Latest news with #childrearing
Globe and Mail
a day ago
- Business
- Globe and Mail
What does it cost to raise a kid? That depends on how much parents earn
If you think it costs a small fortune to raise a kid, you wouldn't be far off. In fact, it takes an eye-popping $367,148.77 to raise a child in Canada from birth to age 18, according to a federal government study. The report from Statistics Canada looked at expenses including housing, food and transportation. That number, based on 2017 data that I adjusted for inflation, doesn't include college or university costs. And it strikes terror into the heart of every parent, especially those pursuing the Financially Independent and Retired Early (FIRE) lifestyle. Here's the biggest issue with this and other studies of its kind: Kids cost more when parents' salaries increase. So yes, raising kids is expensive, but is it as expensive as the 2023 Statscan study suggests? Why it can make sense to rent when you have a kid When broken down by income, the cost of raising kids rose sharply, depending on how much parents earned. The headline $367,148.77 number is for households with medium incomes, which Statscan defined as between $83,013 to $135,790. The cost jumped significantly when salaries increased. What we see from this survey is that higher income leads to more spending, which means that parents control some of the costs involved with raising children. The $367,148.77 cost for medium-income households works out to $20,397.15 a year. The three highest categories of kid-related spending are housing, food and transportation. So if you can optimize your spending in these three categories, you can greatly reduce your child-rearing costs. Let's take a look at how this could be done. Most families are homeowners, not renters – 67 per cent compared with 33 per cent. That's because of a widespread Canadian notion that you can't raise a child in an apartment. As a kid who was raised by my parents in a tiny room I shared with my grandmother, I can assure you that your kid will survive not growing up in a three-bedroom house. When you have a newborn, the Canadian Paediatric Society recommends co-rooming for the first six months to reduce the risk of SIDS. By staying put in our one bedroom rental for the first year not only are we following safe sleep guidelines, we're saving $12,000 that we'll invest in our son's registered education savings plan (RESP). Once he's older and needs more room, we'll move to a two-bedroom apartment. But by not buying a house, our costs are predictable, and our portfolio generates enough yield – through interest and dividends – to pay for the rent increase. By renting only what you need, when you need it, you can lower your housing costs below the study's estimated inflation-adjusted overall $85,140 or $5,927.01 a year cost of housing. Keep in mind that 29 per cent of the total cost of raising a kid is from housing. One downside of renting is the moving costs, but these are dwarfed by the tens of thousands of dollars in land transfer tax you'd have to pay if you bought, in addition to all sorts of closing costs such as lawyer fees, home inspection and so on. Next up is food, at an inflation-adjusted $61,249.94 to age 18, or $3,402.77 a year on average. Feeding your kid isn't cheap but the cost is gradual. When your child is young, they'll still eat far less than what you eat. It ramps up later as they become teenagers. So far, we've found that feeding our son costs less than half of the estimated Statscan amount. In terms of cutting grocery costs, we like to use the Flashfood, Too Good To Go and Flipp apps. Flashfood lets you find groceries near their best-by date at discounts of 50 per cent or more. The key is to look for meat, milk and bread, and freeze them. Too Good To Go lets you find discounted surplus restaurant food and Flipp lets you do grocery-store price matching to get deals. The Statscan study estimates transportation costs to be an inflation-adjusted $74,607.64 from birth to 18, or $4,144.97 a year, on average. If you already own a car, the added cost is simply the gas and any additional maintenance it takes to drive them to doctor's appointments, activities, etc. In our experience, that is less than one-fifth of the Statscan number. If you live in a place with public transportation, children under 12 ride for free. The only justification for a large cost is if you had to buy a car once you had a child. Even then, you can cut that cost by getting a used vehicle or using car-sharing services. When I became a parent, I learned that kids aren't cheap, but they don't have to be crazy expensive either. We're driven into emotional spending by the baby industrial complex, which preys on our insecurities as parents. People try to keep up with the Joneses by buying things their kids don't need, just because other parents bought them. The truth is you can raise them for a little or as much as you want. Kids don't need much to be happy. They just need you. Kristy Shen and Bryce Leung retired in their 30s and are authors of the bestselling bookQuit Like a Millionaire.
