MONEY Kids & Money

The Most and Least Expensive Cities to Raise a Child

Where you choose to raise your child can have a huge impact on your parenting costs. Here are the cities that will run up your spending the most—and the least.

Having a child today will set you back close to a quarter million dollars by the time your offspring reaches 18, an annual study released Monday by the U.S. Department of Agriculture found. A middle-income family can expect to shell out on average $245,340 (or $304,480, when adjusted for projected inflation), with the biggest chunk of the budget going to housing, followed by child care costs.

Of course, your bottom line could be very different depending on where you live. According to data from personal finance website NerdWallet, child-rearing costs can vary by more than $340,000, based on local housing market prices and the cost of daycare (which exceeds the cost of college in 31 states).

Families living in cities in more rural areas can expect to pay the least to raise a child to adulthood, but those living in the urban Northwest and on the West Coast should expect to pay far above the average.

Here are the cities where you’ll pay the most and the least to rear your child.

Most Expensive Cities to Raise A Child

Rank City Cost of raising a child
1 New York (Manhattan), NY $540,514
2 Honolulu, HI $429,635
3 San Francisco, CA $402,112
4 New York (Brooklyn), NY $400,951
5 Hilo, HI $369,559
6 San Jose, CA $363,807
7 Orange County, CA $353,081
8 Washington, DC $342,552
9 Oakland, CA $337,477
10 Fairbanks, AK $334,562

Least Expensive Cities to Raise a Child

Rank City Cost of raising a child
1 Norman, OK $199,298
2 Harlingen, TX $199,694
3 Ashland, OH $206,793
4 Salina, KS $207,525
5 Pueblo, CO $208,155
6 Memphis, TN $208,322
7 Temple, TX $208,593
8 Richmond, IN $209,522
9 Jackson, MS $211,309
10 Hattiesburg, MS $211,451

 

Related: Why the $245,000 Cost of Raising a Child Shouldn’t Stop You From Having One

MONEY

What It Costs to Raise a Child

Baby drinking milk bottle filled with cash
Mike Kemp—Getty Images

Parents will spend nearly a quarter of a million dollars to raise a child born today to age 18. The good news: The cost isn't going up as much as in years past.

A middle-income family can expect to pay $245,340 to raise one child up to age 18, according to an annual study released today by the U.S. Department of Agriculture. When adjusted for anticipated annual inflation of 2.4% though, the total in 2032 dollars will look more like $304,480.

The cost to raise a child, excluding pregnancy and college expenses, increased by only 1.8% over last year’s estimates, representing the smallest price jump since the financial crisis.

Middle-income parents shelled out between $12,800 and $14,970 last year on their child, depending on the child’s age. But wealthier families spent more than twice what middle-income parents do, reaching $407,820 to rear a child for 18 years.

Housing remains the largest expense of any parent’s budget at 30%, unchanged from 2012, followed by child care/education (18%), and then food (16%). More affluent families spent a larger percentage of their funds on childcare costs, while those in middle or lower income households tend to spend more on food.

The amount spent also varied by region, driven largely by the cost of housing. Those living in the urban south could expect to spend $230,610 on their child, but those living in rural areas could expect to spend far less—$193,590. Families living in the urban northwest can expect to pay the most at $282,480.

Related:
Why the Cost of Raising a Child Shouldn’t Stop You From Having a Baby

MONEY Ask the Expert

How to Tell if You Can Afford to Have a Baby

Pregnancy test with dollar sign
Sarina Finkelstein (photo illustration)—William Andrew/Getty Images

Q: “I’m a 38-year-old female, who has been focused on paying down student loans, currently at about $58,000 (my initial amount was $98,000). Minimum monthly payments are about $650, but I pay about $1,000 a month. I’ve paid down my loans by living very modestly, and at the expense of saving for retirement or planning a family. But now I’m afraid that if I don’t start having children now, I won’t be able to. Can I afford to start a family?” ‑ S.C., Brooklyn, N.Y.

A: “Having a child is an exciting but scary step, and money can be a big part of that worry,” says financial planner Matt Becker, father of two and founder of the blog Mom and Dad Money. “I wouldn’t dive in without considering the financial consequences, but I also wouldn’t let them scare you off.”

Considering the average cost for a middle-income couple to raise a child for 18 years comes in at just under a quarter of a million dollars, excluding college costs, according to the U.S. Department of Agriculture, you may never feel like having a baby is in the budget. But keep in mind that four million babies are born in the U.S. each year, and most of their parents adjust just fine to the new costs.

Even with your student loan debt, starting a family should be do-able for you, says Becker. You’ll just need to make room for in your budget for baby.

First step, get a handle on how you are currently allocating your income. (Mint.com can help you track your spending.) Then consider how your income might change after the baby, says San Diego financial planner Andrew Russell, who’s also a dad of two. For example, will you or your partner stay home part time or full time? Will you take any unpaid parental leave?

