How Much Money Do You Need Per Year for a Child?

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Mother with a young baby.
Mother with a young baby. (Image: altrendo images/Stockbyte/Getty Images)

No doubt about it -- raising a child is expensive. Between birth and age 18, the average total cost for raising a child was between $160,000 and $175,000 as of 2012, according to a report by the U.S. Department of Agriculture. Of course, the average annual cost depends on how much income you have to spend, how old your child is, and even where you live.

Average Annual Spending by Income

Households that have more income tend to spend more money per year per child. As of 2012, the USDA reports that households earning less than $60,640 per year in pre-tax income spent around $10,000 per year per child. Households with annual pre-tax income of between $60,640 and $105,000 spent an average of between $12,500 and $15,000 per child each year. Households with annual pre-tax income of $105,000 or more reported the highest average annual expenditure on children, between $21,000 and $25,000.

Costs Increase With Age

Older children typically require more money per year than younger children. According to the USDA, the average annual cost for raising a child between the years of 0 and 2 was $12,710 per year as of 2012. This figure remains relatively static for a few years, averaging out at $12,720 for children ages 3 to 5 and $12,600 for children ages 6 to 8. Between the ages of 9 to 11, the average expenditure jumps to $13,450 per year. Children ages 12 to 14 cost the average household $14,180 annually, while children between the ages of 15 and 17 cost the most, at $14,700 per year. Keep in mind that these estimates apply to middle-income families. Low-income families spend an average of about $10,000 per year on children ages 15 to 17, while a high-income family will spend an average of about $25,000.

Cost Variances by Region

The USDA reports that the cost of raising a child tends to be higher in urban areas than in rural areas. As of 2012, the average annual cost of raising a child in a rural area ranged from about $10,000 to $12,000 per year in middle-income families, depending on the age of the child. Costs can be significantly higher in urban areas. Raising a child aged 15 to 17 costs the average middle-income family between $13,500 and $15,000 per year in the urban South and Midwest, about $15,500 in the urban West, and about $17,500 in the urban Northeast.

Where The Money Goes

The costs associated with raising a child tend to vary by age. For example, you'll spend a large amount of money on diapers when your child is an infant, while school-related costs will come later. The USDA reports that housing usually accounts for the greatest expenditure, about 30 percent of the total cost of raising a child. Child care and education are the second-largest expenses, at 18 percent, while food accounts for about 16 percent of total expenditures and transportation costs account for about 14 percent. On average, about 8 percent of the cost of raising a child can be attributed to health care costs, while 6 percent goes to cover clothing costs.

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