Yahoo
25-05-2025
- Business
- Yahoo
Here's how much it costs to raise a child in each state
A LendingTree study looked at the average annual cost of raising a small child in each US state. Hawaii was ranked the most expensive state to raise a child in 2025. On average, parents in the US spend 22.6% of their income on child-rearing costs each year. In today's economy, luxuries like buying a mega-mansion, a sports car, or a Birkin bag might be cheaper than raising a child. In step with rising food and housing costs, parents across America are facing the financial challenges associated with having a child. A recent LendingTree study found that, on average, it costs US parents $297,674 to raise a child over 18 years, and they spend an average of 22.6% of their income on child-rearing costs each year. While the costs vary by state, one factor remains constant: the rising cost of childcare during the workday, which is often the largest expense related to having a child. "Our data from last year showed that in 45 states and DC, if you have two kids, what you pay for childcare on average exceeds [your] mortgage," said Sandra Bishop, the senior director of research for Child Care Aware of America, a national nonprofit organization focused on helping families across the country access affordable childcare. Between LendingTree's 2023 and 2025 studies, the average annual cost of childcare rose by 51.8%, from $11,752 to $17,836. Bishop says this isn't a new trend. Since Childcare Aware began tracking costs in 2000, the cost of childcare has remained "a major expense for families," she told Business Insider. On average, the price of childcare has increased every year that Childcare Aware has tracked it. "[About] 70 to 80% of what it costs to provide childcare is staff costs," Bishop said. "As the cost of living goes up, so does the cost of care." LendingTree's study, which was released in March, looked at the impact of raising a young child in categories like rent, food, and transportation by measuring the difference between costs for a two-person household and a two-person household with a child. For day care and apparel costs, researchers examined the average annual costs that families face in each state. To calculate the estimated costs of raising a child in every state, LendingTree used data from sources including the US Census Bureau's American Community Survey, the US Bureau of Labor Statistics' consumer expenditure surveys, Child Care Aware of America's Price of Care report, and the IRS, among others. Here's the annual cost of raising a young child in each state (and Washington, DC) and how each state ranks compared to the rest of the country, with 51 being the cheapest and 1 being the most expensive. Alabama Ranking: 49 (49th most expensive in the US and Washington, DC) Annual cost of raising a child: $17,870 Annual day care costs: $8,771 Food costs: $1,897 In Alabama, parents spend an average of 17.1% of their income to raise a child, which is the seventh lowest percentage among all states. The state also ranked third in the lowest day care expenses. Alaska Ranking: 18 Annual cost of raising a child: $24,921 Annual day care costs: $11,760 Food costs: $2,342 Alaska parents face some of the highest added costs in the country when factoring a child into their expenses. The state ranks third for extra rent and food costs each year at $4,620 and $2,342, respectively, and second for transportation costs at $3,462. However, health insurance premiums are lower than in other states; Alaska ranks the sixth-lowest in that category, with parents spending an additional $2,486 on average each year. Arizona Ranking: 20 Annual cost of raising a child: $24,354 Annual day care costs: $14,040 Food costs: $1,807 Parents in Arizona might see smaller additional rent and food costs when factoring in a child, with the state ranking seventh lowest in both. Still, added costs for health insurance premiums are among the highest in the nation, ranking third, with parents spending an annual average of $4,929. Arkansas Ranking: 48 Annual cost of raising a child: $18,642 Annual day care costs: $8,869 Food costs: $1,735 Arkansas ranked lowest for the added cost of children's apparel to parents' expenses. The state also ranked among the lowest five for food and childcare costs. California Ranking: 5 Annual cost of raising a child: $30,059 Annual day care costs: $19,547 Food costs: $2,023 While parenting in California comes with a high price tag in some areas, parents also experience some areas of relief compared to other states. Per