WASHINGTON—Expecting a baby? Congratulations! Better put plenty of money in your savings account.
The Department of Agriculture says the estimated cost of raising a child from birth through age 17 is $233,610, or almost $14,000 annually. That’s the average for a middle-income couple with two children. It’s a bit more expensive in urban parts of the country and less so in rural areas.
The estimate released Jan. 9 is based on 2015 numbers, so a baby born this year is likely to cost even more. It’s a 3 percent increase from the prior year—a hike higher than inflation.
Since 1960, the USDA has compiled the annual report to inform—and probably terrify—budget-preparing parents. State governments and courts also use the information to write child support and foster care guidelines. The main costs include housing, food, transportation, health care, education, clothing. and other miscellaneous expenses.
Here’s what to know about the costs of raising a child:
Up to a third of the total cost is housing, accounting for 26 to 33 percent of the total expense of raising a child. The USDA comes up with those numbers by calculating the average cost of an additional bedroom—an approach the department says is probably conservative, because it doesn’t account for those families who pay more to live in communities that have better schools or other amenities for children.
Urban Versus Rural
The cost of raising a child varies in different regions of the country. Overall, middle-income, married-couple families in the urban Northeast spent the most ($253,770), followed by those in the urban
West ($235,140) and urban South ($221,730). Those in the urban Midwest spent less ($217,020), as did those in rural areas ($193,020).
USDA estimates the annual housing cost per child in urban areas is $3,900, while it’s $2,400 in rural areas.
There were also differences depending on income. Lower-income families are expected to spend around $174,690 per child from birth through age 17; higher-income families will spend $372,210.
The average middle-income family earns between $59,200 and $107,400 per year before taxes.
Child Care, Education, and Food
After housing, the highest costs for families are child care, education, and food. For a middle-income couple with two children, food costs make up about 18 percent of the cost of raising a child. Child care and education costs make up 16 percent.
Education costs have sharply risen since 1960, when the USDA estimated that those expenses were around 2 percent of child-rearing expenses. The report says this growth is likely due to the increased number of women in the workforce, prompting the need for more child care.
The numbers don’t even include the annual cost of college, which the government estimates is $45,370 for a private college and $20,090 for a public college.
New parents may flinch at the costs of diapers and baby gear, but it’s going to get worse. While a child costs around $12,680 total through the age of 2, a teenager between 15 and 17 costs around $13,900 annually.
The USDA says food, transportation, clothing, and health care expenses all grow as a child ages. Transportation costs are highest for the oldest children, perhaps because they start driving, and child care and education costs are highest for children aged 6 and younger.
There is some good news for big families. Families with three or more children spend an average of 24 percent less per child. The USDA says that’s because children often share bedrooms in bigger families, while clothing and toys are handed down and food can be purchased in larger and more economical packages. Also, private schools and child care providers may offer sibling discounts.
By contrast, one-child households spend an average of 27 percent more on the only child.