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The Cost of Raising Children

Jean W. Bauer, Professor and Extension Specialist, Family Social Science, University of Minnesota
Kathryn D. Rettig, Professor, Family Social Science, University of Minnesota
Seohee Son, Ph.D. Candidate, Family Social Science, University of Minnesota

Revised June 2009 by the authors.

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, however, 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 (2007) 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 good and services. 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.

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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 $45,800, you are in the lower income level.
• If your combined gross income is between $45,800 and $77,100, you are in the middle income level.
• If your combined gross income is more than $77,100, 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 $323 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 $45,800, you are in the lower income level.
• If your gross income is more than $45,800 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 $268 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.

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

Age of children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$248	$334	$532	$222	$478
3-5	244	332	528	253	508
6-8	236	323	520	268	523
9-11	213	300	498	258	513
12-14	238	325	522	258	513
15-17	192	279	476	273	529

Housing costs include shelter (mortgage interest, property taxes, or rent; maintenance and repairs; and insurance), utilities (gas, electricity, fuel, telephone, and water), and house furnishings and equipment (furniture, floor coverings, major appliances, and small appliances).

It should be noted that for homeowners, housing costs do not include mortgage principal payments; such payments are considered in the Consumer Expenditure Survey to be a part of savings. So total dollars allocated to housing by homeowners are underestimated in this report.

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 cost for one child. Use the Adjustment Factors 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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$89	$107	$141	$98	$152
3-5	99	123	159	103	161
6-8	128	157	193	131	193
9-11	153	184	223	152	233
12-14	161	186	235	152	228
15-17	173	207	248	165	241

Food costs include food and nonalcoholic beverages purchased at grocery, convenience, and specialty stores, including purchases with food stamps; dining at restaurants; and household expenditures on school meals.

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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$78	$116	$163	$73	$222
3-5	75	113	159	63	213
6-8	88	126	172	74	223
9-11	95	133	179	53	203
12-14	108	145	192	62	211
15-17	144	183	232	97	228

Transportation costs include the net outlay on purchase of new and used vehicles, vehicle finance charges, gasoline and motor oil, maintenance and repairs, insurance, and public transportation.

Those 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 the 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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$28	$34	$44	$26	$37
3-5	28	33	43	28	38
6-8	31	37	48	33	44
9-11	35	40	52	33	45
12-14	58	68	86	55	74
15-17	52	61	78	64	85

Clothing costs include children’s apparel such as diapers, shirts, pants, dresses, and suits; footwear; and clothing services such as dry cleaning, alterations and repair, and storage.

Costs and other 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 climate. Additional dollars may be needed for 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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$50	$65	$75	$24	$55
3-5	48	63	72	35	73
6-8	54	71	83	42	84
9-11	59	77	88	83	102
12-14	60	78	89	56	107
15-17	64	82	93	55	106

Health care costs include medical and dental services not covered by insurance, prescription drugs and medical supplies not covered by insurance, 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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$102	$167	$252	$63	$156
3-5	114	184	274	87	195
6-8	68	118	188	78	183
9-11	41	78	132	38	107
12-14	28	57	101	48	152
15-17	48	98	177	37	123

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

(See note on page 18 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 children	Two-parent			One-parent
	Lower	Middle	Upper	Lower	Upper
0-2	$58	$91	$152	$35	$147
3-5	60	93	153	47	158
6-8	63	96	157	63	174
9-11	67	99	160	50	162
12-14	83	116	177	48	159
15-17	61	93	155	56	168

Miscellaneous costs include personal care items, entertainment, and reading materials.

Note: The original tables updated to 2007 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 to two-parent families and one-parent families. The original tables updated to 2007 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.

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 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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Appendix 1: Case Study

Download the PDF: Appendix 1 (212 K PDF)

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Appendix 2: USDA Tables

Download the PDF: Appendix 2 (252 K PDF)

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References

Chase, R., Arnold, J., Schauben, L., & Shardlow, B. (2005). Child Care Use in Minnesota 2004 Statewide Household Child Care Survey. Wilder Research. Retrieved May 21, 2009, from Child Care Use in Minnesota: 2004 Statewide Household Child Care Survey

Lino, M. (2008). Expenditures on Children by Families, 2007 Annual Report. U.S. Department of Agriculture, Center for Nutrition Policy and Promotion. Miscellaneous Publication No. 1528-2007.

Cost of Raising a Child Calculator (2009).

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