Raising a child more expensive as studies find it takes $300,000 to do so

With the inflation and economic status today, it would take $300,000 to raise a child

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Inflation has pushed up food and gas prices, which means it has become more expensive for people to raise a child.

The cost of raising a child

The Brookings Institution prepared an estimate for the Wall Street Journal, which concluded that couples with two children would need to spend more than $300,000.

The estimated amount will be used to raise a child born in 2015 until he graduates from high school.

The cost is a significant increase from the $26,000 Brookings estimated two years ago, an increase of more than 9%.

The calculation is based on a range of expenses that have increased, including housing, food, clothing, education and childcare.

Previous estimations

The $310,605 price comes from the US Department of Agriculture’s estimate of the cost of education, according to Isabel Sawhill, an economics researcher at the Brookings Institution.

In 2017, the USDA reduced the cost of raising a baby born in 2015 to around $233,610.

The cost is a significant increase from the $26,000 Brookings estimated two years ago, an increase of more than 9%.

“A lot of people are going to think twice before they have either a first child or a subsequent child because everything is more,” said Sawhill.

“You may also feel like you have to work more.”

“It’s kind of a wake up call to parents. It tells them you better think hard before you have a child or another child, because it’s going to have a major impact on your pocketbook,” she added.

“You’re going to have to make trade-offs in terms of what else you spend your money on, or on how much you work.”

Inflation

The sharp increase is due to historically high inflation, which has been a thorn in Americans’ side over the past year.

Sawhill says inflation estimates are based on what happened when inflation last hit the same level in the late 1970s and early 1980s.

As a result, rising costs at the start of the pandemic disrupted household savings in the form of cash and unemployment benefits.

As inflation has slowed in the country, Brookings researchers have discovered its impact on the economy over the past year by increasing the cost of raising children.

Earlier this year, inflation peaked in 41 years, leaving households indebted to credit cards and dependent on food banks due to rising costs of food, gas and housing.

“It’s particularly important for lower income families because the cost of raising a child, although it varies with your family income or socioeconomic status, it doesn’t vary that much,” said Sawhill.

“The cost of raising a child is going to be a much larger proportion of the budget of a lower income family than a higher income family.”

Estimates for children who grow into adulthood

Brookings estimates only cover a child’s high school education; it does not include the price tag that strikes families when children are adults.

“So if you’re a parent and you expect or want your child to go to college, then you really need to add quite a lot more to that estimate,” warned Sawhill.

Sawhill noted that it remains to be seen whether the country will see more government support for higher education in a decade or how tuition fees might change.

Generation Z and Millennials on having children

Last November, a Pew Research Center study found that adults in the United States have decided not to have children.

44% of non-parents said they will not have children in the future, a 7% increase from 2017.

74% of parents between 18 and 50 also said they would no longer have children.

More than a quarter of young parents who are not expecting children attribute their decision to economic reasons.

Millennials have already chosen not to pursue parenthood, citing climate change and economic uncertainty.

Others have also revealed that they want to focus on their careers, avoid the high costs of parenting and maintain their independence.

“I’ve often said it’s probably the most important decision you ever make, with the possible exception of who you select as a partner or who you marry,” said Sawhill.

“Those two really huge long-term decisions that are gonna affect your life for quite a while.”

“Between the two, you can divorce a spouse. You can never divorce a child. They’re going to be part of your life forever.”

References:

Study finds it now costs $300,000 to raise a child

The child-free life could save you $300,000 per kid

Opinions expressed by Miami Wire contributors are their own.

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