Parents could spend $26,000 to care for one kid this year
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- Business Insider estimated the cost to care for one child in the US in 2024 will be at least $25,714.
- That's a 41.5% increase since 2016 and costs will likely continue to go up this year.
- The two main drivers for the jump in costs are childcare, transportation, and food.
If you're wondering how much of your salary will go toward raising your kid this year — or how much you'll save by not having one — we did the math for you.
Accounting for expenses like rent, food, apparel, transportation, childcare, and health insurance premiums, Business Insider estimated it will cost about $25,714 to care for a small child this year.
To calculate this number, Business Insider started with a LendingTree analysis of the average annual essential costs for childrearing, which used data from 2021 — the latest year for which complete data was available.
Then to get a rough estimate for where those costs are going, we adjusted them to account for the last two years of consumer price inflation to get a figure for 2023. Inflation has moderated a lot from a high of 8.9% year-over-year in June 2022 and is back down to 3.1% as of November 2023, but we did not presume to predict what will happen in 2024.
The $25,714 figure estimated for 2023 is a 19% increase from LendingTree's estimates for 2021 and a 42% jump from 2016. And depending on what inflation looks like over the next year, it could be even more.
The estimate also factors in federal tax credits parents receive for having dependents. In 2021, LendingTree estimates parents were saving $3,600 annually on their taxes, an increase of $2,600 from 2016. To determine this national average, LendingTree assumes parents' tax returns were filed jointly with a total income of $85,028, the national median income among families in 2021. Notably, 2021 featured the more generous Child Tax Credit passed as part of the American Rescue Plan. We instead factored in the current $2,000 per child CTC for 2023.
If you carry this cost forward until a baby born this year is the age of 18, that's a total of $462,852 in today's dollars.
It's not just childcare that's making costs balloon
The main expenses for raising a kid are childcare, transportation, and food, according to LendingTree's calculation.
Since the pandemic, we've seen the prices of gas and food rise dramatically due to supply chain disruptions, wars, and climate crises. Parents could expect to spend $3,567 on food last year, a 45% increase from 2016.
Transportation can also leave a dent in parents' wallets, totaling $6,588 last year, a 312% increase from 2016's estimate of $1,598. A gallon of gas was $2.58 in December 2019 and $3.12 in December 2023, according to AAA.
"The economy is still finding its footing after the chaos wreaked by COVID-19 — and impacting parents' wallets along the way (especially single parents)," wrote Jamie Cattanach, the author of the LendingTree analysis.
In addition, family health insurance premiums have gone up 10% since 2016 compared to a single person to an annual average of $3,166, according to our calculations based on LendingTree and KFF numbers.
But the largest cost of raising a kid, by far, is childcare, which we estimated to be an average annual cost of $12,883 — 17% higher than in 2016.
The childcare crisis came to a tipping point in September 2023, when nearly $24 billion in federal funds that helped keep childcare services afloat expired. Much of the funding was used to increase pay for employees at childcare centers and without it, childcare providers will either have to raise prices and hope their customers don't bail or cut their employees' pay and hope they don't quit.
The rising costs of raising a child could be one of the factors deterring US adults from creating families. About 44% of non-parents between the ages of 18 and 49 said they weren't likely to have kids in the future, up 7% from 2018, according to a Pew Research Center study that was published in November.
Are you a parent balancing the costs of raising a child and willing to provide details about your expenses? If so, reach out to this editor at ecanal@insider.com.
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