The Costs of Being a Dad -- What It Costs to Raise a Child

The cost of being a dad and how much it costs to raise a child

Here’s a sobering thought for Father’s Day: It costs about a quarter of a million dollars to raise a child, without accounting for inflation. If you would like to send him or her to college, you will probably need at least that much more.

A 2017 report from the U.S. Department of Agriculture (USDA) estimated the cost of raising a child from birth to age 17 at $233,610 ($284,570 adjusted for inflation).

That is for the average middle-income couple; costs ranged from families in the Northeast that will spend around $264,090 to residents in the urban Midwest and rural regions who will spend about $227,400 and $193,020, respectively.

Costs Are Soaring

Unfortunately, that figure is not likely to drop, and inflation-adjusted wages are not filling the gap. Costs are up across the board, and certain areas are taking an increasingly large share of the costs – especially health care, childcare and education (pre school through high school).

That ratio will continue to climb based on recent trends, especially with respect to childcare.

Child Care of America (CCA) put out an extensive report in December breaking down the demographics of childcare costs by state and the variations with respect to income and style of child care.

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Income Not Keeping Up

Combining their data with Department of Labor statistics, CCA estimated that just in the last year, childcare costs outpaced family income by up to a factor of eight.

The CCA report shows that childcare costs and housing are the two largest components of household expenses by far – varying slightly by region, but each one is approximately twice the expenses of transportation and food, and around five times the expenses of utilities and health care.

The percentages from the USDA report do not show childcare as quite as large of a component. Housing tops the percentages of child-raising costs at 29 percent, followed by food at 18 percent, childcare and education at 16 percent, transportation at 15 percent, health care at 9 percent, and clothing at 6 percent. Miscellaneous costs compose the remaining 7 percent.

Childcare Expenses

The Department of Health and Human Services (HHS) sets 7 percent of family income as a general benchmark for affordable childcare – yet in the CCA study, only nine states averaged less than 10 percent of family income for child care – the Dakotas, plus the southern block of Arkansas, Louisiana, Mississippi, Alabama, Kentucky, Georgia, and South Carolina.

Unfortunately, the actual expenses of childcare are mostly independent of how much you earn. As a result, the disproportionate rise in childcare costs hurts low-income and single-parent families the most. It’s no surprise that the steep bill that comes with raising a child can put a strain on your family’s finances.

Single dads have a difficult enough time handling childcare with a single income (as do single moms), because if they can’t find affordable childcare or programs through their work, they have no choice but to rely on friends, relatives, or some form of unlicensed childcare.

Two Incomes or One?

For married couples, there will be a threshold earnings value for the lower-earning spouse where it makes economic sense to stay home and care for children – but it may be hard for them to re-enter the workplace if they do.

These are not always mothers, as there are increasing numbers of stay-at-home fathers with breadwinning mothers.

It’s okay to feel a little overwhelmed and terrified as a new father – there will be plenty more anxious moments along the way, but there will be even more moments filled with joy and wonder.

Although it won’t show up in your bank account, you are likely to get a great return on your investment of fatherhood. Have a happy Father’s Day!

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