233,000 Dollars To Raise A Child….Without College?

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233,000 Dollars To Raise A Child….Without College?


Should I Leave My Kids A Million Dollars

February 18, 2017

So what does it take to raise a child? They used to say it took a village to raise a child. Today it can be more challenging than ever with the influence of television, internet, and music coming at our children from every angle possible. I know this as my kids are twelve, ten, and eight years old respectively. But, according to the Department Of Agriculture (www.usda.gov), it will cost a middle class family $233,000 to raise a child from birth to seventeen years old which represents slightly over $15,000 per year to your annual budget.

In the report, a middle class family is considered to be incomes between $56,670 and $98,120. Child rearing was the largest expense in raising a newborn, followed by child care/education, and then food. Whether you are a single parent family or a married couple, expense for the child increasing significantly as the age of the child increases. If you live in an upscale city or suburb, the numbers can be higher and this does not include the cost of COLLEGE! So, how do you manage these rising costs of raising a child?


  • 1 child will add about $15,000 of expense per year.
  • Don't over-home yourself before kids. This is probably the biggest tip I could offer to families considering having a child or about to have a child. There is a good chance you will go some period with just one income or one spouse will have a break in their income. Having a large home can put a huge crunch on your savings plan.


  • Cost To Add Child To Health Policy? Most families will experience several hundred dollars per month with additional health insurance cost. In many cases if you work for a small employer, you may have to pay the full cost of the health insurance as your employer may only reimburse for covering you.
  • Consider FSA for Dependent Care. If you will be using day care, check out the flexible spending account for dependent care. This could allow you to put away as much as $5,000 pre-tax for child care and have those dollars be reimbursed to you Federal and State tax-free.


  • Look to by gender neutral clothes. If you have a second or third children, you won't double up on the cost of clothes that your child wears for only a month.
  • Plan out your grocery list. It's super easy to spend lots of money on baby items you simply don't need. I recommend you sign up for Amazon Family which can save you as much as 20% on your everyday household items let along the gas to get to the grocery store.


  • Start saving early- Whether you use a 529, a UTMA, or a Coverdell IRA, the fact is your monthly savings for a college may only be a few hundred bucks per month if you start saving right when your child is born. Wait until they are they age of six or seven and watch your costs potentially double.
  • Tax credits (i.e. Child Tax Credit). Depending on your income, there are three or four tax credits you may qualify for that can lower your overall taxes.


  • Teach The 20% Rule. Whatever your children get in the way of gifts, make them save 20% of it. This can be the most powerful rule you could ever teach them. It allows you to enjoy the rest of your cash once you save the money off the top.
  • No New Cars. Don't set your teenager up for failure by buying them a $60,000 Land Rover. When they buy car number two, the dose of reality will smack them in the face like a Rocky Balboa right hook. Get them something used because they not only won't see the cost of the car, they don't even think about upkeep, insurance, or the cost of gas.


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