Children don’t come cheap — cost of raising one hits US$233,610

AFP pic
AFP pic

WASHINGTON, Jan 10 — Children keep getting more expensive to raise — fashion is pricier and so are doctor visits and day care, according to the US government.

At least food’s still relatively cheap.  The cost for a middle-income family to raise a child born in 2015 to age 18 is US$233,610 (RM1.04 million), a 3 per cent increase from the previous year, the Department of Agriculture said yesterday. Housing was the largest expense, at 29 per cent of the cost. Wealthier families, who live in costlier neighbourhoods and are more likely to use day care, spend more than twice as much on their children as poorer households.

The USDA has prepared the report almost every year since 1960. It tracks seven categories of spending, including housing, transportation and clothing, and is used to help courts and government agencies estimate child-support costs. It excludes payments for college, as well as financial contributions from sources other than parents, including government aid.

The cost of child-raising has outpaced inflation because of rising health-care costs and additional money spent on clothing, which tends to fluctuate based on fashion trends. Lower projected energy costs, meanwhile, are giving parents a break on transportation expenses, notably driving.

One good piece of news for parents: This year’s increase is below the historic average annual increase of 4.3 per cent. “Those trips you made to football games, driving children around, became cheaper,” Mark Lino, the USDA economist who wrote the report, said in a telephone call with reporters. “Costs for child-care and education have really gone up among upper-income groups.”

Per-child expenses go down as families grow larger, and teenagers cost more than younger children, largely because they eat more and have greater transportation needs, Lino said.

The study defines middle-class as having before-tax income of US$59,200 to US$107,000. A family earning less than that before taxes will probably spend US$174,690 in 2015 dollars raising a child to age 18, while parents earning more than US$107,499 may pay US$372,210, according to the study.

The urban Northeast, where an affluent married couple will spend US$397,110 to raise a child, had the highest costs, the USDA said. Child costs are lowest in rural areas, where a two-parent family will spend US$146,310. Child-care and education is the second-biggest expense for middle- and higher-income households, followed by food. Nutrition ranked second for lower-income families, which are more likely to care for children at home, according to the study. Transit costs ate up a greater share of budgets for children ages 15 to 17, as many teenagers get drivers’ licenses. Child-care costs were greatest until age 6, when attending school reduces the need for daycare.

USDA’s most recent study was in 2014, before the department revised its methodology to incorporate more current data.

Housing has accounted for almost a third of costs to raise a child since the first study done in 1960. The USDA calculation takes into account the need for more living space as families grow, although it excludes potential expenses such as moving to a more expensive neighbourhood in search of better schools. In 1960, housing costs to raise a child were estimated at US$25,229 — equal to US$202,020 in 2015 dollars. Food was the second-biggest expense then, at 24 per cent, with transportation at 16 per cent.

“While housing costs have increased over time, changes in American agriculture have resulted in lower food costs,” said Angie Tagtow, executive director for the Centre for Nutrition Policy and Promotion at the USDA. Health care accounted for just 4 per cent of costs in 1960, less than half the 2015 level. Education and child care were 16 per cent of 2015 costs, up from 2 per cent in 1960, when most children were cared for at home. — Bloomberg

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