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Cost of Raising Children from Birth to High School Graduation Up 0.5% to $222,360

Mark Kantrowitz

May 28, 2010

The US Department of Agriculture estimates that middle-income two-parent families will spend $222,360 in 2009 dollars to raise a child born in 2009 from birth to high school graduation. The cost per child for low income families (earning less than $56,670) is $160,410 and the cost per child for upper income families (earning more than $98,120) is $369,360.

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These estimates do not include the cost of college. Based on data from the National Postsecondary Student Aid Study, the median cost of attendance at a 4-year college for a student from a middle-income family born in 2009 will be $127,693 in 2009 dollars, assuming that college costs increase by 5.7% per year (6.0% for low-income families

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and 6.2% for upper-income families). The cost for students from low-income families will be $121,997 and the cost for students from upper-income families will be $157,265. These figures are not reduced by student financial aid. Thus the overall cost of raising a child, including the cost of college, is $282,407 for low-income families, $350,053 for middle-income families and $526,625 for upper-income families. The cost of college represents about a third of the total for middle-income families (36%), about two-fifths for low-income families (43%) and about three-fifths for upper-income families (30%). If families aim to save about a third of college costs, that suggests that families should save $243 to $313 a month or $2,916 to $3,756 per year in each child’s college savings plan. For children who will enroll at a 4-year public college, the savings should be $220 a month ($2,640 per year). For children who will enroll at a 4-year non-profit college, the savings should be $417 a month ($5,004 per year). Annual child-rearing expenses ranged from $11,650 to $13,530 in 2009, increasing with the age of the child. Annual expenses are 28% to 30% lower for low income families and 66% to 71% higher for upper income families.
Per-child expenses are 25% higher in single-child households than in two-child households and 22% lower in households with three or more children. (Hand-me-downs do help save some money!) About a third of the cost of raising a child is for housing costs, about a sixth each for food and childcare/education. Transportation accounts for about one eighth of the costs, health care for one twelfth and clothing for one seventeenth. Lower income families spend a greater percentage of the costs on food and upper income families spend more on childcare and education. Child-rearing expenses are 15% higher in the urban Northeast and 22% lower in rural areas. The differences are due in part to regional differences in housing, child care and education expenses. The report, Expenditures on Children by Families, 2009, is published by the Center for Nutrition Policy and Promotion, US Department of Agriculture. The estimates are used to establish state guidelines for child support and foster case payments. The 2009 figures are 22% higher in constant dollars than in 1960 when the first report was issued.

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