Where is the best place to raise a family these days? Whether you already have children or are planning a family in the future, one of the most shocking parts of being a parent is learning about the true cost of raising children. The average cost of raising a child in the United States from birth to age 17 is currently over $286,000 — for one child. Factor in other headaches parents currently face, including rampant inflation, rapidly rising childcare costs, ongoing baby formula shortages and a potential recession, and some parents are taking drastic measures to try to save money as the new school year starts, including relocation. As staggering as the average cost to raise a child is, you might be able to find a little relief depending on where you live. Bankrate took a deep dive to determine where you might want to go — and where you might want to avoid — to raise your kids and save your budget.
- The median average household income in 2020 (the latest data available) was $67,521, a 2.9% decrease from an average of $69,250 in 2019. (Census.gov)
- The average cost of childcare in the U.S. is $10,174 per child per year, which represents about 10% of median household income for two parents and over 35% of household income for single parents. (ChildCare Aware of America)
- A survey among parents conducted by Care.com showed 51% of parents are spending at least 20% of their median household income for childcare. (Care.com)
- While the average cost of a center-based childcare is over $10,000 per year, home-based childcare averages around $8,000 per year. (Treasury Department)
- Total costs of being pregnant, the process of childbirth and postpartum care averaged $18,865 each year from 2018 to 2020. (Kaiser Family Foundation)
- Healthcare premiums are not immune to higher costs either. The average cost of healthcare premiums for a family was $1,152 per month in 2020 while the average deductible amount for a family was $8,439 for the year. (eHealth)
- The average cost of baby formula is $400 to $800 per month for babies who are exclusively formula-fed. This number increases if it is a specialty formula or ready-to-feed. (Babycenter.com)
- Babies average using around 6-12 diapers per day, which translates to an average annual household cost of $986 for disposable diapers. (Healthline)
- The average cost of a private education is $12,350 per child per year. The average cost of elementary school education is $7,630, while $16,040 is the average cost of private secondary education. (Education Data Initiative)
- The average price of a home sale was $525,000 in Q2 2022 across the U.S. ( Louis Fed Economic Data)
- In June 2022, an existing single-family home was $414,200, with a qualifying household income of $88,416 needed. (National Association of Realtors, NAR)
- Both apartment rentals and home prices have hit their highest levels, with over 12 months of consecutive increases. (The State of the Nation’s Housing 2022)
- The median mortgage payment for new loan applicants is now $1,889 per month as of April 2022. (Bankrate)
- 2019 Census Data showed the median household mortgage payment was $1,200 per month. (Bankrate)
Worst places to raise a family, ranked
To find the worst places to raise a family, Bankrate reviewed several key metrics. We first focused on the affordability of an area, which is a combination of the annual gross domestic product, or GDP, per state and the typical home value in the state, since income and housing are key data points for affordability.
Safety is another key aspect, so the latest crime rate data from the Federal Bureau of Investigation(FBI) was analyzed. Lastly, education was also examined, including the public high school graduation rates. All fifty states and the District of Columbia were included in the data. Based on this information, the top five worst states for raising a family are:
District of Columbia
Though not technically a state, Washington D.C. ranked the worst on our list of places to raise a family. The typical home value in the District of Columbia is one of the highest in the country, currently averaging well over $600,000. It is second only to Hawaii for housing home values, which puts housing out of reach for many families. Washington D.C. also has the lowest public high school graduation rates, based on the latest data available from 2019. The FBI raw crime data indicates the city struggles with violent crime too.
Although Oregon offers a wide range of outdoor activities for families, from hiking and camping to biking and skiing, Oregon ranks as the second worst state to raise a family on our list due to the low high school graduation rate. In 2019, the graduation rate was around 80%, which is one of the lowest in the U.S. Crime was also a noted issue, with over 127,000 violent crimes across the state recorded by the FBI in 2019.
Despite the abundance of natural beauty, the state of Washington makes our top five worst spots to raise a family for several reasons, but especially the crime rate data provided by the FBI. Washington recorded over 226,000 violent crimes in 2019, one of the highest crime rates in the country.
Arizona may be known for warm weather and beautiful landscapes, but like Oregon, Arizona struggles with the public high school graduation rate. The latest data from 2019 shows a high school graduation rate of 77.9%, making it one of the lowest in the country.
