The Average Cost of Raising a Child Today

 Posted on July 19, 2012 in Child Support

Most new parents will tell you that raising a child is expensive, but rarely do you hear an actual dollar amount. The federal government, however, recently released its annual report laying out the specific costs of rearing a child.

The report is prepared by the U.S. Department of Agriculture, and used by states in calculating financial guidelines for child support and foster care. The report found that parents who welcomed a little bundle of joy into their families in 2011 can expect to spend almost $300,000 in the next 17 years.

Did you catch that the cost calculation stops after 17 years? That means the $300,000 doesn't even include the cost of college. That amount was also based on middle-income families earning $59,410-$102,870 before taxes. For higher earners the cost of a child was $490,830, and it was $212,370 for the lowest income households.

According to the report, it is the least expensive to raise a child in rural areas and the most expensive to rear a child in the urban northeast.

What does all that money go towards? Housing represents the biggest portion at 30 percent. Education and child-care represented 18 percent of costs, followed by food, transportation and health care.

The first annual report was compiled in 1960. Adjusted for inflation, at that time middle-income parents would have spent only about $192,000 raising a child. The biggest change compared to current figures is in child care. In 1960s this only represented two percent of child rearing expenses.

Source: The Wall Street Journal, "Cost to Raise a Child: Around $300,000 Not Including College," Phil Izzo, June 14, 2012.