It might be time to thank your parents, as new research shows that the average cost of raising a child from birth to age 18 is now $237,482.
According to the report from LendingTree, raising a child has become increasingly more expensive every year, with households spending big on categories that continue to get pricier, including health care and college.
Recent inflation has gotten so bad that according to the report, the average annual cost of raising a child in 2021 was $21,681, a nearly 20% increase from 2016.
However, the price point that LendingTree lists in its report is only what it calls the “bare bones” of raising a child, meaning it covers only the essentials like housing, food, child care, clothing, transportation, and health insurance.
While it does include the impact and benefits of tax credits made available to parents, it does not include things like sports, after-school classes, or the soaring costs of post-secondary schooling.
Matt Schulz, the chief credit analyst for LendingTree, spoke with CBS MoneyWatch about the report, noting that the increased costs may be why some adults are opting to delay or choosing not to have children.
“It’s completely understandable that people are scared to death of how they are going to pay to raise that kid,” he said. “It’s daunting when you consider that we don’t even factor in the cost of college, for example, in these numbers.”
Schulz said that when adding the cost of college to the figure, it could more than double what parents pay to raise their children, depending on where they live and what type of school they attend.
With budgets being tighter than ever, Schulz says this could make or break the bank for many.
“Most people’s financial margin for error is pretty tiny, and a few hundred dollars here and there can be really significant when you are on a tight budget and living paycheck to paycheck,” Schulz said.
When it comes to what cuts deepest into the bank for parents, the report found that, on average, child care costs $11,752 per year.
However, location can play a huge role in this, as childcare costs in Washington, D.C., top out at around $25,000 a year and $21,000 in Massachusetts.
LendingTree found that the most expensive state to raise a child is Hawaii, where parents pay an average of $30,506 a year. The most affordable is Mississippi, where costs cap out at around $15,555.
“Even in the cheapest state, you are still taking out $15,000 a year to raise a kid, and there is no place in this country where that amount of money isn’t going to be significant to the average person,” Schulz said.