Photo by Erin, Flickr, Creative Commons: https://flic.kr/p/622yyf
The cost for a middle-income family to raise a child born last year to age 18 is $245,340, according to the US Department of Agriculture (USDA) annual report Expenditures on Children by Families. The report showed wealthier families spend more than twice as much on their children as poorer households.
Housing was the largest expense at 30%. Child care was the second-biggest cost in more affluent homes, while lower-income households spent a greater proportion on food. Costs have climbed as the need for day care has increased and a recovery in U.S. home prices adds expense.
“Improving economic times would definitely help families be able to afford to spend more on kids,” Elizabeth Peters, director of the Center on Labor, Human Services and Population at the Urban Institute in Washington, said in an interview. “And they allow them to think about starting to have a family in a situation when they wouldn’t have before.”
The study, conducted since 1960, tracks seven categories of spending, such as housing, transportation and clothing, and is used to help courts and government agencies estimate child-support costs, the USDA said. For typical two-child, two-parent families with income from $61,530 to $106,540 before tax, annual spending on each child was $12,800 to $14,970 in 2013, according to the report.
Adjusted for anticipated annual inflation of 2.4 percent, raising a child in a middle-class family would cost $304,480 through 2030, the USDA said.
“Even if the growth isn’t as high as it has been in previous years, families are still spending a lot on raising children,” said Katie Hamm, the director of early childhood policy at the Center for American Progress, a Washington-based group aligned with Democrats. “It’s really difficult for the families.”
For the complete article and report, go to Bloomberg Business Week:
