New data shows the average cost of raising a child to adulthood has exceeded $300,000, with expenses varying significantly by state. Factors such as rent, food, daycare, and health insurance were considered in the calculations. Some states saw significant increases in costs.
New data reveals that the cost of raising a child over 18 years is up again —now topping $300,000 for the first time since the company began tracking it. LendingTree researchers used various data sources to calculate the average annual costs associated with raising a small child in a two-earner household in each state and the District of Columbia.
Their calculations incorporated expenses for rent, food, infant day care, apparel, transportation and health insurance premiums. Dependent tax benefits — whether exemptions or credits — were also subtracted from expenses to create the average annual cost to raise a child by state. According to the data, the average 18-year cost of raising a child grew to $303,418 after tax exemptions and credits.That’s an average of $16,857 annually over 18 years, up 1.9% from a year ago. Despite this, annual costs in the first five years decreased slightly from $29,419 to $29,325 , driven primarily by a dip in day care costs.The analysis found that Hawaii was the most expensive state to raise a small child, with annual costs for the first five years reaching $40,342. Maryland and Massachusetts followed at $36,419 and $34,247. Conversely, annual costs were lowest in Mississippi , Alabama and South Dakota . All three states had infant day care costs below $10,000 annually, helping them rank among the cheapest states to raise a small child.Fourteen states saw the annual cost of raising a small child rise at least 10.0%, including four with growth of 20.0% or more. Annual costs rose in 39 states and the District of Columbia. Nebraska , Montana , Maine and Wisconsin all saw significant year-over-year growth in the annual cost of raising a small kid. Families in six states are projected to spend more than $300,000 raising a child over 18 years, with Hawaii leading at $412,661, followed by Alaska and Maryland . This data comes after another recent study, which found that households with 2 kids must earn more than 400K to comfortably afford child care.According to Child Care Aware of America, the average annual cost of child care for an infant and a 4-year-old across the U.S. was $28,190. RELATED: Households with 2 kids need to earn over 400K to comfortably afford child care in USFor a household to spend only 7% of its income on child care , it would need to earn an average of $402,708 a year, the data found.That’s 176.5% higher than the average income among households with two kids of $145,656.
Childcare Costs Parenting Expenses Inflation State-By-State Analysis Financial Planning
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