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How Much Do Kids Cost?

Written by Nickel - 6 Comments

How Much Do Kids Cost?According to a recent report from the USDA, the average cost of raising a child from birth to age 17 for a middle income family currently stands at $222,360 (in 2009 dollars). Amongst the biggest categories contributing to this number are housing (measured as the cost to add another bedroom), child care, and education (not including college).

Geographically speaking, families in Northeastern cities face the highest costs, followed by those in the West, and then the Midwest. Those in Southern cities and rural areas spend the least.

Changes over time

Interestingly, when compared to the results from 1960 (the first year in which the USDA made such estimates), the cost of children has gone up significantly. More specifically, when expressed in 2009 dollars, the cost of raising a child from birth to age 17 in a middle income family back in 1960 was $182,857.

This 21.6% increase was largely driven by inflation-adjusted increases in housing, healthcare, child care, and education expenses. At the same time, food and transportation costs both decreased in inflation-adjusted terms. Somewhat surprisingly (at least to me), clothing expenses also decreased from 1960 to 2009.

Cheaper by the dozen?

The report also shows something that we’ve found to be true: the cost per child falls as you have more kids, with a 22% savings per child in families with three or more kids. These savings are driven by things like shared bedrooms, hand-me-down clothes and toys, bulk food purchases, sibling discounts, etc.

Real world translation

As for the numbers themselves, my sense is that we won’t spend anywhere near that $222k number despite being solidly in the middle/upper income range. Even with the 22% savings referenced above, I think we’ll end up doing far better than average.

Part of this has to do with the fact that we have four boys, which means that we can really maximize the multi-child savings. Since we only have one gender, everything gets handed down and we’re also able to double the boys up into two bedrooms. Bunk beds and double desks have been a godsend for us. :-)

At the same time, our experience is almost certainly skewed by the fact that my wife stays home with the kids. This means that we’ve faced minimal childcare expenses – pretty much just preschool for socialization. To be fair, we should probably consider my wife’s lack of a salary as a child-rearing expense, but I haven’t tracked the numbers to that degree.

Anyway… No matter how you slice it, kids are expensive.

Source: USDA via The Juggler

Published on July 7th, 2010
Modified on July 13th, 2010 - 6 Comments
Filed under: Miscellany

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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6 Responses to “How Much Do Kids Cost?”

  1. 1
    Jay Says:

    ..and worth every penny!

  2. 2
    googgu Says:

    We would have spent over $50K in childcare for each of our two children before they start elementary…they are worth every penny.

  3. 3
    David Says:

    A kid actually costs over half a million dollars. A kid costs $500 per month or $6,000 a year if you feed it rice and beans everyday. So instead of feeding the kid 3 times a day times 365 days a year times 20 years you could have used that same $500 a month and invested it in good stocks @ 12 percent compounded daily and after 20 years you will have over $500,000.

    If you doubt the math then check out this savings calculator >>

    So the question becomes would you use protection to get over $500,000 AKA half a million dollars?

  4. 4
    Rosa Says:

    We’ve already spent close to $25K on daycare costs. Other than that the kid is pretty much free – he doesn’t eat much and his clothes are like $50/season. Plus, since we never have free time anymore he’s saved us a TON of money we would have spent traveling, buying art, or taking classes :P

    You shouldn’t shrug off your wife’s lost salary, though. The thing about salary isn’t just the lost opportunity costs from the years your wife isn’t working – there’s a cost to the higher uncertainty of being a one-income family, and there’s the future cost, if she ever goes back to work, of her salary in that future year being much lower.

  5. 5
    Ben Says:

    IDK where you are getting $500 a month for rice and beans, David, because rice and beans should cost something like $150, if that.

  6. 6
    David Says:

    @Ben – I meant $500 a month for housing, clothing, transportation etcc

    Here is the proof


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