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  BU-05899     Revised 2002 To Order   

Cost of Raising Children


By* Jean W. Bauer, Professor, Family Social Science, University of Minnesota
Kathryn D. Rettig, Professor, Family Social Science, University of Minnesota

Copyright ©  2002  Regents of the University of Minnesota. All rights reserved.

Table of Contents

Introduction
How To Use Monthly Cost Tables 1-7
Summarizing Your Costs
  Tables 8 and 9
APPENDICES
  Appendix 1: Case Study
  Appendix 2: USDA Tables
REFERENCES

Introduction

How much of a family's yearly income is spent on the children? As they move through life, many families want to know this so they can:

  • plan for future costs
  • prepare for family emergencies
  • determine support needs at the time of a divorce
  • purchase adequate life insurance to provide support if a parent should die

Families with accurate spending records can easily estimate out-of-pocket child-raising costs. Many families do not keep records, yet they still have financial and/or legal need to know how much it costs to raise children.

This publication walks through a national set of figures that estimate the cost of raising children of several ages in both two-parent and one-parent families. These national figures were first prepared in 1960 and have been updated over the years.

The dollar amounts in the tables are guidelines based on estimates from the U.S. Department of Agriculture (USDA) of what families spend in each age range to raise a child from birth to age 18. The yearly amounts have been updated to the latest year (2000) using the Consumer Price Index (CPI). The monthly amounts have been determined by dividing the yearly amount by 12 and rounding to the nearest dollar. These are considered guidelines based on USDA data and not exact amounts.

The guidelines are organized into seven areas: housing, food, transportation, clothing, health care, child care and education, and miscellaneous. Information below each table will tell you what is included in the guidelines. These tables have been put into monthly amounts because that is the way most families think about costs. Also, if divorce is a consideration, parents can better compare these monthly costs to the amounts recommended for child support.

The costs for children in a household depend on many factors. The number of children in the family will influence the total cost. Some things can be shared, such as housing and transportation. Other items are exclusive to each child and have independent costs, such as health care. The income of the parents influences the choices made about the spending for children. Higher-income families spend more money on their children than do lower-income families. Families in urban areas spend about the same amount on their children as do families in rural areas. However, transportation and health care cost more in rural than in urban areas.

This publication uses the data available for comparing two-parent costs with one-parent costs for families in urban areas. There is no information available on one-parent families living in rural areas or in the Midwest. Therefore, the tables in the appendix for yearly and monthly costs for rural families and families in the Midwest are calculated only for two-parent families.

Summary Tables 8 and 9 let you compare the costs for your family. If you are using the publication to determine two-parent family costs and want to see what adding a child to the family would cost, work only with the two-parent side of Tables 1-7. Then use Table 8 to figure the cost of adding a child to your family.

If you are a parent contemplating divorce, then you will need to use both the two-parent Table 8 and the one-parent Table 9. If you have more than one child and will also have a change in income, some adjustments are needed. These adjustments are called economies of scale. An adjustment factor table is found in the appendix (Table A).

Use the adjustment factor table if you are actually involved in a divorce or like to work with numbers. Otherwise, the unadjusted tables (Tables 1-7) will give you sufficient information to assist in your decisions.

How To Use Monthly Cost Tables 1-7

Two-parent Families

You will need to know your gross income level to work on Tables 1-7.

  • If your combined gross income is less than $38,000, you are in the lower income level.
  • If your combined gross income is between $38,000 and $64,000, you are in the middle income level.
  • If your combined gross income is more than $64,000, you are in the upper income level.

In Table 1, find the line for the age of the youngest child living in your house. Now find the point where your child's age and your gross income level meet. For example, if you are in the middle income level and your child is 7 years old, the cost is $262 per month. Circle that amount. If you have two or more children, do the same for each child.

Follow this same process for the other expense categories in Tables 2-7.

One-parent Families

You will need to know your gross income level to work on Tables 1-7.

  • If your gross income is less than $38,000, you are in the lower income level.
  • If your gross income is more than $38,000 you are in the upper income level.

In Table 1, find the line for the age of the youngest child living in your house. Now find the point where your child's age and your gross income level meet. For example, if you are in the lower income level and your child is 7 years old, the cost is $217 per month. Circle that amount. If you have two or more children, do the same for each child.

Follow this same process for the other expense categories in Tables 2-7.

Table 1. Monthly Housing Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $200 $271 $430 $179 $387
3-5 198 268 428 204 411
6-8 191 262 421 217 423
9-11 173 243 403 208 415
12-14 193 263 423 208 416
15-17 155 226 385 221 428
Housing costs include rent or mortgage interest plus property taxes; maintenance, repairs, and insurance; utilities (gas, electricity, fuel, telephone, and water); household furnishings and equipment (furniture, floor coverings, and small and major appliances).