the LendingTree report, there are relatively low additional rent costs when raising a child compared to other states, and higher tax credits. But parents in California face the highest apparel costs in the country, as well as the second-highest health insurance premiums. The state also has the 10-highest average day care costs, according to the report. Colorado Ranking: 10 Annual cost of raising a child: $28,922 Annual day care costs: $19,573 Food costs: $2,035 Colorado is ranked among the top 10 most expensive states to raise a child. Parents may face higher day care costs than in other states, with the state ranking ninth highest in the country. However, added transportation costs are more affordable in the state, with Colorado ranking sixth-lowest. Connecticut Ranking: 11 Annual cost of raising a child: $28,899 Annual day care costs: $17,888 Food costs: $2,111 Connecticut parents face higher costs in several areas, with the state ranking 10th highest for additional rent when factoring in a child, and eighth highest for food. However, parents also spend a lower portion of their income on raising a child each year: 17.6% on average, the eighth-lowest in the country. Delaware Ranking: 23 Annual cost of raising a child: $23,804 Annual day care costs: $14,995 Food costs: $1,951 Delaware falls near the middle of the pack for the overall costs of raising a child in the US. Additional rent costs are among the lowest compared to other states, but additional expenses for food, transportation, and day care fall in the middle of all states. District of Columbia Ranking: 9 Annual cost of raising a child: $29,186 Annual day care costs: $25,480 Food costs: $2,378 Parents in the District of Columbia saw the biggest decrease in child-rearing costs since the 2023 study. DC has the lowest added rent cost, at a negative difference of $4,284, where parents on average pay less than their childless peers. DC parents also face the lowest added transportation costs in the country at $1,919, and spend the lowest portion of income on raising a child at 14%. However, DC also has the highest day care and added health insurance premiums costs in the country, and faces the second-highest added food costs, per LendingTree. Florida Ranking: 26 Annual cost of raising a child: $23,241 Annual day care costs: $12,639 Food costs: $2,054 While Florida parents might save on transportation, as the state ranks third-lowest with parents spending an added $2,754, they also face higher health insurance premiums, ranking seventh highest in that category. Georgia Ranking: 45 Annual cost of raising a child: $19,162 Annual day care costs: $11,066 Food costs: $1,921 The study found that Georgia parents spend the second-lowest portion of their income on raising a child. Some factors that contribute to this are the comparatively low added costs for rent and health insurance premiums — the state ranked within the 10 lowest in both categories. Hawaii Ranking: 1 Annual cost of raising a child: $36,472 Annual day care costs: $22,585 Food costs: $2,481 Hawaii is the most expensive state for raising a child in 2025, leading the list by over $3,000 in total annual costs. Parents in the state face the highest added food costs in the country, the second-highest added rent costs, and the third-highest transportation and day care costs. On average, parents in the state spend 25.4% of their income on the costs of raising a child, the highest share out of all states. Idaho Ranking: 37 Annual cost of raising a child: $21,797 Annual day care costs: $10,108 Food costs: $2,040 Parents in Idaho might face some higher costs despite having the ninth-lowest childcare costs in the country. The state ranked seventh highest for both added rent and transportation costs each year, coming in at $2,364 and $3,260, respectively. Illinois Ranking: 21 Annual cost of raising a child: $24,343 Annual day care costs: $16,373 Food costs: $1,965 Illinois' added rent costs for parents are relatively low; parents spend $276 more on average each year compared to their childless peers, which is the fifth lowest amount among all states. Added transportation costs are also among the lowest in the country, ranking fourth lowest as parents spend an added $2,826 annually. Parents also spend a smaller portion of their income on raising a child than in other states, ranking ninth lowest at 17.9%. Indiana Ranking: 24 Annual cost of raising a child: $23,786 Annual day care costs: $13,736 Food costs: $1,731 Although parents in Indiana spend less on food — the state ranks fourth lowest at an