The costs of raising a child

Stacey Vanek Smith: From late night feedings to the teenage years, there's no question that having children comes with some emotional costs. But what about cold, hard cash?

We take a look at that today in Money Matters, our regular segment exploring how the news of the day impacts our pocketbooks. Marketplace Money's Adriene Hill joins me now, and she has something of a personal interest in the topic -- her first child is due later this year. Good morning, Adriene.

Adriene Hill: Good morning, Stacey.

Vanek Smith: So let's get down to brass tax. In fact, this should be very pertinent for you.

Hill: It is.

Vanek Smith: How much does raising a kid cost?

Hill: Well on average, the U.S. Department of Agriculture estimates a middle-income family with two parents will spend about a quarter of a million dollars from age zero to age 18.

Vanek Smith: Wow, that sounds like a lot.

Hill: It is. It's a big number, but the cost actually completely depends. And here's Mark Lino, who wrote the government report.

Mark Lino: Costs vary by household income -- the more income you have, the more you spend on a child.

The cost also depends on where in the country you live -- urban areas in the Northeast are most expensive -- and how many other kids you have.

Vanek Smith: So the second kid is cheaper than the first, the third is cheaper than the second?

Hill: Exactly right.

Vanek Smith: So what makes kids so costly? I mean, it's not like the parents are buying infinite stuffed animals or PlayStations, I imagine.

Hill: It'd be fun. Toys are not the top expenditures. Housing costs make up a big chunk of the costs of a kid, which it's about a third of a cost of a kid, you need a place to put them and let them sleep. You've also got to pay for childcare, food, transportation, health care. And you've got to keep them clothed.

Vanek Smith: I guess so, I guess that depends on where you live. [laughs] But Adriene, are some ages more expensive than others for kids?

Hill: You might think babies would cost the most, and I kind of expected that they were. Turns out I was wrong, and here's Lino again.

Lino: Teenagers are the most expensive. They have high transportation costs, vis a vis when they start to drive. So you have to add them to your auto insurance. And they also have high food costs.

Vanek Smith: Not to mention the emotional costs, I imagine.

Hill: All those Kleenexes girls require.

Vanek Smith: Exactly, exactly. But do these numbers include college?

Hill: They don't, which if you have a college-bound kid that you're hoping to help out, can raise these numbers dramatically. The study also doesn't include any other cost after 18, which as a lot of parents will tell you is not when the bills stop coming in.

Vanek Smith: Our own Adriene Hill, thank you Adriene.

Hill: Thank you Stacey.

About the author

Adriene Hill is the senior multimedia reporter for LearningCurve.

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