smart spending

The cost of raising a child goes up

Mom hugging her daughter
Highlights
  • The cost of shelter is the highest expense, at $69,660.
  • Child care and education together rank as the second-highest expenditure.
  • It will cost $36,210 to feed a child for 18 years, according to the USDA.

Propagating the species is an expensive proposition. Children require pretty hefty investments of money and time just to get them to age 18, to say nothing of the expensive college years.

Every year, the U.S. Department of Agriculture tallies how much families spend on children and estimates the cost of raising them to college age. The latest report found that middle-class parents of a child born in 2010 could expect to spend more than a quarter of a million dollars in the child's first 18 years.

And that cost has increased since last year's report. Expenses in nearly all of the categories surveyed increased over the past year, save for clothing, which decreased by $60 and one other notable exception. The projected cost of housing for the next 17 years fell. In the 2009 report, the cost of housing for a middle-income family over 18 years was estimated to be $70,020. For a child born in 2010, that number fell to $69,660.

Parents should start saving now because over the next 17 years, children born in 2010 will cost $36,210 for food; $30,900 for transportation; $13,200 for clothes; $18,420 for health care; $39,420 for child care and education and $19,110 for miscellaneous items.

Of course, parents' financial investment increases with income. In 2010, families with a before-tax annual income under $57,600 could expect to spend up to $206,180 over 18 years. With a before-tax income of about $100,000 per year, the total climbs to $477,100.

According to the USDA, housing, food, child care and education are the most significant costs for most families. They account for nearly two-thirds of the cost of children over the course of 18 years. The report does point out that there are households with extremely low or no expenditures for child care or education. To get an accurate gauge of the true cost to parents, the report only counts households that do spend money in those areas.

Expenses change as children age as well. While kids grow out of the need for child care, they do eat more as they get older, need more expensive clothes and incur more health care costs, increasing parents' expenditures in all of those categories throughout the years. And that's not to mention the increase in outlays for transportation once kids start driving.

Considering the tangible costs of children makes many parents uncomfortable, but there are ways to reduce expenses and keep hard-earned money in their pockets.

Want to know how to cut costs in the four most expensive areas? Read Bankrate's story, "Save money on the costs of raising children."

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