The Increasing Costs of Raising Children

By on November 5, 2019
Raising children

In 1965, there was an average of 2.44 children per family in the U.S. In 2018, that number has dropped to 1.9, going as low as 1.81 in the 1980s and again in 2007. Why are families shrinking? Is the cost of raising children really skyrocketing as many people seem to think? Are people distracted by other life goals and simply making different choices? Is it something else entirely?

Let’s take a look at the data to find out.

Fewer Kids

Millennials are not only having fewer children but also waiting longer to have them. This can be attributed to various factors.

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For one, millennials have less money in their early 20s than previous generations did. They carry more student debt and are facing high real estate prices and costs of living. As a result, many millennials are living with their parents longer, delaying marriage and, in turn, are less likely to have children in their early 20s.

On top of that, many women are more career-minded and are waiting to have kids until after they establish their careers.

Increasing Cost of Raising Children

The expense is an oft-cited reason for not having, or waiting longer, to have kids. But does it really cost more to have kids now than in the past? Let’s look at the data.

From 1960 to 2015, the overall average cost of raising a child increased by about $30,000 (adjusted for inflation). This represents a 16% increase. However, parents’ income increased by 53%. Surprisingly, in 1960 parents spent approximately 24% of their income on raising children while parents in 2015 only spent about 21%.

So why does everyone think that kids are so expensive?

While the cost of raising kids overall hasn’t risen that much, there are two keys areas where costs have skyrocketed — education (including childcare) and healthcare.

Increasing Costs of Education

Spending on education (which includes childcare) has grown a whopping 1175% since 1960. In fact, if you remove this category entirely, the overall cost of raising a child is 1.74% less in 2015 than in 1960.

The Census indicates that only about 33% of parents have their kids in non-relative care. A big reason for this may be the simple fact that costs have risen 175% just since 1990. Most families who use regular childcare opt to leave their kids with a relative, which is either less expensive or free. But this is something people have to consider before having children. There are far more single-parent households, or households where both parents work — making childcare necessary.

The bulk of this financial burden will only last a few years, right? Once the child begins school, there will be far less time that parents will need help covering thus making childcare less expensive.

Not necessarily.

Poor quality schools (and the inability to afford to live in an area with better schools) means many parents are turning to private schools. But the costs keep climbing. Since 1999, tuition for Catholic schools has gone up 53%, 45% for other religious private schools, and 43% for non-religious private schools.

Increasing Costs of Healthcare

The other big financial hit that parents take is in the realm of healthcare. Just having the child is expensive. Costs for a normal vaginal delivery can range from $3,000-$37,000. Those who need C-sections or other special care can expect to pay between $8,000-$70,000.

Paying for health insurance is also no easy task. Premiums have gone up 140% just since 1999. And even families who have insurance often have high deductibles that they must satisfy before their insurance will kick in.

When Should You Expect Grandkids?

So should you be expecting grandkids anytime soon? Obviously, this depends on your child’s choices but, statistically, you’ll have to wait longer than your parents did!

Plus, your kids will probably appreciate any help you can offer, whether it be monetary gifts or free childcare.


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The Increasing Costs of Raising Children