Raising a Kid Today Costs an Eye-Popping Amount

The cost of raising a kid up until college in the US has reached nearly $240,000, and that amount includes just the basics, according to CBS News. They broke down research from Lending Tree that found parenting costs from birth to age 18 averaged $237,482. These expenses covered "bare bones" necessities like food, housing, child care, clothing, transportation, and health insurance—but excluded enrichment activities such as sports, arts, and after school programming. Child care was the most substantial component, averaging nearly $12K per year—an amount that's led some parents to leave the workforce, or even decide not to have children at all.

"It's completely understandable that people are scared to death of how they are going to pay to raise that kid," LendingTree's chief credit analyst told CBS MoneyWatch. "It's daunting when you consider that we don't even factor in the cost of college, for example, in these numbers." To prepare financially, people who wish to start a family should save early, consider high-yield savings accounts, explore government and nonprofit assistance programs, and allocate funds for future educational expenses, such as a 529 plan. Depending on where a student attends college, tuition could double the costs of raising a child, so saving as children leave child care and enter public school is one way to get ahead, CBS noted.

Lending Tree broke down how costs add up depending on where you live. Hawaii tops the list as the most expensive state to raise a child, mainly due to parents paying an extra $4,000 annually in rent compared to those without children, and an additional $4,000 per year on health insurance premiums. The District of Columbia and Washington state follow closely behind, with DC residents paying an average of $25,523 annually for infant day care alone. In these top three expensive locales, the cost of raising a child surpasses $28,000 per year. Meanwhile, in Mississippi, Alabama, and Arkansas—the states with the lowest costs—expenses were less than half of that in more costly states, but parents still paid an extra $1,000 in rent yearly than homes without children. (Nationally, child poverty rates have jumped as pandemic benefits end.)