Raising a Child Will Cost More Than $252,000, ValuePenguin.com Study Finds

Rhea-AI Summary

A study from ValuePenguin.com reveals that raising children is a significant financial burden for American families, costing an average of $252,072 per child over 18 years. Annually, families spend about $14,000 per child. The most expensive areas include San Francisco and San Jose, where costs range from $297,000 to $330,000 per child. Housing is the largest expense at $3,970 per year, followed by food and childcare. The report highlights that families with multiple children spend less per child but face increased overall costs.

Positive

• Families can budget more effectively by understanding typical spending versus expected spending.
• The report offers insights into regional differences in childcare costs, helping families make informed decisions.

Negative

• COVID-19's impact on child-related spending and family incomes remains uncertain.
• Increasing housing costs further burden families, especially in high-spending metro areas.

NEW YORK, June 22, 2020 /PRNewswire/ -- Nearly every American family understands that raising children is an enormous financial commitment — but do families have a clear idea of the dollar amounts involved? A new report from ValuePenguin.com by LendingTree compared data on child-related spending to the median income of families across the country, and here are the key findings from this analysis:

• Over 18 years, total spending by two-child households came out to an average of $252,072 per child. Annually, a typical two-child family will spend $14,000 on each child on average.
• The metro areas where families spent the most money on raising children are San Francisco-Oakland-Berkeley, Calif; San Jose-Sunnyvale-Santa Clara, Calif; Urban Honolulu, Hawaii; Washington DC Metro, and the New York City Metro. Families here will spend between $297,000 to $330,000 per child ($16,500 - $18,500 annually).
• The metro areas where families spent the highest portion of their incomes on children are Greensboro-High Point, N.C; Miami-Fort Lauderdale-Pompano Beach, Fla; Deltona-Daytona Beach-Ormond Beach, Fla; El Paso, Texas and McAllen-Edinburg-Mission, TX. Families here spend between 25%-30% of their income on raising children.
• Housing costs represented the largest annual expense for children at $3,970 (28% of total spending). Food took up $2,480 (18%), followed by child care and education at $2,280 (16%).
• Each additional child increased total family spending, but also reduced the amount spent per child. Households with only one child spent 27% more per child than those with two kids, while families with three children spent 24% less.

According to Chris Moon, Insurance Product Manager at ValuePenguin.com, "It's helpful to understand that the data reflects typical spending - in other words how much parents probably spend in any event — not how much they're supposed to spend." He adds, "Getting ahead of your spending with a budget, saving for educational expenses and emergencies, and looking into options like life insurance are ways parents can manage the daunting financial challenge of raising a child."

ValuePenguin.com analysts obtained annual and total spending amounts on children from the USDA, the Bureau of Economic Analysis and the Census Bureau's American Community Survey for their analysis. These figures reflect realities from 2019 - the disruptive economic effects of the coronavirus makes it harder to know how child-related spending and family incomes will be impacted in 2020. To view the full report, visit: https://www.valuepenguin.com/how-financially-prepared-are-couples-for-children

