Year 6 Update: How Much Money do Kids Really Cost?

One of my most popular posts on the blog to date has been on how much money kids cost and whether raising kids is really as expensive as everyone says it is. Within that post, I shared a deep dive into the USDA’s most recent report on the average costs of raising a kid, and how much we spent during the first 5 years of our daughter’s life. Here’s an update of how much our kid cost in year 6.

How much does raising kids usually cost?

Once again, I’m going to share the shocking results of the United States Department of Agriculture’s (USDA) 2017 study, which stated that the average cost of raising a child born in 2015 is expected to be $233,610! 

Adjusting these findings for inflation through August 2022, using data from the U.S. Bureau of Labor Statistics (BLS), would increase this estimate to over $281,000! Inflation is not your friend.

These estimates didn’t even include the cost of sending that kid to college, which could easily add a hundred thousand dollars or more!

As a reminder, the USDA’s estimates represent expected costs per child for a married, middle-income family, with two kids. Changing the number of kids, income level, or location, all resulted in different estimates. Additionally, there are economies of scale as the number of children increases. As such, the estimated cost for an only child averaged 27% more than the cost for kids in a family with two children.

Year 6 Update: How much our kid cost from age 5-6

Although I was no longer working and we’d graduated out of full-time daycare, year 6 was quite a bit more expensive than the $3,417 we spent in year 5.

With the easing of pandemic fears and restrictions, we reentered society, sending our daughter to preschool, which raised our costs substantially – representing about half of the total costs for year 6. We also enrolled her in more activities, attended more parties, and (finally!) began travelling again.

Break out of what we spent in year 6, by category:

Note: If interested, you can find a breakout of our actual costs by category for our daughter’s first 5 years in my original blog post. I also regularly share our monthly expenses on the blog.

Where did these amounts come from?

I love budgeting and tracking our money! As with the first five years, it wasn’t too difficult to pull together enough information to determine our child-related costs for our daughter’s sixth year.

For the most part, we continue to maintain separate kid categories for clothes, activities and other purchases, which makes this easy. A couple categories require a little more digging to compile.

I explained each of these categories in detail within my original post, which I won’t repeat herein. However, I am including a brief update below for the categories where we continue to rely on estimates for determining costs.

Food

Food remains our only true, significant estimated cost.

When calculating food costs for the first five years, I performed two separate calculations to arrive at a grocery allocation percentage of 15% for our daughter. This isn’t too far off from the USDA’s observed percentage of 17-25% per child.

Although our growing kiddo ate a little more food this past year, I decided to keep the percentage at 15% of our total grocery bill. We don’t buy juice or many overpriced, processed kid foods. While our daughter’s a pretty picky eater, she typically ends up eating smaller amounts of foods we would buy and cook anyways. Additionally, her Pre-K program offered free hot lunch last year, which eliminated the cost of her mid-day meal 5 days a week, for 10 months of the year.

When it comes to restaurants, we continue to mostly cook at home, treating family dining out as an occasional “treat” to enjoy. Most of our restaurant spending was for Mr. RFL’s and my weekly “day dates” (coffee, lunch, happy hour), so it too wasn’t difficult to comb through the charges and come up with a pretty solid estimate for how much of that spending to allocate to our kid.

Travel

This is a new category I added for this update. We finally started travelling again last year!

Travel costs for our daughter during the first five years would have been immaterial. We didn’t fly or travel extensively during the first two years of the pandemic. Prior to that she was either young enough to fly for free or her travel costs were covered by Mr. RFL’s employer (when we moved cross country).

Now that she is school-aged and we’re travelling again, these costs are likely to dramatically increase in future years.

For year 6, the incremental costs of having a child for travel were still pretty low. This is mostly because we didn’t have to pay for plane tickets for our two-week New England vacation last year.

The amount allocated to kids cost for this year 6 update includes our daughter’s plane ticket for our October 2021 trip to the Smokey mountains, along with 20% of our (non-alcohol) restaurant costs from that vacation and our New England road trip, plus a few bucks for souvenirs.

Average kids cost update (broken out by age 0-6)

How much kids cost will vary from year to year. You can check out the USDA study for the full breakout of expected costs by age range.

Since our daughter was born around the time this study came out, I used the data to compare our actual costs to the expected costs by year.

Note: USDA data obtained from Table 10 in study. Average costs for middle income, married households in 2017 dollars (inflation 2.2%).

Wow, that is a lot of money!

According to the USDA report, the amounts above are in 2017 dollars, so it’s not a perfect apples-to-apples comparison to our own spending. Additionally, these costs were determined per child for a 2-child family. Since some child related purchases can be shared, they provide a multiplier of 1.27x for single-child homes. That would bring the total amount we should compare our own costs to up to almost $103,000!

While I’m happy to see that our spending is still below average, seeing costs of $75,000 – $100,000 per child for just a six-year period validates that raising kids is indeed expensive.

Factoring in the financial benefits of having kids…

Despite how expensive kids are, there are some financial benefits to having kids which offset some of the above costs.  

As mentioned in my original post on the cost of having kids, the biggest financial benefit to having kids are the tax benefits.

Historically, parents making under a very generous income threshold have been able to claim a child tax credit of $2,000 (or more) per child.

Our daughter’s 6^th year happened to align with the pandemic and our lowest income year ever as a couple, which helped us earn an additional tax credit and stimulus money of $5,000 for our kid… with a little tax planning! This brought our net cost for year 6 down to $5,979.

Certainly, these financial benefits are not a reason to have kids in the first place. However, they can really add up to reduce the costs of having kids, so are something to include in your considerations.

Conclusion: Still expensive… and still worth it

Our daughter continues to cost us a lot of money each year. However, we also continue to spend well below what the USDA suggests kids cost per year for what I feel like is a pretty good life.

While it’s important to consider the costs, the numbers above are just a benchmark. There are plenty of ways to spend less and still raise happy, healthy, thriving children.

I hope you enjoyed our kids cost update for year 6! If you have kids, do you track how much you spend on them?

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Cover image by alteredego from Pixabay

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