The Cost of Raising A Child

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We all know that from a financial aspect, the expenses of raising a child are daunting.  However, do you have an idea of exactly how much it will cost? According to the 2013 United States Department of Agriculture Expenditures on Children by Families report, it will cost on average $245,340 to raise a child from birth to age 17!
Let’s break this down:

  • Annual expenses per child range from $9,130 to $10,400.  The cost per child typically increases with the child’s age.
  • A family expenditures on each child increases proportionally with the household income: corac
  • Annual expenses from highest to lowest, based off location, are the urban Northeast, followed by the urban Midwest, then urban South and lastly rural areas.
    • Compared with expenditures on each child in a two-child, expenditures of households with one child average 25 percent more on the single child and expenditures by households with three or more children average 22 percent less on each child.

Expenses associated with raising a child are broken down in the following categories:
Here are some tips for keeping these expenses at a manageable level:

  1. Housing – Ideally, your mortgage/rent payment should be at or below 31% of your monthly gross income.  If this is not the case, seek cheaper housing, apply for a modification or consider refinancing.  With concern to utility usage, consider a programmable thermostat to minimize the energy used to heat or cool your home.  Use CFL or LED lights instead of incandescent bulbs.  Contact your utility providers to set up budget billing.
  2. Food – First and foremost, stop dining out! Plan and cook your meals in bulk weekly.  By planning your meals, you will be able to better organize your trips to the grocery store.
  3. Transportation – Encourage your child to make use of transportation available to them: school bus, carpooling with friends, biking.  If you have multiple children, consider reducing expenses by having them share a vehicle.
  4. Clothing – Consider using second hand clothing stores.  For holidays, ask for gift cards to retail stores where your children enjoy shopping.  Wash clothing in cold water and line dry your clothing; it will save money on utility expenses and your clothing will last longer.
  5. Health Care – Take advantage of Health Savings accounts that your employer may provide.  HSA’s allow you to set aside funds tax-free to use towards medical expenses. Also consider using free health clinics in your area.
  6. Child Care – Look into sharing the responsibility of babysitting with other mothers in your area; rotate who is babysitting what days and times.  Set up playdates for times you work or need to run errands.  Ask family to help out to decrease the cost of babysitting.
  7. Education – Consider using the public school system instead of paying for private school.  Buy school supplies in bulk each year.  Focus closely on your child’s studies to avoid the necessity of repeating a grade or private tutoring.  The more you save, the more you can set aside for your children’s college education!
  8. Miscellaneous – It’s all about tracking your expenses!  Little things like lunch out to eat and trips to the movies can really add up.  Set limits on how much your family can spend on these “extras”.  Explore activities that are free of charge in your community.

Need help getting on track?
Worried about adjusting your budget for a larger household?  Contact Apprisen to see how our certified counselors can help you adjust your household budget.
To schedule an appointment call 1-800-355-2227 or visit our website to chat with a representative.

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