Picture this: your pregnancy test just came back positive, and along with all the joy and daydreaming, the reality has set in: you’re having a baby. Raising a child can be one of the most rewarding things in life, but we won’t lie—it can also be very expensive. Now, don’t let that discourage you, but it’s still pretty important to consider how much money you’ll spend during the first 18 years, at least.
To help you get a better picture of how much it costs to raise a baby in the United States, we’ve pulled some of LendingTree’s most recent data and tapped financial experts for their insights on what to expect and how to best prepare for this next step in your life.
The total cost of raising a child will vary based on where you live across the United States and the resources you currently have access to. According to LendingTree, the average annual expenses required to raise a small child (minus tax exemptions or credits) totaled $21,681 in 2021—a 19.3 percent jump from $18,167 in 2016.
From the day your baby is born (including the cost of giving birth), the experts at LendingTree found that “families are projected to spend $237,482 over 18 years to raise a child,” averaged across all 50 states. This 18-year estimate was lowest in South Carolina at $169,327. And the highest? “Island paradise though it might be, Hawaii holds the title for most expensive place to raise a small child,” writes Jamie Cattanach, with residents of the Aloha State averaging $314,529 over 18 years.
And keep in mind that this study doesn’t include costs like college tuition or adoption or fertility costs, says Kendall Meade, certified financial planner at SoFi.
Consider a 529 Plan
If saving for college is a goal, a 529 plan can be a great tool. “529 plans grow tax-deferred, and withdrawals are tax-free if they’re used for qualified education expenses,” says Meade.
“Opening and annually funding a 529 education savings plan is a great way to save for future education expenses,” says Vincent Birardi, a wealth advisor from Halbert Hargrove. “Plus, in many states, you may qualify for a tax writeoff if you participate in your state’s sponsored 529 plan.”
At the end of the day, there’s no doubt that kids are expensive. That said, with the money being spent, you’re actually investing in building a life and sharing memories with people you love, which is worth the cost if you ask us.
