The US Department of Agriculture estimates that middle-income
two-parent families will spend $221,190 in 2008 dollars to raise a
child born in 2008 from birth to high school graduation.
The cost per child for low income families (earning less than $56,870)
is $159,870 and the cost per child for upper income families (earning
more than $98,470) is $366,660.
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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 2008 will be $102,097 in 2008 dollars,
assuming that college costs increase by 5.7% per year (6.0% for
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low-income families and 6.2% for upper-income families). The cost for
students from low-income families will be $97,673 and the cost for
students from upper-income families will be $123,965. These figures
are not reduced by student financial aid. Thus the overall cost of
raising a child, including the cost of college, is $257,543 for
low-income families, $323,287 for middle-income families and $490,625
for upper-income families. The cost of college represents about a
third of the total for middle-income families (32%), about two-fifths
for low-income families (38%) and about a quarter for upper-income
families (25%). If families aim to save about a third of college
costs, that suggests that families should save $210 to $266 a month
or $2,520 to $3,192 per year in each child's college savings plan.
Annual child-rearing expenses ranged from $11,610 to $13,480 in 2008,
increasing with the age of the child. Annual expenses are 28% to 30%
lower for low income families and 66% to 70% 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 seventh 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 14% higher in the urban Northeast and 21%
lower in rural areas.
Expenditures on Children by Families
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 2008
figures are 20.5% higher in constant dollars than in 1960 when the
first report was issued.