How Much Does It Cost to Raise a Child?

As a father of four, I know what a blessing children are. But I also know how expensive they can be! At PAX Financial Group, we get a lot of questions about the financial impacts of having children, raising them and saving for their futures. While there’s no manual to follow, we have put together a financial planning checklist for parents that can help them plan for some of the big expenses that come along with being a parent.

The expenses related to caring for your children seem to start immediately – think of all the baby gear and daycare costs – and seem to never stop – there are extracurricular activities and college tuition payments. Have you ever attempted to calculate the actual amount it costs to raise a child? Have you looked at how much you’ve spent and how much you will spend over the course of the years it takes to raise your children?

The U.S. Department of Agriculture estimates that it will cost an average of $233,610 to raise a child to adulthood. This doesn’t include big expenses your kids might incur later in life, like a college education or a wedding. Of course, additional kids will come with additional expenses.

If that number scares you, remember, you don’t have to pay it all at once. And when you put a financial plan in place, the figure may not be so shocking.

Where does all the money go? Let’s take a look at that parenting financial planning checklist.

Schedule a free, no-strings-attached conversation with the financial advisors at PAX Financial Group to see how we can help.


When you’re on your own, a studio may be just fine. But when you have extra bodies to care for, it’s safe to say you’re going to need more room. You may have a spare bedroom you can turn into a nursery, but not everyone does. Some new parents move to a bigger house (with a bigger mortgage or rent bill) or build an addition to their home. Utility bills often also increase – it may be small at first, but it steadily grows as your child begins to use more water and electricity.

Baby Essentials

A baby goes through six to 10 diaper changes a day, sometimes more. It’s easy to spend an average of $50 a week on diapers, formula and baby food during the first year, for a total of nearly $2,500.

Eventually, kids will stop needing formula and begin eating what you’re eating, but that may mean your grocery bill increases.

Of course, there’s also clothes, strollers, car seats, cribs and all the special things you’ll need in the first years of your child’s life.


If you thought diapers were expensive, you’ll probably be surprised to find that parents who send their children to full-time daycare spend an average of $180 per week, per child. For many families, this expense is second only to housing costs, in terms of monthly expenses.

If you have two children in full-time daycare until they reach kindergarten-age, that can run you a whopping $90,000, assuming they attend 50 weeks a year for five years. This amount can be even higher depending on where you live: Some states or regions have lower average childcare costs, but others are even higher.


The average single American shells out more than $10,000 per year in healthcare-related expenses, while it’s estimated that a family of four will spend more than $28,000 a year on healthcare costs. These costs are only expected to increase – and increase quickly.

Extra Activities

In addition to being a parent, I’m also a coach, coaching football and volleyball for the local YMCA, so I also know how expensive sports and other extracurricular activities can be. It’s not unheard of to spend $120 for soccer registration and a uniform, $60 a month for piano lessons, $300 for a pool membership, $95 for a six-week session of gymnastics, $150 a month for karate class – the costs go on. The fees for all these sports, lessons and programs can add up fast, and many of them are recurring costs.

In this day and age where expectations for children are incredibly high and competition is intense, many parents get their children involved very early, giving them every possible advantage to succeed.

If these costs become too much, but your kids are especially passionate about something, let them choose just one activity each season. This can help them give their full focus and attention to something specific yet give them time to learn, play and grow at home. It can give your bank account a breather too.

Age 18 and Beyond

If your child has plans for higher education, your financial responsibilities may not end the day they turn 18. In 2019, the average annual tuition at in-state public colleges was $10,116, while the average at private colleges was $36,801. Those numbers don’t include additional costs like room and board, textbooks and other living expenses.

You may also be saving, or thinking about saving, toward your child’s wedding, which can be a major expense even for a simple ceremony and reception. The national average for wedding costs in 2018 was $33,931, although that obviously depends on a number of factors, such as the number of guests, extravagance, location, etc.

Ways to Save

How can you cut costs when it comes to raising kids?

With regard to clothing, toys and baby gear, take advantage of large consignment sales that have been gaining popularity in recent years. Often times, you can find stuff in excellent condition at a fraction of the cost of new.

You can also buy things, like formula, diapers and wipes, in bulk. The bigger the package, the lower the per-item cost tends to be. Consider buying store brand instead of name brand – the quality is often identical, with a much smaller price tag.

If you’re trying to save on childcare expenses, shop around. Some facilities may cost less than others, and sometimes using an in-home daycare or hiring a nanny can cost less than sending kids to a daycare facility. If you have multiple kids in daycare, you might also consider one parent staying home. Depending on how your paycheck compares to daycare costs, it may make more financial sense to stay home.

If you have the opportunity to contribute to a Health Savings Account (HSA) or Flexible Savings Account (FSA), talk with a financial advisor about how this can help. These healthcare accounts can help you put money away before taxes are taken out, thereby reducing your taxable income and maximizing your healthcare spending power.

Create a Financial Plan for Raising Kids

Another way to mitigate the financial burden of raising children is to have a plan from the beginning. There are a lot of things you can’t control when it comes to having kids, but one thing you can control is your own organization and preparedness.

I hope this financial planning checklist is helpful, but a one-on-one conversation with a trusted financial advisor can take your specific situation, goals and income into consideration to create a comprehensive plan that works specifically for you and your family.

A lot of parents don’t think they’re financially ready to have kids, and many of those who think they are, might actually not be.

How can you be sure? Talk with a financial advisor about your financial readiness, and map out a realistic budget, saving and spending. Plan for the things you can expect, and prepare for the things you might not. Start thinking about paying down debt, building an emergency fund, increasing retirement savings and starting a college fund.

And remember: While the experts have determined it’ll cost you well into six-figures to raise a child, you’re not handed the bill the moment your baby is born – the expenses will be spread out over at least 18 years, so you can make a plan of how to pay for those costs in smaller chunks.

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

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