One of my most popular blog posts so far has been about how much money kids cost and whether raising kids is really as expensive as everyone says it is. My initial post back in October 2021 included a deep dive into the USDA’s report on the average costs of raising a kid, and shared how much money we spent on our daughter’s first 5 years of life. I’ve been providing annual updates ever since. After much delay, here’s my kids cost update for year 7.
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 that was born in 2015 is expected to be $233,610!
Adjusting these findings for inflation through December 2023, using data from the U.S. Bureau of Labor Statistics (BLS), would increase this estimate to over $295,000! Yay, inflation.
These estimates don’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.
Kids Cost Year 7 Update: How much we spent between age 6-7
During our daughter’s 7th year, our costs decreased by about $3,700 when compared to the prior year. This was primarily driven by the fact that she began attending public school during that year. No more daycare or preschool tuition = big savings.
We didn’t completely avoid childcare costs though. We still kept her in after-school care for most of the year, since that was also the year that I decided to experiment with semi-retirement. However, the decision was driven as much by her desire for extra social time (as an only child) as it was for me needing the care.
Costs for her travel and a couple other expenses increased this year, which partially offset the childcare savings.
Break out of what we spent in year 7, by category:
| Category | 6-year-old |
| Childcare | $1,544 |
| Medical | $7 |
| Health insurance | $770 |
| Clothes | $293 |
| Food | $1,574 |
| Activities | $1,361 |
| Travel | $1,135 |
| Other Gear/Supplies/Toys | $554 |
| Total | $7,238 |
| Total excluding childcare | $5,694 |
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, as well my last update for year 6 here. I also regularly share our monthly expenses on the blog.
Where did these amounts come from?
I regularly budget and track our spending, probably at a more detailed level than most people might find necessary. It’s my nerdy hobby.
As with the first six years, it wasn’t too difficult to pull together enough information to determine our child-related costs for our daughter’s seventh 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.
We rarely buy juice or any overpriced, processed kid foods. While she’s a bit picky, our daughter typically eats smaller amounts of foods we would buy and cook anyways. However, as she’s grown and eaten more food this past year, I decided to up our allocation percentage to 18% for year 7.
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
During this phase of our daughter’s life, we finally started travelling more… and consequently saw the costs of travelling with a kid go up.
Travel costs for our daughter during the first five years were 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).
Year 7 is when we finally felt the impact of these costs.
The amount allocated to kids cost for this year 7 update includes our daughter’s plane ticket for our Two-week North Carolina vacation last year. It also includes approximately 20% of our (non-alcohol) restaurant costs from that vacation, our three-night trip to San Diego, and our Southwest Colorado Road Trip last year. The final component of this number is for any souvenirs or activities on these trips that were specifically for our child (i.e. Children’s museum admission, stuffed animal from the SanDiego zoo, etc.).
Average kids cost update (broken out by age)
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 original data to compare our actual costs to the expected costs by year. If your child was born more recently, you might want to update these amounts for inflation.
| Age | Our Actual Costs | USDA Report (Per child) |
| <1 | $14,457 | $12,680 |
| 1 | $19,688 | $12,960 |
| 2 | $13,537 | $13,250 |
| 3 | $14,069 | $13,600 |
| 4 | $3,417 | $13,900 |
| 5 | $10,979 | $14,210 |
| 6 | $7,238 | $14,100 |
| Total | $83,385 | $94,700 |
Note: USDA data obtained from Table 10 in study. Average costs for middle income, married households in 2017 dollars (inflation 2.2%).
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 $120,000!
While I’m happy to see that our spending is still below average, seeing costs of $90,000 – $120,000 per child for just a seven-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 a portion 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 less than a very generous income threshold have been able to claim a child tax credit of $2,000 (or more) per child.
Our daughter’s 6th 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!
However, in her 7th year, our income was at its peak, so we exceeded the thresholds for any tax benefits. We are not counting on any further financial benefits in the future until Mr. RFL stops working and our income is reduced.
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: We’re 7 years in and it’s still expensive… but also still worth it
Our daughter continues to cost us a lot of money each year. However, we also continue to spend less than 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 7! If you have kids, do you track how much you spend on them?
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Featured image by Jill Wellington from Pixabay
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