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Every so often, the stories will appear explaining how much it costs to raise a child in the US. The figure tends to fluctuate, but the average usually settles around the $200,000 mark; the last published figure was a huge $233,610, an amount so high it could put couples off starting a family.

Cost to Raise a Child

When the numbers are published, they tend to generate a huge amount of debate. Who can afford to have children when the cost is so high? How do people on lower-incomes afford it? Is it too expensive to raise children these days, or is that figure a good investment in the future of your kids? The debates rage on morning TV shows, blogs, and internet forums– but they tend to overlook a few facts.

Before the updated figures are published for this year, it’s worth keeping a few important things in mind about the eye-wateringly high figure that sounds so very terrifying, but actually has a few flaws…

The “average” is just that

The headline-grabbing average number is the figure that is usually dissected in discussions, but averages have a tendency to be misleading. The true figures vary somewhat:

  • Lower-income families will spend around $174,000 per child
  • Higher-income families will spend around $372,000 per child

So that “average” might not be applicable to the vast majority of circumstances. This is an important distinction, as many couples with a poor financial history may see the headline figure and panic, thinking that the only way they can have children is to opt for bad credit personal loans to try and meet the cost. This isn’t necessarily the case.

The “lump sum” problem

Whenever this amount is published, it’s always the “lump sum” amount– the total cost of raising a child up to the age of 17. This isn’t necessarily a particularly useful figure; it’s not as if couples need to arrange their finances to find a quarter of a million dollars before they even think of conception.

The lump sum amount actually breaks down into a yearly spend of around $13,500. That still sounds worryingly high, but any household expense sounds high if you lump the entire amount together. For example, the average gross rent in the US works out at around $11,000 per year, which helps to put the cost of raising a child into perspective– and that’s just using the “average” figure.

The multiple children question

Finally, it’s worth considering whether this amount applies to multiple-children households; are families looking at costs over $1m if they have a family of four? Of course not; items can be handed down, the housing costs remain the same regardless of the number of children, and other factors make the true figure incredibly difficult to calculate.

In conclusion

If you’re worried about having a child, or another child, due to these alarmist figures, don’t be. The figures don’t tell the whole story, and most parents find they can meet the costs of their new arrival with a little savvy financial management. Do what’s right for you and your family; everything else will fall into place in its own, unique way.