BREAKING

Raising a child costs nearly $240,000, excluding college: US

By Al Mayadeen English
Source: CBS
16 Sep 2023 11:24

The rising cost of raising a child in the United States is causing financial strain for many families and may be contributing to decisions to delay or forgo parenthood.

Students attending high school in the US (AFP via Getty Images)

A new report by CBS revealed that many Americans face challenges in saving money, leaving them financially unprepared to raise a child.

Raising a child till they're 18 now averages $237,482 in expenses, as per new research by LendingTree.

Like other major household expenditures, such as healthcare and education, the cost of child-rearing is rising in the US. According to the financial firm, the average annual cost of raising a child was $21,681 in 2021, a nearly 20% increase from 2016.

The mentioned dollar amounts cover only the essential expenses outlined by LendingTree for child-rearing. These expenses encompass the basics like food, housing, childcare, clothing, transportation, and health insurance. They also take into account the influence of tax benefits like the Child Tax Credit. However, these figures do not factor in additional enriching activities such as sports, after-school programs, and similar expenses, not to mention the escalating costs associated with attending college.

A potential factor contributing to adults delaying or abstaining from having children is the economic burden associated with child-related expenses, as pointed out by Matt Schulz, the Chief Credit Analyst at LendingTree, during an interview with CBS MoneyWatch.

"It's completely understandable that people are scared to death of how they intend to pay to raise that kid," he said.

"It's daunting when you consider that we don't even factor in the cost of college, for example, in these numbers," he added.

The most significant financial aspect of raising a child is childcare, which LendingTree calculates at an average of $11,752 per year. The cost is substantial enough that some parents decide to exit the workforce as their income may not sufficiently cover childcare expenses.

Location also plays a role in these costs. In certain states, parents pay significantly more for childcare, such as in Washington, D.C., where it exceeds $25,000 annually, and in Massachusetts, where it reaches $21,000 per year, equivalent to college tuition at many institutions.

It is worth noting that Inflation and rising prices in the United States have become prominent economic concerns in recent times. Inflation, the general increase in the prices of goods and services, has picked up pace, affecting the purchasing power of consumers.