Savvy money types know that inflation is a reality, and that it is up to them to combat inflation through their investing choices. However, many of us forget that inflation really does enter into every aspect of our lives — including the cost of raising children. The U.S. Department of Agriculture recently released a report assessing the cost of raising a child born in 2009 to the age of 17. As you might expect, those costs have risen since 2008. According the USDA, it will cost you $222,360 to raise your child from birth to age 17.

If you are interested in how much it will cost you to raise your little cherub, the USDA provides a handy calculator to estimate how much your children are costing you each year. You enter information about your child’s age, how many children you have (and their ages), your income, the region in which you live and the number of parents in your household. The calculator then provides a breakdown of estimated yearly costs.

My seven-year-old son should cost a little more than $26,000 a year, according to the USDA. In my case, it would cost another $260,000 to raise my son over the next 10 years — blowing the average out of the water. I’m not sure whether my living in the Western region is skewed by California, or whether assumptions are being made because of my income level (or both), but if it costs that much to raise my son, I’ll be very disappointed in myself.

For fun, I decided to enter in a couple more kids. If I had three kids, each would cost a little more than $16,000 per year. Apparently, your cost per child goes down when you have more of them. Your overall costs to raise your children rise, of course, but the per-child cost is reduced, thanks to hand-me-downs, shared rooms, car pooling and other ways of sharing costs out amongst children.

Saving Money on Raising a Child

Honestly, I don’t think that it should cost nearly a quarter of a million dollars to raise a child. The USDA includes budget categories housing, food, transportation, clothing, health care, child care and education, and the ambiguous “other”. I’ve added up expenses related to my son using my personal finance software (it’s easy, since I have categories for him), and they do not amount to anything approaching $26,000 a year. Some of the ways I’m saving money on raising my son include:

  • Living in a modest home.
  • Using meal planning and preparation, and other grocery shopping techniques to save money on food.
  • Driving inexpensive cars, bought used. We also try to use public transportation when feasible (our local system is pretty bad).
  • Only buying clothing on sale (preferably clearance).
  • Using a high deductible plan, combined with a HSA to save on health care costs. Also, we try to live a healthy lifestyle in order to prevent the need for frequent doctor trips. And, luckily, my son is free of chronic and/or genetic conditions.
  • Reducing my need for childcare by working from home.
  • Limiting the number of toys, games and material possessions that we have as a family. Also, while my son is involved in some activities, we plan to limit them to two or three.

We also expect that our son will have a job as a teenager, earning money so that he can help pay for some of his activities himself, hopefully teaching him to be responsible with money, while at the same time reducing direct costs to us with regard to raising him.

With some careful planning, it is probably possible to help your child live a good life, and develop good qualities — without spending hundreds of thousands of dollars. Will it cost you $222,360 to raise your child? How are saving money on the cost of raising a child?



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.