University of Minnesota Extension
www.extension.umn.edu
612-624-1222
Menu Menu

Extension > Family > Personal Finance > Spending and Saving > The Cost of Raising Children

Spending and Saving

The Cost of Raising Children

Jean W. Bauer, Professor and Extension Specialist — Family Social Science; Kathryn D. Rettig, Professor — Family Social Science; and Seohee Son, Ph.D. Candidate — Family Social Science

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:

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.

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.

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.

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.

Cost Tables 1-7

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.

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.

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.

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.

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.

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.)

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.

Summarizing Your Costs

The majority of changes

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      

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      

Appendix 1: Case Study (52 K PDF)

Appendix 2: USDA Tables (138 K PDF)

Sources

Center for Nutrition Policy and Promotion — United States Department of Agriculture. (2013, July 11). Cost of raising a child calculator. Washington, D.C.: Center for Nutrition Policy and Promotion — United States Department of Agriculture.

Chase, R., Arnold, J., Schauben, L., & Shardlow, B. (2005). Child care use in Minnesota 2004 statewide household child care survey. St. Paul, MN: Wilder Foundation.

Lino, M. (2008). Expenditures on children by families, 2007 annual report (Miscellaneous Publication No. 1528-2007.) Washington, D.C.: Center for Nutrition Policy and Promotion — United States Department of Agriculture.

  • © 2014 Regents of the University of Minnesota. All rights reserved.
  • The University of Minnesota is an equal opportunity educator and employer. Privacy