Is It Too Expensive to Have Children?

The Cost of Raising a Child Has Jumped Up Almost 40 Percent in the Past Decade

by Erin Scobie on February 25, 2012

This may keep you awake at night even without the crying of a teething infant: The price of raising a child has risen by $60,000 in just 10 years. The skyrocketing costs have been a result of a variety of factors, but the current economic climate in America is certainly a major reason.

Statistics reported by the Department of Agriculture are for the cost of raising a child to the age of 18 for a middle income, two-parent household. It found that the annual price of caring for a kid hit $13,830 in 2010, up from $9,860 in 2000. One of the easiest places to point to rising costs is the grocery store. The price of gas, which of course inflated family transportation costs, also helped drive up food prices. AAA reports that Americans spend 85 percent more per gallon of fuel than they did in 2000.

The loss of jobs and forced spending cuts in many businesses included the stripping of many benefits from company healthcare plans. With decreased covered via work, the price of medical treatment for children rose by 58 percent over the past decade. This is not helped by the fact that household income has dropped during that same time period.

According to Ellen Galinsky, president of the Families and Work Institute, “Everything is more expensive and each family makes its own set of trade-offs. Many parents are working longer hours, or another job, and they are giving up time at home. It’s a complete catch-22.”

The single largest expense in raising a child is housing. However, with both parents often working, day care costs have jumped. Making matters worse, the National Association of Child Care Resource & Referral Agencies found that the yearly price of day care for two children was more expensive than the median price of rent in all 50 states.

The best way to make sure you can handle the price of child care is to start saving money. One thing that can be nice about childhood is that some expenses are predictable, in some cases by years in advance. Opening savings accounts with above-average interest rates and making deposits in them each month is a great way to help in a pinch too. “If all you can do is $50 a month, that’s fine,” says financial adviser Rita Cheng, “It’s not the amount, it’s the action that matters and sticking to it.”

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