To raise a child in the US, you need $240: and that doesn't include college.
Millions of Americans struggle to save money, leaving them empty-handed as they approach one of life's key financial milestones. And this is not a pension, but the birth of a child. Raising children becomes more and more expensive every year. Edition CBS News told how much money it takes to raise a child.
According to LendingTree, raising a child from birth to age 18 costs an average of $237. As with other major spending categories such as health care and college, the costs of raising children are rising: in 482, according to the financial services company. In 2021, the average annual cost of raising children was $21, which is almost 681% more than in 20.
These figures include only what LendingTree calls the "essential expenses" of raising a child, including food, housing, child care, clothing, transportation, health insurance, and the impact of tax benefits such as the Child Tax Credit . They don't include activities like sports, after-school activities, etc., not to mention the skyrocketing cost of college.
On the subject: How much does it cost to raise a child in different US cities
"Scared to Death"
Matt Schultz, chief credit analyst at LendingTree, said, "The financial impact of child-related expenses may be one reason some adults choose to delay or even forego having children."
“It's completely understandable that people are scared to death about how they're going to pay for raising a child,” he said. “It’s scary when you consider that we don’t even factor in the cost of college, for example, in these numbers.”
Schultz added, "Most people's financial margin of error is pretty small, and a few hundred dollars here and there can really go a long way if you're on a tight budget and living paycheck to paycheck."
Paying for college can double the cost of raising a child, depending on where you live and the type of institution.
The largest financial component of raising a child is childcare, which LendingTree estimates averages $11 per year. The bill is so high that some parents choose to quit their jobs because their income cannot cover the cost of child care during working hours.
Geography matters too. In some states, parents pay much more for child care: In Washington, child care costs reach $25 per year, in Massachusetts - $21 per year, which is similar to the cost of college tuition.
According to LendingTree, the most expensive state to raise a child is Hawaii, where the annual cost is $30. The most affordable state for parents is Mississippi, where one year of raising a child costs an average of $506. Nationally, parents spend approximately $15 out of every $555.
“Even in the cheapest state, it costs $15 a year to raise a child, and there is no place in the country where that amount isn’t a significant budget bust,” Schultz says.
People who are thinking about starting a family can take some financial steps to ease the impact of having a child. For example, start saving money for these expenses as early as possible and take advantage of rising interest rates by putting it into a high-yield savings account, Schultz advises.
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Also research local sources of assistance, such as community programs or nonprofit organizations that may be able to provide financial support.
For example, some states provide assistance for preschool and child care, such as Vermont, which provides a voucher for 10 hours per week of preschool to every XNUMX- and XNUMX-year-old child.
Once a child is enrolled in school, parents can use a portion of their child care funds to save for college.
“To the extent that you can change your budget a little, a few bucks from your paycheck could go toward a college fund,” Schultz said.
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