (economies of scale — making two meals isn’t quite as expensive as double the cost of a single meal, etc.) won’t be as high.
On the other hand, spacing kids apart by many years could make it easier to make do with a smaller home compared to having three-plus kids in the span of three or four years.
And as some of my friends can attest, having three kids in college at the same time is a special kind of financial hell.
How Child-Raising Costs Vary Across US Regions
Costs vary between regions, too, with the Urban Northeast 16 percent more costly than the lowest-cost urban area — the Midwest, and 37 percent higher than the cost in rural America.
The Good News: Bigger Families and Rising Incomes Ease the Burden
If you choose to have three or more kids, there is some good(ish) news.
Calculating from the above, the cost of raising kids 2+3 is 20 percent less than the cost of raising kid #1.
Think of it as getting two more for (less than) the price of (the first) one.
Finally, looking at inflation-adjusted costs and comparing them to your current salary isn’t quite fair math.
According to the St. Louis Fed, real (i.e., inflation-adjusted) median household income in the US increased by about 27 percent from 1984 to 2021, or an average of about 0.6 percent annually (though this wasn’t an uninterrupted increase, but rather six periods of increases interspersed with five decreases).
As a result, if you want to consider your own situation, you’d do better to compare current annual child-raising expenses to your current salary.
As your kids grow up, the annual costs will go up with inflation, but your salary should on average increase faster, especially when you consider that median income tends to increase with age from 25 to 45, and (more or less) stays at the high end of that range up to age 65.
The Bottom Line: Parents Carry a Cost That Benefits Everyone
If nobody was willing to have kids anymore, society would literally die out.
That makes parents societal heroes, at least in my opinion. We work hard to raise the best future citizens we can, with little financial support from society.
The above paints the picture of just how severely this impacts our finances. And if you take into account the opportunity cost of setting aside and investing literally thousands of dollars a month less over a couple of decades, the cost nearly doubles!
Thiederman agrees:
Some of my clients want to have a stay-at-home parent, so the other parent focuses solely on their career and works (what seems to be) endlessly in order to afford it. Others plan to work until an older age than they’d like, and often have retired parents living close by to help raise the kids.
What I typically recommend to clients is to reduce fixed costs by moving to a less expensive area if they can’t afford the cost of raising a child, and even if they do that, I urge them to be conservative because kids’ health issues can be monumental, and it’s impossible to forecast how bad the future may be. It’s always more conservative to prepare and plan for the worst and hope for the best, rather than plan for the best and face a financial catastrophe unprepared.
So next time you hear a childless friend complain about his property taxes paying for schools he’ll never benefit from (at least in one Maryland county, nearly half of property taxes collected go to education), ask him:
- Shouldn’t he pay society back for the cost of his schooling?
- Would he like our country to continue existing beyond his lifetime?
- And most importantly, how willing is he to forgo his Social Security benefits, which your kids and mine will help pay for?
What to Read Next:
Frequently Asked Questions
How much does it cost to raise a child in the US?
According to the Brookings projection cited in the article, a middle-income family with two children will spend about $310,605 per child once inflation is included, or over $621,000 for both. Without inflation, the Washington Post calculator estimates more than $12,000 per child per year at the median income of about $53,000.
Is it cheaper per child to have more kids?
Yes, per child. USDA data show an only child costs about 27% more than each child in a two-child family, while families with three or more kids spend about 24% less per child. Those savings shrink when children are born many years apart, because hand-me-downs and shared transportation and meals save less.
Does the cost of raising a child depend on your income?
Yes. Families spend more on kids as income rises: the Washington Post calculator estimates about $10,000 per child per year at a $31,000 income, over $12,000 at the ~$53,000 median and nearly $14,000 at $90,000 (before inflation). Costs also vary by age, from about $11,400 a year for ages 6 to 8 up to $12,600 for ages 15 to 17 in median-income families.
Where is it most expensive to raise a child in the US?
The urban Northeast is the costliest region in the data the article cites. It is about 16% more expensive than the lowest-cost urban area, the Midwest, and about 37% more expensive than rural America.
How can parents afford the cost of raising children?
One financial advisor interviewed recommends reducing fixed costs, for example by moving to a less expensive area, and still planning conservatively because children’s health issues can be costly and hard to forecast. He also sees families rely on one parent focusing on a career, working to an older age or living near retired grandparents who help with child care.
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Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.
About the author
Contributing Writer, Wealthtender
My career has taken some unexpected turns, from earning a PhD in experimental high-energy physics, to conducting cosmic-ray research in Antarctica, to supporting NASA projects and programs, to running my own consulting business. I also run several other small businesses and help my wife run her Marriage and Family Therapy practice.
Those experiences taught me to question assumptions, think critically, and recognize that real-world decisions of any significance rarely have simple answers that apply to everyone. Today, I bring that perspective to writing about personal finance. Drawing on my analytical background, business experience, and research, I explore financial decisions, challenge conventional wisdom, and help readers understand the tradeoffs that can affect their financial well-being. To complement my own research and experience, I also weave insights from financial professionals into my articles, drawing on their expertise and real-world experience helping clients navigate financial decisions and challenges.
At medium.com/@opher-ganel, you can read more of my articles and subscribe to receive email notifications when new ones come out.