50 Most Expensive Metros To Raise A Child
MSA	Annual spending per child	Median income	Ratio of spending vs. income
San Francisco-Oakland-Berkeley, CA	$18,429	$107,112	17%
San Jose-Sunnyvale-Santa Clara, CA	$18,121	$121,234	15%
Urban Honolulu, HI	$17,392	$87,955	20%
New York-Newark-Jersey City, NY-NJ-PA	$17,378	$77,981	22%
Washington-Arlington-Alexandria, DC-VA-MD-WV	$16,496	$102,260	16%
Oxnard-Thousand Oaks-Ventura, CA	$16,398	$86,683	19%
Los Angeles-Long Beach-Anaheim, CA	$16,398	$72,546	23%
San Diego-Chula Vista-Carlsbad, CA	$16,300	$78,626	21%
Bridgeport-Stamford-Norwalk, CT	$16,146	$95,628	17%
Boston-Cambridge-Newton, MA-NH	$15,992	$90,268	18%
Seattle-Tacoma-Bellevue, WA	$15,810	$87,363	18%
Miami-Fort Lauderdale-Pompano Beach, FL	$15,390	$57,220	27%
New Haven-Milford, CT	$15,166	$70,134	22%
Riverside-San Bernardino-Ontario, CA	$14,984	$64,463	23%
Baltimore-Columbia-Towson, MD	$14,942	$83,825	18%
Philadelphia-Camden-Wilmington, PA-NJ- DE-MD	$14,760	$71,482	21%
Denver-Aurora-Lakewood, CO	$14,690	$78,251	19%
Portland-Vancouver-Hillsboro, OR-WA	$14,536	$75,280	19%
Sacramento-Roseville-Folsom, CA	$14,508	$71,995	20%
Worcester, MA-CT	$14,466	$74,077	20%
Chicago-Naperville-Elgin, IL-IN-WI	$14,452	$72,024	20%
Portland-South Portland, ME	$14,452	$69,217	21%
Minneapolis-St. Paul-Bloomington, MN-WI	$14,368	$80,054	18%
Hartford-East Hartford-Middletown, CT	$14,298	$77,328	18%
Houston-The Woodlands-Sugar Land, TX	$14,256	$65,702	22%
Dallas-Fort Worth-Arlington, TX	$14,102	$69,458	20%
Stockton, CA	$14,102	$65,784	21%
North Port-Sarasota-Bradenton, FL	$14,074	$59,884	24%
Austin-Round Rock-Georgetown, TX	$14,032	$78,089	18%
Albany-Schenectady-Troy, NY	$13,990	$70,520	20%
Providence-Warwick, RI-MA	$13,990	$66,558	21%
Allentown-Bethlehem-Easton, PA-NJ	$13,976	$69,294	20%
Colorado Springs, CO	$13,892	$68,447	20%
Tampa-St. Petersburg-Clearwater, FL	$13,864	$55,732	25%
Salt Lake City, UT	$13,822	$74,919	18%
Orlando-Kissimmee-Sanford, FL	$13,822	$58,498	24%
Phoenix-Mesa-Chandler, AZ	$13,738	$64,145	21%
Cape Coral-Fort Myers, FL	$13,696	$57,688	24%
Rochester, NY	$13,682	$59,535	23%
Atlanta-Sandy Springs-Alpharetta, GA	$13,626	$68,974	20%
Springfield, MA	$13,626	$59,659	23%
Virginia Beach-Norfolk-Newport News, VA-NC	$13,584	$67,414	20%
Charleston-North Charleston, SC	$13,556	$64,124	21%
Las Vegas-Henderson-Paradise, NV	$13,556	$58,990	23%
Madison, WI	$13,527	$74,588	18%
Raleigh-Cary, NC	$13,527	$76,330	18%
Harrisburg-Carlisle, PA	$13,527	$66,855	20%
Syracuse, NY	$13,513	$61,556	22%
Fresno, CA	$13,513	$53,152	25%
Bakersfield, CA	$13,499	$51,797	26%

About ValuePenguin.com: ValuePenguin.com, part of LendingTree (NASDAQ: TREE), is a personal finance website that conducts in-depth research and provides objective analysis to help guide consumers to the best financial decisions. ValuePenguin focuses on value, assessing whether the return of a particular decision is worth the cost or risk of that option, and how this stacks up with the other possible choices they may have. For more information, please visit www.valuepenguin.com, like our Facebook page or follow us on Twitter @ValuePenguin.

Additional Resources: https://www.valuepenguin.com/best-child-life-insurance

Media Contact:
Divya Sangam (Ms.)
646 693 8445
Divya@lendingtreenews.com

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SOURCE ValuePenguin.com

FAQ

What is the average cost of raising a child according to ValuePenguin?

The average cost of raising a child is approximately $252,072 over 18 years.

Which metro area has the highest annual spending on children?

San Francisco-Oakland-Berkeley, CA has the highest annual spending, averaging $18,429 per child.

What percentage of income do families spend on raising children in Miami-Fort Lauderdale?

Families in Miami-Fort Lauderdale spend around 27% of their income on raising children.

What is the largest annual expense for raising children?

Housing costs represent the largest annual expense at $3,970, which is 28% of total spending.

How does having more children affect spending per child?

Households with one child spend 27% more per child than those with two kids, while families with three spend 24% less.