How Much Does A Kid Cost and Can I Afford One?

This post comes as a result of a recent request from a co-worker of mine, and being the finance nerd I am, I couldn’t resist investigating it!

The question is, “How much does a kid cost to raise and how do you determine if you can afford one?”

Ok, so turns out, it really is two questions. Let’s tackle each one individually:

How Much Does Raising a Child Cost?

After studying several estimations of the cost of a child from different resources, I found that the cost of raising a child from age 0 to age 22 can range anywhere from $250,000 to $500,000.

Since this was such a wide range, I then began looking for a tool that would allow me to calculate the cost of raising a child, given an individual’s specific conditions/goals. The best thing I found was the financial calculator at the link below.

Cost of Raising a Child Calculator

By assuming that a child is born this year (2010) in the northeastern USA to a two parent home with a annual income of >$64,000 and plans to go to a public college, the tool calculates a total cost to raise the child of $348,418.

Out of curiousity, let’s just see what happens when we leave all of the variables the same, except that we’ll change the location from the northeast to the southern USA. The resulting cost then comes out to be $340,552.

Note: the topic of cost of living differences between locations will be the topic of another post. However, to wet everyone’s appetite for now, let’s look in to this specific case a little further.

At first glance, the financial difference between where you decide to raise your child doesn’t appear to be that great. However, in the interest of fun and looking out over the long-term, let’s apply the miracle of the Time Value of Money to the equation. Completing the subtraction, the difference comes out to be $7,866.

Now, let’s assume assume that a couple has a child at age 26 in the South, raises the child for 22 years, at which time they are 48 years old. They then place the $7,866 that they saved by living in the South in to their IRA, and invest it at 12.4% return until retirement at age 65. By applying the equation of compound interest, this one lump sum of approximately 8K grows to $57,382.73 by retirement. Quite a big sum! This is just food for thought for deciding on your relocation options for having a child.

Can I Afford A Child with My/Our Current Income?

According to the MSN article below, it appears that the total yearly cost of raising a child only fluctuates by around $1000 from year to year. So, for the sake of analysis, we are just going to assume that the total cost of $348,418 (using total child cost for the Northeast) is distributed equally to each of the 22 years to raise the child.

Yearly Cost Breakdown of Raising a Child –

Performing the division, this results in an annual cost of  $15,837, or $1,320 per month, or $329 per week.

Now that this has been broken down in to terms that humans can grasp, the reality begins to sink in. Do you have an extra $1,320 per month?

So, as you begin to think about this possibility given your personal financial situation, I will do the same thinking out loud below.

Currently, the income that my bank account sees each month after my fixed housing expenses are taken out is $1700. Normally, I spend approximately $700-$1000 per month on living expenses (food, entertainment, transportation, etc). This only leaves $700 for a child. Big surprise right? In my situation, I would have to do some serious rearranging of my financials to be able to support a child.

So, I’ll leave you with the question…Can you afford a child?…..

Keep on learning!


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  1. …not only a rearranging of financials, but you’d need a baby momma too 😉 Thanks for the info!

  2. Good point! I was just thinking about the financials! haha

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