How much does it cost to raise a kid? $235K — not including college

New government data shows child-rearing an expensive proposition; pressure an added cost

Jun 14, 2012 @ 2:08 pm

Cost of raising kids
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Allowance has risen dramatically

A middle-income family may spend $234,900 to raise a child born in 2011 to the age of 18, a 3.5 percent increase in a year, according to a government report.

Expenses for child care and education, transportation and food represented the biggest jumps, the U.S. Department of Agriculture said today in a report. Adjusted for anticipated inflation, a child in a middle-class family would cost $295,560 to raise, the department said.

“It's not just the cost, it's the pressure,” said Ellen Galinsky, president of the Families and Work Institute based in New York. Competitive educational environments and an awareness of what it takes for children to succeed are prompting more spending, she said in a telephone interview.

The typical two-parent middle-income family spent $12,290 to $14,320 in 2011 on each child, the study found. Households that make less spend less, USDA researchers said. A family earning less than $59,410 a year will probably spend $169,080 in 2011 dollars to rear a child, while parents earning more than $102,870 may pay $389,670, according to the study.

“Families receive little support as they navigate” the child-rearing process, Galinsky said. The USDA report includes an online calculator to help figure out costs.

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Expenses were highest for children raised in the urban Northeast, followed by cities in the West and Midwest, the USDA said. The urban South and rural areas were the least expensive. Housing accounts for the biggest portion of expenses, averaging 30 percent over 17 years, the USDA said. Child care and education costs at 18 percent and food, at 16 percent, are the next biggest costs. The estimates don't include college expenses.

The study, published each year since 1960, helps courts and government agencies estimate child-support costs, the USDA said. In the first study, housing accounted for 31 percent of the cost to raise a child, then estimated at $25,230 -- the equivalent of $191,720 in 2011 dollars. Food was the second-biggest component, at 24 percent, with transportation at 16 percent, compared with 14 percent in 2011.

Health care was 4 percent of the cost of raising a child in 1960, half the 2011 level. Education and child care accounted for 2 percent of costs. Two-income families have raised the cost of day care and other forms of child care, while changes in agriculture have lowered food expenses, the USDA said.

“In 1960, child-care costs were negligible, mainly consisting of in-the-home babysitting,” the USDA researchers said in the report. “Since then, the labor force participation of women has greatly increased, leading to the need for more child care.”

Such demands are only increasing as families look at quality education and child care as essential for success, Galinsky said. “People want to equip their children with what they need.”

--Bloomberg News--

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