New parents planning their child’s first birthday party this year got some sobering news from the federal government this week. According to the U.S. Department of Agriculture, parents of a child born in 2013 should expect to spend an average of $245,340 between the child’s birth and the day he or she turns 18.
The agency bases its calculation on what it costs to provide for the basic needs of a child, including food, housing, childcare, education and other expenses. Notably, it does not take into account any expenses incurred during pregnancy, or any other costs, such as college tuition, incurred after a child’s 18th birthday.
The figure represents an increase of 1.8 percent over last year. The data is taken from the Bureau of Labor Statistics’ Consumer Expenditure Survey.
The $245,340 figure, of course, is only an average – the actual amount spent will vary significantly. One of the primary differences, according to the USDA, is related to the cost of living in the part of the country where the child is raised. In the Northeast, for example, the average amount spent in the first 18 years of a child’s life is $282,480. In more rural regions of the country, the cost can drop to an average of $193,590.
“Variations by geographic region are marked when we look at housing, for example,” said Mark Lino, an economist with the USDA’s Center for Nutrition Policy and Promotion and one of the authors. “The average cost of housing for a child up to age 18 is $87,840 for a middle-income family in the urban West, compared to $66,240 in the urban South and $70,200 in the urban Midwest. It’s interesting to note that other studies are showing that families are increasingly moving to these areas of the country with lower housing costs.”
But geography isn’t the only determinant, the USDA found. Not surprisingly, the income level of the parents and the size of the family also have a large impact on the amount of money spent per child.
Families with incomes above $106,540 will spend an average of $407,820 per child, while families earning less than $61,530 will spend an average $176,550. There are also economies of scale associated with childrearing. The USDA found that families with three or more children will spend an average of 22 percent less per child, with much of the reduction due to the ability to reuse clothing, toys, and other items, as well as the ability to buy some items in bulk.
Top Reads from The Fiscal Times:
- Banks Fight Back Against CFPB Complaint Database
- Why Your Hot Mutual Fund Probably Won’t Stay that Way
- Group Sues Obama Over Access to Information
- Personal Finance - Lifestyle
- Personal Finance - Career & Education