Why Raising Kids Keeps Getting More Expensive

Kids Costing More

A child born to a middle-income family in 2010 will cost $226,920 to raise over the next 17 years, according to a recently released report by the U.S. Department of Agriculture (USDA). That's a two percent increase from 2009 and approximately a 40% increase in the past decade. The first year the USDA issued this report was 1960, when a child was expected to cost $25,230. In 2010, the cost of raising a single child for one year ranged from $11,880 to $13,830, depending on the child's age. Costs factored into these calculations include food, shelter, education, health care and other necessities.

Behind the Rise

The causes behind the rise are straightforward. Essentially, every expense related to raising a child has grown in the past ten years. The reasons behind changes in individual expenses varies and can be unpredictable.

For example, transportation costs rise as oil prices climb. The same change in oil costs that affects a family filling up a minivan affects the tractor-trailers that deliver food to supermarkets. Food costs have risen not only due to shipping costs, but also due to rising demand and recent floods, droughts and other natural disasters.

Health care costs, which account for eight percent of the overall cost of raising a child, are more complex. Families have been hurt by reductions in employer health plans; in some cases, employers have not only shrunk benefits, but eliminated them entirely, shifting the burden of these costs to families. In addition, the costs of health services have steadily risen, including costs from medicines to emergency room visits. These factors have contributed to a 58% rise in health care costs for families in just ten years.

All of these rising costs coincide with a weak economy and high unemployment, which can further amplify the stress on parents. Often, parents attempt to find more work in order to cover costs, only to incur dramatically higher child care costs. In fact, child care and education costs for middle-income families rose from $16,560 in 2000 to $39,420 in 2010. For many families, this presents a challenging financial dilemma, one with few easy answers.