average added cost of $1,731 each year — they also spend a larger share of their income on raising a child, coming in at 21.4%, the fifth-highest rate in the country. Iowa Ranking: 36 Annual cost of raising a child: $21,811 Annual day care costs: $12,168 Food costs: $1,873 Iowa parents have some of the lowest health insurance premium added costs, with the state ranking ninth lowest in the country at an average of $2,568 annually. Kansas Ranking: 19 Annual cost of raising a child: $24,528 Annual day care costs: $15,071 Food costs: $1,900 Kansas parents spend a higher portion of their income on raising a child than peers in other states, with the state ranking ninth highest nationwide. Parents spend an average of 20.8% on the added costs of raising a child. Kentucky Ranking: 46 Annual cost of raising a child: $19,149 Annual day care costs: $9,685 Food costs: $1,704 Kentucky has the lowest added cost for a child's food when compared to every other state. Parents in Kentucky also have the sixth-lowest day care expenses in the country, per LendingTree's report. Louisiana Ranking: 39 Annual cost of raising a child: $21,206 Annual day care costs: $10,101 Food costs: $1,855 While Louisiana parents have some of the lowest day care costs in the country, coming in at eighth-lowest, they also spend some of the highest percentages of their income on costs associated with raising children. They spend 20.6% of their paychecks on added costs. Maine Ranking: 32 Annual cost of raising a child: $22,061 Annual day care costs: $11,960 Food costs: $2,043 Families in Maine might see one of the bigger boosts from tax credits. The credits help parents in the state save an average of $300 each year, ranking fifth-highest in the country. Maryland Ranking: 4 Annual cost of raising a child: $31,601 Annual day care costs: $19,906 Food costs: $2,078 Ranked the fourth most expensive state to raise a child in, Maryland parents face higher costs across several categories, with the state ranking sixth highest for both day care costs and the added costs in rent, and 10th-highest for added food and health insurance premiums costs. Massachusetts Ranking: 2 Annual cost of raising a child: $33,004 Annual day care costs: $24,005 Food costs: $2,193 Ranked the most expensive state for raising a child in the continental US, Massachusetts parents face some of the highest food and childcare costs, with the state ranking fourth-highest for added food costs and second-highest for day care costs. Even with the high price tag, parents in the state don't see a big difference in their added rent prices compared to childless peers, only paying $84 more on average, according to the report. Michigan Ranking: 34 Annual cost of raising a child: $21,881 Annual day care costs: $12,667 Food costs: $1,833 When compared to other states, Michigan has the eighth-lowest added food costs associated with raising a child. Minnesota Ranking: 6 Annual cost of raising a child: $29,891 Annual day care costs: $20,129 Food costs: $2,075 Minnesota parents face some of the highest day care costs, ranking fifth highest in the country. They also spend a large portion of their income on raising children, spending an average of 21.3% of their income on the added costs of childrearing, the sixth highest share in the country. However, they also benefit from tax credits, which on average save them $343 annually, the third-highest in the country. Mississippi Ranking: 51 Annual average cost of raising a child: $16,490 Annual average day care costs: $8,186 Average food costs: $1,783 Mississippi is the cheapest state to raise a child in 2025, having the second-lowest average day care costs and falling in the top 10 for cheapest health insurance premiums, rent, transportation, and food costs. On average, Mississippi parents spend 17.9% of their income on raising a child each year. Missouri Ranking: 27 Annual cost of raising a child: $23,201 Annual day care costs: $12,907 Food costs: $1,883 Parents in Missouri have lower added health insurance premiums than parents in other states. The state ranks 10th-lowest, with parents spending an annual average of $2,649. Montana Ranking: 35 Annual cost of raising a child: $21,864 Annual day care costs: $11,700 Food costs: $1,918 Lacking sufficient childcare options for the number of children, the state of Montana is considered a "childcare desert," according to a January 2024 report by the Montana Department of Labor and Industry. On average, Montana parents spend $11,700 on childcare each year, according to the LendingTree study. Nebraska