Here’s How Much it Costs to Raise a Child

Media / Blog

Here’s How Much it Costs to Raise a Child


4 Rewards Discounts You’re Not Getting

February 23, 2020

Couples consider many things when deciding to start a family, but the financial burden of raising a child is not always first on the list. I often hear from clients who are soon to be parents, "We'll figure it out!" This could be a good strategy in deciding which spouse will handle the 2am feedings, but not the smartest approach to being financially prepared.

According to the U.S. Department of Agriculture it costs a whopping $233,610 to raise a child in the United States (birth to 17 years old), and this doesn't include college education! On average we see the cost of a child around $15,000 per year.

Here are a few important questions to ask as you and your spouse plan for the arrival of your little one:

  • How much are healthcare costs for having a baby?
  • How much will childcare cost?
  • How much should we be saving for future college costs?
  1. How much are healthcare costs for having a baby?

National averages range from $5,000-$15,000 depending on a number of delivery factors. It's important to plan early and look at what your insurance covers (and doesn't cover) so there are no surprises. Here are a few things to do as you plan for out of pocket expenses:

  • Review your insurance, years in advance if possible, to ensure you don't need to change plans.
    • Ensure you know your max out of pocket spend amount.
    • Create an emergency fund to pay for costs you'll incur before you max out your responsibility to the insurance company.
    • Consider opening a Health Savings Account (HSA) to cover out of pocket medical expenses.
      • Many employers now give employees a contribution into their health savings accounts. Remember, health savings account contributions lower your W-2 income, grow tax free and are withdrawn tax free!
  • How much will childcare cost?

This will vary based on what type of childcare is a fit for your lifestyle. According to, the average weekly childcare cost for one infant child is $199 for a family care center, $211 for a day care center, $390 for an au pair and $596 for a nanny. A few things to keep in mind:

  • Some employers offer a dependent care flexible savings account (FSA). This would allow you to put away up to $5,000 per year tax free to cover approved daycare expenses.
    • Having live in help like an au pair can add up. I've seen many clients pay up to $10,000 to an agency who has vetted the au pair. In addition, if you opt to use a live in au pair don't forget about the added cost of feeding another adult and buying/maintaining another vehicle.
  • How much should we be saving for future college costs?

This is a common question and every couple's perspective is different given their personal experience and preferences. For parents who don't want their child burdened by debt, starting to save early for college is crucial. Start as soon as you can!

  • The main accounts we see clients open are 529 plans and Uniform Transfer to Minor Accounts (UTMAs) - the primary difference is tax treatment and control.
  • The amount you must save on a monthly basis depends upon whether you are saving for private or public college tuition.
    • For most state funded universities, you should be saving anywhere from $250-$500/month from the day your child is born.
    • For private schools, the cost can vary more, but from my experience, you are looking at $1,000-$1,500/month from when your child is born.

While some of these figures might appear staggering, you can't put a price on the peace of mind you'll have knowing your child is taken care of. Our parents made it work and so can you! The question is - what can you do today to help create financial freedom for your family in the future?

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


Want to Increase Bottom Line, Law Firms Should Raise Salaries

About the author

a man smiling for the camera

Brandon Hayes

Managing Director, Private CFO®

In 2011 Brandon opted to forego a long-term career in corporate America to join oXYGen Financial because he was impressed by the vision of creating a premier independent financial services firm, which strives to provide unbiased advice to the X & Y Generations.

A native of Westlake, Ohio, Brandon currently lives in Atlanta with his wife Aly, daughter Maryn, son Turner, and their black lab Pepper. He's the youngest of three children and played soccer through college at Elon University. He's an avid runner and enjoys cheering for Cleveland sports teams despite some pretty rough years.

CERTIFIED FINANCIAL PLANNER™ and MBA from Georgia State University in Entrepreneurship. Brandon holds his Series 7 (General Securities Representative), 63, Series 65 (Investment Advisors Law) and Georgia Life, Health and Variable Insurance licenses.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.