Middle-income parents can expect to spend nearly a quarter of a million dollars on housing, food, transportation and other necessities to raise a child born in 2012 to the age of 17, according to the Expenditures on Children by Families report released by the U.S. Department of Agriculture (USDA) earlier this month. This represents an increase of 2.6 percent from last year’s figure. The average annual increase since 1960 has been 4.4 percent.
The report shows that the cost of raising a child increases with household income levels. The annual amount spent per child by families with pre-tax income less than $60,640 was approximately $9,000 to $10,000; households with incomes more than $105,000 annually spent about $21,000 to $25,000 per child each year. Households in the middle-income range had annual child-rearing expenses of approximately $13,000 to $15,000.
Geographic location also affects child-rearing costs. The most expensive place to raise children is in urban areas of the Northeast, followed by the urban Midwest and West. The urban South and rural areas across the country were less expensive.
Housing, including utilities, was the biggest single expense accounting for 30 to 33percent of the cost of raising a child. The report shows that children become more expensive as they get older, although the report does not include college expenses. The expense per child decreases with the number of children.
Consumers may calculate the cost of raising a child by accessing the USDA online calculator and entering information about income, family composition and location in the United States.
The report data comes from the federal government’s annual Consumer Expenditure Survey, a comprehensive survey of American consumer’s income and expenditures. Information is collected by the Department of Labor and the Census bureau through quarterly interviews and consumer diaries.