How Much Does It Cost to Raise a Child Per Year? 18 Years of Financial Planning Tips

Having kids is rewarding, sure—but let’s not sugarcoat it: it’s expensive. The U.S. Department of Agriculture (2017) and statistics from the Brookings Institution (2015) puts the price tag at between $233,610 and $310,605 to raise a child from birth to 18. And no, that doesn’t even include college.

The good news? You’re not powerless. With some smart planning and budgeting, you can keep costs under control instead of letting them control you. Every family’s situation is different, so adjust as needed. Here’s your no-BS guide to handling the financial reality of raising a kid.

Here’s a rough breakdown of what you’re looking at based on different age groups:

Birth to Age 2: The Money Pit Years

Finding out you’re pregnant? Congrats. Now start saving. Those adorable little humans come with a huge price tag. Here’s how to get through the first two years without going broke:

Money-Saving Quick Tips:

✔ Plan for hospital costs—Know your deductible and out-of-pocket max.

✔ Diaper up smartly—Stockpile during sales, consider cloth if you’re committed.

✔ Formula or breastfeeding?—Formula costs add up fast, but coupons and store brands help.

✔ Daycare is a beast—Get on waitlists yesterday. Look into family daycare or nanny shares.

✔ Secondhand is your best friend—Babies outgrow everything in five seconds. Accept hand-me-downs.

✔ Stick to the essentials—Baby gear marketing is a scam. Buy what you actually need.

It can feel like you need to buy everything before the first day the baby comes home, but you really won’t know what you need, want, or like until you’re in it. Luckily, there’s delivery services with free shipping.

Hospital & Insurance Costs: Brace Yourself

Giving birth isn’t cheap. A vaginal birth costs around $10,000; a C-section? More like $15,000—and that’s before surprise bills show up. Insurance helps, but only if you actually understand your plan.

🔹 Know your deductible and out-of-pocket max.

🔹 Check what’s covered—prenatal visits, delivery, NICU stays (just in case).

🔹 Stash some emergency savings so you’re not blindsided.

Diapers & Formula: The Never-Ending Drain

Diapers will cost you about $70-$80 per month—that’s nearly $2,000 before potty training. Cloth diapers can save you money, but they also mean extra laundry (so, trade-off).

Formula? That’s another $1,500-$2,000 per year. Breastfeeding is cheaper if it works for you, but don’t let anyone guilt-trip you—fed is best, period.

Daycare Costs: Your Wallet’s Worst Nightmare

Childcare is brutal, but necessary. I never thought I’d choose daycare as a WFH mom. Infant daycare runs $10,000+ per year, and in cities? Even higher. Options to cut costs:

✔ Family daycare—Licensed, often cheaper than centers.

✔ Nanny share—Splitting costs with another family.

✔ Dependent Care FSA—Use pre-tax dollars for childcare if your employer offers it.

Raising kids isn’t cheap, but you don’t have to go broke doing it. Plan ahead, spend wisely, and ignore influencer moms pushing $1,000 bassinets. Your kid doesn’t care—and neither should you.

Planning for Ages 3 to 5: Welcome to the Chaos

Your kid isn’t a baby anymore, but don’t think for a second that expenses slow down. Preschool? More money. Growing appetite? More money. Random hobbies they get obsessed with for two weeks? You guessed it—more money. Here’s how to keep your budget from imploding.

Quick Tips for Ages 3 to 5:

✔ Preschool isn’t cheap—Check for public preschool scholarships and compare part-time vs. full-time costs.

✔ Use an HSA or FSA—Medical bills are still rolling in. Use pre-tax dollars to take the edge off.

✔ Hand-me-downs are gold—Kids don’t care about fashion. Buy mix-and-match outfits and call it a day.

✔ Milk free activities—Libraries, community events, and playgrounds are your budget-friendly best friends.

Preschool & Childcare: A Wallet Drain

Preschool will cost you about $8,000 per year for part-time—more if you need full-time care. My son’s preschool is almost $20,000 annually. Shop around, check state programs, and don’t assume the priciest school means the best education. Your kid doesn’t need a Montessori degree to play with blocks.

Healthcare: It Never Ends

Routine check-ups, dentist visits, vaccines—you’re still paying. Expect around $1,500 per year in medical costs, and don’t forget to budget for those last-minute urgent care visits after they discover gravity the hard way.

Food: Bottomless Pit Mode Activated

Your little one’s appetite is growing, and so is your grocery bill. Plan for $1,800 per year on food. Cooking at home saves money, and bonus: getting your kid to help in the kitchen might make them eat what you cook. (No guarantees, though.)

Clothing: They Outgrow Everything Overnight

One day, their clothes fit. The next? Suddenly too small. Budget $700 per year for seasonal wardrobe updates, but don’t pay full price—hit up sales, thrift stores, and consignment shops.