Colorado has numerous positive qualities, but the high housing costs, lower high school graduation rates and high crime rate bumps it up to one of the worst places to raise a family on our list. The average home value is around $404,000, putting homeownership out of reach for many families, and the high school graduation rate is one of the lowest in the country at 81.8%.
Best places to raise a family
There is no doubt raising children is a tough job, but these states offer advantages to parents, based on data used in the Bankrate analysis. The same analysis used to determine the Top 5 Worst Places to raise a family was also used to find the best places to raise a family.
The state of Iowa tops the list as the best place to raise a family due to having the highest high school graduation rate and lower overall violent crimes. The average home value lands around $151,000, which could make it a more affordable and attainable option for many families.
West Virginia sits towards the top of our list because of its more affordable housing opportunities. The average home value is around $110,000, which could open up greater opportunities for homeownership to a wider range of incomes. It also has one of the lowest violent crime rates reported in the U.S. and one of the highest high school graduation rates in the country too, at 91.3%.
Kentucky offers a variety of opportunities for families, including boasting a strong state GDP led by various industries. Housing may be more affordable in the Bluegrass state, too, with the average home value slightly over $146,000. To top it off, Kentucky has lower violent crime rates and one of the highest high school graduation rates, at 90.6%.
Alabama is another state with potential affordable housing options, with the average home value around $146,000. Alabama has the highest high school graduation among all 50 states and Washington D.C., at 91.7%. Lower crime rates and a strong state GDP indicate the state may be poised for further economic growth.
Wisconsin excels in our study, with a higher-than-average high school graduation rate, sitting at 90.1%. Although the crime data is slightly higher in Wisconsin compared to the other states in our top five, the average home value is around $197,000, which means it could be a more affordable option for many families.
Resources for families
While challenges for today’s families may seem overwhelming at times, the good news is, there are resources available to help families overcome some of the obstacles faced. For those who might be considering relocating to a new city or state to improve their circumstances for their families, consider the following as you contemplate your possible next move.
- Consider housing affordability. The bottom line is that affordable housing for your family that doesn’t strain your household budget could be one of the biggest factors for choosing a new place to live. While our top picks for the best states to raise a family may help guide your decision, you can also use tools such as a cost of living calculator to show you how affordable an area could be for your family.
- Research crime statistics. The safety crime data from the FBI provides the objective information about crime in an area, including violent crime ranging from murder and armed robbery to aggravated assault. There are also likely to be more localized resources that report on crime in an area you’re considering living in as well.
- Look into employment opportunities. While more people are working from home, which provides greater mobility, understanding what jobs are available in the area you’re considering moving to is still important. Look for states with greater employment opportunities in case your current work situation changes. Resources such as USAJobs can show you what opportunities are available in each state.
- Consider the quality of education for your children. Although private school may be the best option for some, it’s not right for everybody. Spend some time learning about the quality of public education in any area you want to move your family to and ensure your children will have access to good schools. If you want to research the quality of education in the state or city you are considering relocating to, resources such as GreatSchools.com can help you get started.
- Consider the general cost of living. Housing isn’t the only expense for your family, and you’ll have certain things you need to buy to get settled in, as well as the expenses of daily life, such as food, gas and taxes. Another important component to protect your finances will be finding quality home insurance, so consider spending some time shopping around and comparing home insurance companies available in your area to find the best coverage and rate for your family’s needs.
To identify the best and worst states for raising a family, Bankrate examined all 50 states and the District of Columbia by analyzing objective data on affordability, crime, education opportunities and how the state is growing from an economic standpoint. The following statistics were used and each state was assigned a score based on how it performed with each data set. The higher the score, the lower the ranking.
- Each year, the Federal Bureau of Investigation (FBI) releases crime rate information. The 2019 information, which is the most recent data available, is broken down by state, metropolitan area, areas outside the metropolitan lines and nonmetropolitan counties.
- The retention/graduation rate for each public high school was examined by state by the National Center for Education Statistics and factored into our rankings.
- State Gross Domestic Product. The 2021 GDP of each state was reviewed. This is the broadest economic indicator and provides a snapshot of the industries that have the biggest economic impact on the state.
- Home values. Typical home values were measured using research provided by Zillow.
Based on these data sets, each state was analyzed and given a score between one and 51 for each data point, with higher scores indicating poorer performance for each metric. Scores across each data set were added up to determine a final score for each state. The states with the highest scores were determined to be the worst states to raise a family, while states with the lowest scores were determined to be the best.