Once you know what your post-baby income will look like, get a rough estimate of the new expenses you will be footing, both one-time (like maternity clothes, hospital costs, car seat, crib) and ongoing (childcare, food and diapers). Becker recommends using Babycenter’s child cost calculator.

You’ll also want to factor in the cost of basic protections like life and disability insurance, which can help ensure your child will still be provided for if a parent dies prematurely or is seriously injured. “These will add to your monthly budget, but are well worth the cost for the financial security they provide,” says Becker.

With your big student loan payments, you may find through this exercise that your future expenses with baby exceed your income. So what next? See if you qualify for any loan forgiveness programs. Also, look for any fat in your budget to cut out—particularly recurring expenses that require a one-time effort to change like switching to a cheaper cell phone plan, cutting cable, or moving to an area with less expensive rents.

“Obviously this is a big life goal with a certain time frame, and if there is not that much room to cut back on spending, then you need to minimize the amount you pay back on loans,” says Russell, who adds that it’s okay for you to dial back to the minimum payment. “The debt is too large for you to take a good chunk out of it in the next few years, so you’re going to have to move forward with it.”

While the lower payment will add to your interest over time, the federal tax deduction on student loan interest—if you qualify—will offset some of the cost. Plus, every time you and/or your partner receive pay raises and bonuses, you can funnel that additional income toward the debt.

Once you’ve figured out your post-baby budget, start living on it—even before you get pregnant, Becker advises. And put the money you would be spending into a savings account. Besides helping you see if you can handle the budget, “this helps you build up a savings cushion that will relieve a lot of the financial anxiety that can come with a growing family,” says Becker. You will need to plump that cushion before the baby’s arrival anyway: With the general rule being to have cash reserves equaling six months of living expenses, you’ll need to make sure your emergency fund now reflects all the new costs you’ll be covering.

Related:

MONEY

Help! My Wife’s Dad Puts Her Money at Risk

Did you ever want to be a personal-finance advice columnist? Well, here’s your chance.

In our “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

My father-in-law still manages my wife’s investments. She is very cautious and conservative. He is reckless, but has been able to make money. What should I do about this situation, if anything?

Got a good answer? Submit it to us in the form below. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.)

Please include your contact information so we can get in touch; if we use your advice in the magazine, we’d like to check with you first, and possibly run your picture as well.

Thanks!

To submit your own question for “Readers to the Rescue,” send an email to social@moneymail.com.

To be notified of future “Readers to the Rescue” questions and answers, find MONEY on Facebook or follow MONEY on Twitter.

MONEY holiday shopping

MONEY Experts Chat: Smart Holiday Shopping

Have you started your holiday shopping? If you’re like most people, the answer is “No.” Good. That means you still have time to plan your budget carefully, unearth the best deals, and keep yourself out of financial hot water.

Holidays and overspending go hand in hand. According to a recent report by the credit bureau TransUnion, the typical consumer charges nearly 40% more on credit cards in December than he or she does the other 11 months of the year. And that can lead to a debt hangover that takes months to recover from. Don’t let that happen to you.

Join MONEY magazine and personal finance website LearnVest on Thursday, Nov. 21 at 4 p.m. eastern time (1 p.m. pacific) to discuss smart holiday spending. Our experts will answer your questions about how to budget and save money during the holidays — and still get to enjoy the season.

The Experts:

  • Alexa von Tobel is the founder and CEO of LearnVest.com (@LearnVest), a leading personal finance website, and the author of the upcoming book Financially Fearless: The LearnVest Program for Taking Control of Your Money.
  • Diane Harris (@dianeharris) is the executive editor of MONEY. She frequently edits family money stories and has written extensively about holiday spending and kids.
  • Kristen Bellstrom () is a senior editor at MONEY, where she edits travel, technology, real estate, and spending stories.

The Topics:

During the hour-long discussion, our experts can weigh in on:

  1. Holiday Budgeting: How to figure out how much you can afford to spend, stick to that budget for the entire season, and avoid the credit card debt trap.
  2. Keeping a Lid on the Cost of Gifts: Tricks to find savings, the ideal times and places to shop, and the best ways to pay.
  3. Talking to Your Children: How do you set reasonable expectations for how much you’ll spend? And how do you talk to your family about keeping down the costs of gifts?
  4. Making the Season More Meaningful: What you can do to make the holidays feel less commercial.
  5. Holiday Travel Tips: Strategies to limit travel costs during this busy time.
  6. After the Holidays: What’s the etiquette on returns? Have you factored in the hidden costs?

How to Join:

  • Just hop onto Twitter on Thursday, Nov. 21 at 4pm EST/1 pm PST
  • Follow @MONEY, where we will be moderating the chat and sharing your great responses
  • Ask a question by including the hashtag #HolidayChat
  • Watch it all unfold by searching #HolidayChat on Twitter or TweetChat

We look forward to hearing from you via the #HolidayChat hashtag on Thursday!

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