It will cost a middle-class U.S. family about $222,360 ($286,050 adjusted for inflation) to raise a child born in 2009 to the age of 17, according to the report Expenditures on Children by Families 2009, from the U.S. Department of Agriculture (USDA).
Broken down by family income, parents with an income between $56,670 and $98,120 can expect to spend $222,360 and a family earning more than $98,120 can expect to spend $369,360.
According to the report, costs for food, shelter, and other child-raising necessities total from $11,650 to $13,530 per year, depending on the age of the child.
Housing costs are the single largest expenditure on a child, averaging $70,020 or 31 percent of the total cost over 17 years. Child care, education and food were the next two largest expenses, accounting for 17 and 16 percent of the total expenditure.
While it may seem like a large "bundle of cash" for a "bundle of joy," the $220,360 represents only a 1 percent increase from 2008, "which likely reflects the state of the economy," opines the USDA. On the other hand, the economy was pretty sound in 1960, when a middle-income family could have expected to spend $25,230 ($182,860 in 2009 dollars) to raise a child through age 17. Of course, some major modern costs, like daycare, were negligible in 1960.
The USDA report notes that where you live makes a difference, with expenses the highest for families living in the urban Northeast, followed by the urban West and urban Midwest. Families living in the urban South and rural areas have the lowest child-rearing expenses.
A Quantity Discount on Kids? One bright spot emerging from Expenditures on Children by Families 2009, is that expenses per child decrease as a family has more children. Families with three or more children spend 22 percent less per child than families with two children. "As families have more children, the children can share a bedroom, clothing and toys can be handed down to younger children, food can be purchased in larger and more economical packages, and private schools or child care centers may offer sibling discounts."
Planning on Having a Baby? The USDA's online Cost of Raising a Child Calculator will help you estimate how much it will annually cost to raise a child. This may help you plan better for overall expenses including food, or to purchase adequate life insurance.