Planning for Ages 6 to 12: The School Years

Your kid is officially in school, which means new costs but also some financial relief (goodbye, daycare fees). Here’s what you’re in for.

Quick Tips for Ages 6 to 12:

✔ Use an FSA/HSA—Because doctor and dentist bills don’t disappear.

✔ Plan meals ahead—Avoid the endless money drain of takeout and pre-packaged snacks.

✔ Buy quality, not quantity—Durable shoes, coats, and backpacks last longer.

✔ Carpool like a pro—Gas isn’t cheap, and neither are unexpected car repairs.

✔ Limit extracurriculars—Pick a couple, not everything. Sports, clubs, and hobbies add up fast.

Education Costs: “Free” Public School Still Costs You

Sure, public school doesn’t charge tuition, but you’ll still drop about $1,000 per year on supplies, field trips, and extracurriculars. Private school? That’s a whole different budget nightmare.

Healthcare: Now With Orthodontist Bills

Routine check-ups, dentist visits, and surprise illnesses will run you about $2,000 per year. And if braces come into the picture? Add a few thousand more. Plan ahead.

Food: The Hunger Phase Begins

Your kid is now eating like a small adult. Budget $2,200 per year for food. Packing lunches can save money, but let’s be real—sometimes, school lunch is the easier option. Balance is key.

Clothing: Less Growth, More Durability

They aren’t outgrowing clothes every three months anymore, so invest in sturdy items that last. Plan for about $800 per year, and if your kid is hard on shoes, double-check your budget.

Housing: Suddenly, Your House Feels Small

More kids, more space, higher utility bills. Expect around $4,000 per year in housing-related costs, whether it’s a bigger place, higher energy bills, or just keeping up with the mess.

Transportation: The Mileage Adds Up

Between school drop-offs, playdates, and activities, you’ll spend about $2,000 per year on gas and car maintenance. If you’re eyeing a bigger car, factor that in too.

Miscellaneous: The Hidden Costs of Childhood

Hobbies, sports, and random must-have items (looking at you, Pokémon cards) will set you back around $1,200 per year. Save money by buying used gear and prioritizing free or low-cost activities.

Planning for Ages 12 to 18: The Expensive Independence Phase

Welcome to the teenage years—where everything costs more, and your kid suddenly has strong opinions about brands, food, and life in general. Here’s what’s coming and how to prepare without going broke.

Quick Tips for Ages 12 to 18:

✔ Braces aren’t optional—Start saving for orthodontic work now.

✔ Teach thrift shopping—If they want name brands, they can find them secondhand.

✔ Car insurance is a wallet killer—Get quotes early and set expectations.

✔ Part-time jobs are a must—If they want extras, they can help fund them.

✔ Set spending boundaries—Sports, social outings, and hobbies add up fast.

Education: “Free” School Keeps Getting More Expensive

Middle and high school bring fees for sports, clubs, field trips, and advanced placement exams—about $2,000 per year. And let’s not forget the tech: laptops, calculators, and school supplies aren’t cheap. If your teen insists they need a MacBook for school, remind them Chromebooks exist.

Healthcare: Braces, Acne, and Growth Spurts

Annual medical and dental costs jump to about $2,500 per year, and that’s before orthodontics enter the picture. Braces can run anywhere from $3,000 to $7,000—start planning early. Also, teens are walking magnets for sports injuries and last-minute physicals, so keep that HSA/FSA stocked.

Food: Bottomless Pit, Part Two

Teenagers eat like they have a second stomach. Budget $2,500 per year for food, and expect the grocery bill to spike if they play sports or “suddenly” decide they only eat organic. Cooking at home and setting limits on takeout can help keep costs under control.

Clothing: Brands, Trends, and Budget Reality Checks

Teen fashion can be a money pit if you’re not careful. Set a $1,000 per year budget and make it clear: sales, clearance, and thrift stores are their best friends. If they want designer clothes, they can get a job. Period.

Transportation: Congrats, You Now Pay for Another Driver

Driving is exciting for them—and expensive for you. Expect about $2,500 per year for insurance, gas, and car maintenance. If they want their own car? They can contribute. Teaching them basic car maintenance (oil changes, tire rotations) can save money in the long run.

Independence Comes With a Price Tag

Teenagers come with bigger expenses, but that doesn’t mean you have to foot the bill for everything. Teach them about budgeting, make them contribute where they can, and don’t cave to every “But everyone else has it!” request. Reality checks are free, and they’ll thank you later (probably not now, but eventually).

Sources:

Hamm, T. (2023, September 25). The cost of raising a child in America. Investopedia. https://www.investopedia.com/articles/personal-finance/090415/cost-raising-child-america.asp

U.S. Department of Agriculture. (2017, January 9). Families projected to spend an average of $233,610 raising a child born in 2015. https://www.usda.gov/about-usda/news/press-releases/2017/01/09/families-projected-spend-average-233610-raising-child-born-2015