Raising a child in the U.S. is quite an expensive proposition for the average American middle-income family.
So how much does it cost to raise a child in the U.S.? A whopping $245,340! That's right! Till your child becomes an adult, that is the cost involved in bringing him/her up according to a new report.
The U.S. Department of Agriculture's (USDA) annual report [pdf] "Expenditures on Children by Families" reveals that raising a child born in 2013 could cost the parents nearly a quarter million dollars.
The annual report is based on findings of the Consumer Expenditure Survey by the government from 2012 to 2013. The estimate includes housing, food, education, childcare, as well as other related expenditures till the child turns 18 years. The report, however, does not take into account expenses associated with pregnancy or those that are incurred post the child turning 18.
The report was first issued in 1960, when the cost of raising a child till they turn 18 was $25,230, which can be equated to $198,560 in 2013. The economic climate, in tandem with inflation, has contributed to the increasing expenses.
"In today's economy, it's important to be prepared with as much information as possible when planning for the future," said Kevin Concannon, USDA Food, Nutrition and Consumer Services Under Secretary. "In addition to giving families with children an indication of expenses they might want to be prepared for, the report is a critical resource for state governments in determining child support guidelines and foster care payments."
The alarming $245,340 cost of raising a child is a jump of 1.8 percent from 2012. If this amount is adjusted for projected inflation then it increases to $304,480.
So what is the primary expense of a family that has spiked this increase? Per the report, the major expense for the average family is housing, accounting for 30 percent of the total expenditure. Child care/education and food make up the other major expenses, accounting for 18 percent and 16 percent, respectively.
The location where a family resides also plays an important role in determining the expenses of raising a child. Families who have a high income and reside in the urban Northeast areas are estimated to spend $282,480. By comparison, those in the urban South and rural pockets will likely spend $230,610 and $193,590, respectively.
"Variations by geographic region are marked when we look at housing," says Mark Lino, Ph.D, study author and CNPP economist. "It's interesting to note that other studies are showing that families are increasingly moving to these areas of the country with lower housing cost."
The report also divulges that expenses for each child reduce if a family has more children. Apparently, families that have more than three children end up spending 22 percent less on each child, when compared to a family that has two kids. The logic being that in bigger families the children can share bedrooms. The toys and clothes can be handed down to the younger child for reuse, which saves on expense. Additionally, purchasing food in bulk can be more economically viable and certain schools and child care centers offer sibling discounts as well.