For homeowners, the mortgage principal payment is not included because it is considered savings. Thus, housing is underestimated for homes that have been lived in for a few years. Remember, the cost in the tables is for a child's portion and not the total housing cost for a family. Total housing costs are divided by the number of children in the family to get the costs for one child. Use the Adjustment Factor Table (Table A) in the appendix if you need more precise estimates.

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Table 2. Monthly Food Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $73 $88 $117 $82 $126
3-5 82 102 132 86 133
6-8 105 129 159 108 160
9-11 126 153 185 125 192
12-14 133 153 194 126 188
15-17 143 171 204 137 199

Food costs include food and nonalcoholic beverages purchased at grocery store, convenience store, or specialty stores; dining out at restaurants or fast-food establishments; school lunches.

Your costs may be more if you have a child with special health needs or a baby requiring formula.

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Table 3. Monthly Transportation Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $64 $96 $134 $60 $184
3-5 63 94 133 53 177
6-8 73 104 143 62 185
9-11 79 111 149 44 168
12-14 89 121 159 51 175
15-17 120 153 193 80 189

Transportation costs include net outlay on the purchase of new or used vehicle, including any finance charges; gas and motor oil; maintenance and repairs; insurance; public transportation.

These costs will vary depending on the number of children in the family, the number of schools the children attend; whether parents drive the children to school; and the number of activities the children are involved in that require transportation. Remember, this is only the child's portion of transportation cost and not the total family cost.

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Table 4. Monthly Clothing Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $32 $37 $48 $28 $40
3-5 31 36 48 30 42
6-8 34 40 52 35 48
9-11 38 44 57 36 49
12-14 63 74 93 60 81
15-17 56 66 85 70 93

Clothing costs include diapers; shirts, pants, dresses, suits; footwear (shoes and boots); dry cleaning, alterations, and repairs.

Coats and other outer garments are not part of the cost every year. Look at these costs carefully. The authors think the clothing costs are too low for cold climates. Additional dollars may be needed for the extra heavy clothing during severe seasons or in a cold climate.

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Table 5. Monthly Health Care Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $37 $48 $56 $18 $41
3-5 35 47 53 26 55
6-8 41 53 61 31 63
9-11 44 58 66 39 75
12-14 45 58 66 42 79
15-17 48 61 70 41 78

Health care costs include medical and dental services not covered by insurance or HMO; prescription drugs and medical supplies not covered by insurance or HMO; and health insurance premiums not paid by employer or other organization.

Special health needs or equipment are NOT in the average cost amounts.

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Table 6. Monthly Child Care and Education Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $67 $109 $165 $42 $103
3-5 75 121 180 57 128
6-8 44 76 124 52 120
9-11 27 51 86 25 70
12-14 19 38 66 32 99
15-17 32 64 116 24 81

Child care and education costs include day care tuition and supplies; babysitting; elementary and high school tuition, books, and supplies.

(See the end of the book if your family uses family day care or center-based child care.)

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Table 7. Monthly Miscellaneous Costs by Family Type and Income Level

Age of
Child 		Two-parent One-parent
Lower Middle Upper Lower Upper
0-2 $51 $79 $133 $31 $128
3-5 53 81 134 41 138
6-8 56 84 138 55 153
9-11 58 87 140 44 142
12-14 73 102 155 43 140
15-17 53 82 136 49 147

Miscellaneous costs include personal care items; entertainment; reading materials; CD's; sports equipment; toys.

Note: The original tables updated to 2000 are in Appendix Two of this publication. They list these types as husband-wife families and single-parent families. In this publication, the focus is on children, so these titles were changed. The original tables updated to 2000 are in appendix 2 of this publication.

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Summarizing Your Costs

Refer back to the numbers you circled in Tables 1-7 to fill in the estimated cost for all your children in the summary table for your current family type. If you want a comparison for a two-parent and a one-parent family, complete the two-parent part first. If you are contemplating divorce, look at the income changes in the box.

Be realistic about the projected income for the one-parent family and fill in the one-parent summary for your family.

box graphic

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Table 8. Summary for Monthly Costs, Two-parent Family

Expense
Category 		Age of
Oldest Child
[ ] 		Age of
Child 2
[ ] 		Age of
Child 3
[ ]
Housing      
Food      
Transportation      
Clothing      
Health Care      
Child Care & Education      
Miscellaneous      
MONTHLY TOTAL      

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Table 9. Summary for Monthly Costs, One-parent

Expense
Category 		Age of
Oldest Child
[ ] 		Age of
Child 2
[ ] 		Age of
Child 3
[ ]
Housing      
Food      
Transportation      
Clothing      
Health Care      
Child Care & Education      
Miscellaneous      
MONTHLY TOTAL      

Next Section: APPENDICES

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*The authors also wish to acknowledge the work of D.A. Gwinn, who contributed to the 1996 edition of this publication

Thank you to Famous Footwear for allowing us to photograph their store.

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