Ranking: 28 Annual cost of raising a child: $23,154 Annual day care costs: $13,000 Food costs: $1,883 Out of all metrics, rent can be the biggest expense for parents in Nebraska when compared to other states. Parents spend an extra $2,340, on average, annually on their rent when raising a child. Nevada Ranking: 29 Annual cost of raising a child: $23,063 Annual day care costs: $13,024 Food costs: $1,894 Nevada, one of the most urban states in the country, is also considered a childcare desert, according to a 2023 report by the Nevada Governor's Office of Workforce Innovation, due to the lack of options and the high demand for available centers. Parents in the state pay an average of $13,024 on daycare annually, according to the LendingTree study. New Hampshire Ranking: 12 Annual cost of raising a child: $28,338 Annual day care costs: $17,250 Food costs: $2,031 New Hampshire parents face higher housing and transportation costs than in other states, ranking fifth highest for both rent and transportation. Still, the added costs of health insurance premiums are more affordable than in other states, ranking third lowest. New Jersey Ranking: 7 Annual cost of raising a child: $29,728 Annual day care costs: $19,634 Food costs: $2,068 Parents in New Jersey may also encounter higher childcare costs, with the state ranking seventh highest among all states, but transportation costs are also more affordable, ranking 10th lowest. New Mexico Ranking: 30 Annual cost of raising a child: $22,792 Annual day care costs: $13,521 Food costs: $1,834 While New Mexico offers some of the lowest average added costs for transportation and food, parents in the state still spend a large portion of their income on raising children, with 22.8% of their paychecks going toward the added costs of raising a child, the second highest in the country. New York Ranking: 8 Annual cost of raising a child: $29,327 Annual day care costs: $19,584 Food costs: $2,141 While parents in New York face some of the highest child-rearing costs, ranking sixth and eighth highest for food and childcare, respectively, they also have the second-lowest transportation added costs, falling only behind Washington, DC. North Carolina Ranking: 42 Annual cost of raising a child: $20,818 Annual day care costs: $12,251 Food costs: $1,908 Parents in North Carolina have the most stable prices for their child-rearing expenses, the study found. Between the 2023 and 2025 studies, the cost of raising a child over the course of 18 years in the state changed the least, going from $217,182 in 2023 to $215,461 in 2025. North Dakota Ranking: 17 Annual cost of raising a child: $25,834 Annual day care costs: $10,758 Food costs: $1,875 North Dakota had the second-biggest jump in total added costs from the 2023 study, up 44%. The state also has the highest added rent costs, at $5,496, and ranks ninth for transportation, as parents spend an additional $3,237. Ohio Ranking: 40 Annual cost of raising a child: $21,186 Annual day care costs: $12,351 Food costs: $1,867 Ohio's low total costs for raising a child each year are, in part, due to the low added costs of health insurance premiums, which rank eighth lowest in the country. Oklahoma Ranking: 43 Annual cost of raising a child: $20,673 Annual day care costs: $10,065 Food costs: $1,836 Oklahoma parents enjoy the 10th and seventh lowest food and day care costs, respectively, but they also spend the 10th highest added costs on transportation, with children adding an average of $3,228 to their annual transportation expenses. Oregon Ranking: 16 Annual cost of raising a child: $26,107 Annual day care costs: $17,680 Food costs: $2,048 Oregon saw one of the biggest total cost decreases since the 2023 study. Transportation added costs are also more affordable in Oregon than in other states, with the state ranking eighth lowest at $2,915. The state also has the lowest health insurance premiums out of all states in the country, with parents spending an additional $1,978. Pennsylvania Ranking: 25 Annual cost of raising a child: $23,270 Annual day care costs: $14,483 Food costs: $1,991 Parents in Pennsylvania might spend less on additional transportation costs than in other states — the state ranks ninth-lowest in the country, as parents spend an average of $2,918. Rhode Island Ranking: 15 Annual cost of raising a child: $26,141 Annual day care costs: $16,899 Food costs: $2,127 Added food costs for parents in Rhode Island are higher than in other states — seventh highest in the country — while the added costs of transportation are more