Every year the US Department of Agriculture updates its estimate of the cost to raise a child from birth to age 17. This year the cost increased to $233,610, or almost $14,000 per year. The increase was 3% over last year’s estimate, which is higher than the average rate of inflation.
One of the drivers of the increase in cost in 2016 was housing costs, which represent approximately one-third of the total costs. The US Department of Agriculture determines a child’s housing costs by estimating the cost of an additional bedroom. With home prices as well as rents increasing, the cost of housing has become more expensive in recent years.
After housing, child care, food, and education are the next most costly categories. Food costs make up about 18% of the cost of raising a child, while education makes up 11%. These expenditures tend to increase as a child ages. In addition, trans-portation costs increase sharply as a child ages.
On the bright side, households with multiple children realize savings with each additional child. For example, a parent can save up to 27% of the cost of raising a second child versus a single child household. Parents with three or more children save on average 24%.