A Baby Born in 2007 Will Cost Over $200,000 to Raise

Having a baby in 2007 will carry a hefty price tag for middle-income parents. The U.S. Department of Agriculture estimates that by the age of 18 a baby born in 2007 will cost the parents $204,060. The cost of feeding a child has decreased, but other areas of expense such as child care and education have increased significantly. The average family is hit hard by these items, as well as housing expenses, and even a two-income household can have difficulty budgeting.

Dramatic Increases in Child Care and Education

Since 1960, the cost of providing food decreased from 24 percent to 17 percent of total child-rearing costs. At the same time child care and education expenses shot up from 2 percent to 12 percent. Not surprisingly, housing remains the single largest expenditure averaging 33 percent of the total costs by a child's 18th birthday. Interestingly, the share for the cost of housing increased only slightly from 31 percent of costs in 1960.

Family Income Directly Affects Child-rearing Expenses

The expense for raising a child born in 2007 increases proportionately with income, and vice versa. Families with gross incomes below $45,800 are projected to spend $148,320 on expenses related to child-rearing, where families with an income above $77,100 can expect to spend $298,680. Those in the middle are estimated to spend around $200,000. Unfortunately, these amounts do not take into account college expenses.

In summary, adjusting for inflation, the overall cost of raising a child has increased 15 percent from 1960 to 2007. The growing financial challenges of raising a family in the U.S. are not just the result of excess worry but documented fact. Coupled with increases in the cost of oil and greater difficulty accessing credit, one can expect these estimates to be adjusted upward. In 1960 dollars, a middle-income family in 1960 with a new baby could expect to spend $25,230 on food, shelter, clothing and other necessities to raise a child through age 17.

Geography Also Plays a Role in the Expense of Raising a Child

With regard to geography, the expenses for raising a child are highest for families living in the urban west, followed by the urban northeast and the urban south. On the lower end of the scale are families living in the urban mid-west and rural areas throughout the United States.