affordable than in other states, ranking fifth lowest. South Carolina Ranking: 50 Annual cost of raising a child: $17,699 Annual day care costs: $9,048 Food costs: $1,842 South Carolina parents spent the third-lowest portion of their income on child-rearing expenses, at 16.1%. They also benefit from some of the lowest childcare costs in the nation; the average cost is the fifth lowest among all the states. South Dakota Ranking: 47 Annual cost of raising a child: $18,918 Annual day care costs: $7,862 Food costs: $1,941 Average childcare costs in South Dakota are lower than in every other state, according to the study. This contributes to parents spending 16.3% of their income to raise a child, which is the fourth-lowest in the country. Still, the added transportation costs of having a child in the state ranked as the sixth highest in the nation. Tennessee Ranking: 31 Annual cost of raising a child: $22,693 Annual day care costs: $11,985 Food costs: $1,920 While parents in Tennessee have relatively low costs for most factors contributing to the total cost of raising a child, they face higher health insurance premium added costs, spending an average of $4,478 each year, the fifth highest in the country. Texas Ranking: 41 Annual cost of raising a child: $20,889 Annual day care costs: $11,024 Food costs: $1,711 Texas parents spend some of the lowest added food costs in the nation — the second lowest among all states. They also spend the sixth-lowest portion of their income on raising a child, with 17% of their paychecks going towards child-rearing costs. However, the added costs for health insurance premiums are the eighth highest in the country. Utah Ranking: 38 Annual cost of raising a child: $21,784 Annual day care costs: $11,232 Food costs: $1,849 Parents in Utah spend an average of 17% of their income on the added costs of a child, one of the lower percentages in the country. Yet transportation is one area where parents in the state might see a significant increase, with the state having the fourth-highest added costs of transportation expenses, coming in at $3,289 a year. Vermont Ranking: 13 Annual cost of raising a child: $27,690 Annual day care costs: $17,973 Food costs: $2,183 Parents in Vermont, which in 2022 was ranked the most rural state in the country according to census data, spend more on food, and also spend a greater share of their income on raising a child. The state ranked fifth-highest for added food costs, and parents spend the third-highest percentage of their income on raising their children at an average of 21.8%. However, Vermont parents also benefit from tax credits, which help them save an average of $320 annually, fourth-highest in the country. Virginia Ranking: 14 Annual cost of raising a child: $26,666 Annual day care costs: $16,397 Food costs: $2,013 Parents in Virginia face higher added costs for health insurance premiums than parents in other states, with the state ranking ninth highest at an average of $4,088. Washington Ranking: 3 Annual cost of raising a child: $32,418 Annual day care costs: $20,370 Food costs: $2,109 Parents in Washington also face higher costs in multiple areas, with the state ranking ninth-highest for added food costs and fourth-highest for childcare costs. On average, parents in the state spend 21.5% of their income on raising a child, the fourth-highest in the country. West Virginia Ranking: 44 Annual cost of raising a child: $19,957 Annual day care costs: $10,140 Food costs: $1,717 While parents in West Virginia enjoy some of the lowest added food, health insurance premium, and day care costs in the nation, they also have the eighth-highest added cost of rent and spend the eighth-highest portion of their income on raising a child, at 21%. Wisconsin Ranking: 33 Annual cost of raising a child: $21,930 Annual day care costs: $13,572 Food costs: $1,904 Wisconsin parents benefit from having some of the lowest added health insurance premium costs when raising a child, ranking second-lowest in the category and spending an average of $2,231. Wyoming Ranking: 22 Annual cost of raising a child: $24,262 Annual day care costs: $11,075 Food costs: $1,917 Wyoming saw the biggest jump in childrearing costs since LendingTree's 2023 report, with an increase of 47.9%. Parents in the state face the highest added transportation costs in the country, with an extra $3,502 on average. They also have the fourth-highest added rent costs at $3,660, and spend the seventh-highest share of their income on raising a child: 21%. Read the original article on Business Insider
