Maggie Davis
Having a child is daunting for several reasons, and costs are top of mind for many Americans.
The latest LendingTree study shows that the annual costs associated with raising a small child (from food and apparel to transportation and child care) at $29,419.
Here's what the study found
- The annual costs associated with raising a small child have jumped 35.7% since we last conducted this study in 2023. Annual expenses minus tax exemptions or credits total $29,419, up from $21,681 in our 2023 study. Over 18 years, costs add to $297,674, up 25.3% from $237,482 in our last report.
• Annual expenses to raise a small child total $36,472 in Hawaii — more than any other state. Massachusetts and Washington follow at $33,004 and $32,418, respectively. Conversely, annual costs are lowest in Mississippi ($16,490), South Carolina ($17,699) and Alabama ($17,870). Only six states have infant day care costs of less than $10,000 annually, guiding them to the lowest overall annual expenses.
• In four states, families are projected to spend more than $300,000 over 18 years on costs associated with raising a child. This is the case in Hawaii ($362,891), North Dakota ($325,158), Washington ($318,714) and Maryland ($310,040). It’s projected to cost less than $200,000 in this period in Mississippi ($190,402) and the District of Columbia ($194,108).
• Wyoming saw the biggest increase in the 18-year cost to raise a child, up 47.9%. North Dakota follows at 44.0% — the only other state above 40.0%. New Hampshire (34.9%) rounds out the top three. Just three states saw a decrease in 18-year costs: the District of Columbia (7.5%), Oregon (4.9%) and North Carolina (0.8%).
• Families spend an average of 22.6% of their income on the basic annual expenses to raise a child, up from 19.0% in our 2023 study. The percentage is lowest in the District of Columbia (14.0%) and highest in Hawaii (25.4%).
How we arrived at our findings
Our research highlights the costs of raising a child — specifically, the additional costs that impact parents. That includes a mix of child-specific expenses (like day care) and regular household expenses that raising a child can impact (like rent).
As an example, we incorporate full child care costs since that’s an additional cost of raising a small child. However, for expenses like rent, we only tally the cost difference between households with and without children to show the true impact.
The majority of our data is from 2023 based on availability, but our national day care data and our info on tax exemptions or credits are newer. Here’s a look at the categories and how they were calculated:
• Rent: The difference in average rent paid between households without children and households with a child younger than 18 present. This is calculated by state. (U.S. Census Bureau 2023 American Community Survey — ACS — with five-year estimates)
• Food: The difference in typical food spending between a two-person household and a two-person household with a child. This is calculated by region. We used different sources by state and nationally because of data availability. (State: Massachusetts Institute of Technology — MIT — Living Wage Calculator, June 2023; national: U.S. Bureau of Labor Statistics — BLS — Consumer Expenditure Surveys, 2023)
• Day care: By state, data is based on the annual price of center-based child care. Nationally, it’s the average child care cost for one infant at a day care center. We used different sources by state and nationally because of data availability. (State: Price of Care: 2023 report from Child Care Aware of America; national: Care.com 2024 Cost of Care Report)
• Apparel: The average amount married couples with children spend each year on apparel for girls ages 2 to 16. Researchers chose girls clothing due to typically higher spending compared to boys clothes. (U.S. BLS Consumer Expenditure Surveys, 2023; U.S. Bureau of Economic Analysis — BEA — regional price parities were used to calculate state estimates)
• Transportation: The difference in typical transportation spending between a two-person household and a two-person household with a child. This is calculated by region. We used different sources by state and nationally because of data availability. (State: MIT Living Wage Calculator, 2023; national: U.S. BLS Consumer Expenditure Surveys, 2023)
• Health insurance premiums: The difference in the average annual cost of premiums for a single person on workplace insurance (times two for two adults) compared to a single workplace-based family plan. (KFF, 2023)
• State tax exemptions or credits: This assumes that two parents filing jointly (married) earn the national median income for families. For exemptions, the subtracted amount is the exemption amount multiplied by the marginal tax rate for that national median income. For credits, the dollar amount of the credit was applied. (Tax Foundation and IRS)
