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Article This article is part of the Missouri Saves Program |
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What Does It Cost to Raise a Child?
Lucy Schrader, Building Strong Families Program Coordinator, University of Missouri Extension
What does it cost to raise a child? Parents,
educators, organizations and governments all want to
know the answer to this question. The USDA has estimated
the annual costs of raising a child since 1960 and
reports the numbers in the Expenditures on Children By
Families report.
In 1960, a moderate-income, two-parent family spent about $177,440 (in 2007 dollars) to raise a child to age 18. A similar family in 2007 spent about $204,060—a 15 percent real increase. Expenses include housing, food, transportation, clothing, health care, education/childcare, and other miscellaneous expenses (personal care items, recreation expenses, etc). Costs do not include college expenses or indirect costs (such as a parent taking work leave to raise the child).
From 1960 to 2007, housing costs increased slightly
(from 31 to 33 percent). Childcare/education increased
considerably, from 2 to 12 percent (the category did not
include childcare in 1960). Expenses on food, however,
declined as a percentage of costs (24 to 17 percent) and
in real dollars in this time period.
Based on 2007 figures, transportation expenses for
children were about 14 percent of the total amount spent
to raise a child. Clothing expenses took up about 5
percent of the total amount spent and healthcare
accounted for about 8 percent.
How can knowing the costs of raising a child be
helpful? The USDA report has three main uses. One is
education. Families can use the information to plan
spending and saving. Some schools use the information to
help teens understand how much raising a child really
costs, hoping that teens may wait to have children.
A second use is determining child support. In 2007,
26 percent of children lived with a single parent. Many
single-parent families are in poverty and child support
is one way to reduce poverty. States often consult the
Expenditures on Children By Families report in
calculating typical costs for children for state child
support guidelines.
A third purpose of the report is to determine foster
care rates. By the end of the federal fiscal year 2007,
about 496,000 children were in foster care. About half
the states use the USDA report to set the levels of
foster care rates.
USDA bases child-rearing expense estimates on the Consumer Expenditure Survey. They estimate expenses for children by age of child, household income level, number of children in the family, and geographic area. The expense estimates for the budget categories represent what is actually spent rather than some standard of what should be spent.
References:
The Cost to Raise a Child Today: Less for Food, More for Child Care and Education, USDA News Release, March 24, 2008, http://www.cnpp.usda.gov/Publications/News-Media/News3-24-08.pdf.
Expenditures on Children by Families, USDA, 2007
http://www.cnpp.usda.gov/Publications/CRC/crc2007.pdf.
50 Million Children Lived with Married Parents in
2007, U.S. Census News Release, July 28, 2008,
http://www.census.gov/Press-Release/www/releases/archives/
marital_status_living_arrangements/012437.html.
Trends in Foster Care and Adoption, US Department of Health and Human Services, November 5, 2008, http://www.acf.hhs.gov/programs/cb/stats_research/afcars/trends.htm.
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Last update: Tuesday, May 05, 2009
