Mom and toddler playing peek-a-boo

Becoming a parent is an exciting and rewarding journey, and it also requires a lot of preparation and hard work. In addition to baby-proofing your home, reading up on parenting styles and stocking up on diapers, you want to ensure you’re financially prepared for parenthood as well. After all, it’s no secret that kids can be expensive.

How much does it cost to raise a child?

The average cost of raising a child in the United States from birth through age 17 is $233,610. How does that amount (which probably feels staggering — don’t worry, that’s natural) typically get divided up?

The money typically goes toward:

  • Housing
  • Food
  • Childcare
  • Transportation
  • Healthcare
  • Clothing

Of these, housing, food, childcare and transportation account for the bulk of your spending. But you’ll also put a fair amount toward personal items such as sports equipment and toys, entertainment like subscriptions and video games, and personal care expenses like haircuts and toothpaste.

Illustration of a baby room with a crip. Text overlay: The cost of bringing up a baby. $233,610. Housing, food, childcare, transportation, healthcare clothing, personal care.

Beyond these main expenses, you’ll also likely devote a portion of your budget toward insurance and education. Health insurance can help you defray the high cost of medical care once your child is born, and you’ll need to increase your car insurance coverage when your teenager begins to drive so they’re protected when behind the wheel. Life insurance is another way to protect your family’s financial security in the event of unexpected death.

Different options for having a child

The bills will often start piling up before your bundle of joy even arrives. Expenses can vary quite a bit depending on your journey to parenthood: through childbirth, surrogacy or adoption. Before you decide to have a child, talk to your partner about the potential expenses involved and how much you can take on financially.

Timeline showing the costs of pregnancy and childbirth. Fertility care: Invitro fertilization ($12,000 to $17,000), Intrauterine insemination ($300 to $1,000), Maternity care ($4,500), Delivery ($5,000 to $14,500)

Childbirth

If you become pregnant, the costs can vary depending on where you live, your health insurance and your medical situation. The average price of having a baby through vaginal delivery is between $5,000 and $11,000 in most states. For a c-section birth, the average cost ranges from $7,500 to $14,500.

While health insurance can reduce the cost, the average out-of-pocket spending for maternity care among women with employer-based health insurance increased to $4,500, up from $3,000 in 2008. Remember that in addition to the birth itself, you will also pay for regular check-ups, tests and other costs related to pregnancy.

If you need fertility treatment, there will be additional costs. An estimated 10% of women report that they or their partners have received medical help to become pregnant. A round of intrauterine insemination has an average cost of between $300 and $1,000 without insurance. Meanwhile, one cycle of IVF (in-vitro fertilization) costs between $12,000 and $17,000 on average. Health insurance may cover some of the expenses related to these treatments.

Surrogacy

If you or your partner are unable to get pregnant or carry a child, surrogacy could be an option. These fees range between $120,000 and $150,000 depending on the state. Costs include surrogate compensation, legal fees, agency fees, fertility treatment, prenatal care, and labor and delivery. This process can get costly because it involves numerous parties (including compensation for carrying the child to term). Additionally, these medical expenses might not be covered by insurance.

Adoption

Adoption is another route to parenthood, and the cost can vary depending on the type of adoption. Adopting through the U.S. foster system is generally the most inexpensive option, with an average cost of under $2,600. Adopting an infant in the United States either through an adoption agency or an attorney ranges between $20,000 and $45,000 depending on where you live. The cost of international adoption differs depending on the birth country of the child and can range from $35,000 to $70,000.

To make adoption more affordable, financial assistance is available. You may qualify for grants and loans, and the federal government also offers a tax credit for qualifying adoption expenses. Some employers may offer adoption assistance programs as well.

Childcare and education expenses

Before your little one goes off to school, childcare can be a large financial burden for working parents. Whether you choose daycare, a nanny or a babysitter, you likely need to budget for your children’s care in their younger years.

Childcare costs

The average childcare cost for one child in 2020 was $612/week for a nanny, $340/week for a childcare or daycare center, and $300/week for a family care center.

Education costs for a child

Once your child is ready to begin school, these costs typically fall. Public schooling is generally funded by tax dollars and free of charge to families. Although you likely won’t pay tuition, you will need to budget for school supplies and potentially some extracurricular activities (soccer shoes, ballet lessons, hockey equipment, etc.).

If you choose to send your child to a private school, though, you can expect to pay an average of $11,870 per year in tuition. Tuition can vary greatly depending on location. In Connecticut, the average tuition cost is $27,421, while the average in South Dakota is $3,699.

The cost of homeschooling your child can range from $700 at the low end and $1,800 at the high end annually. With homeschooling, you’re responsible for everything from curriculum to books and supplies, but may find opportunities to reduce costs, such as borrowing books from the library or homeschool sharing with other families.

The cost of higher education

If you decide to partially (or completely) fund your child’s higher education, this can be another major expense on top of the $233,610 average to raise a child to 17. Between tuition, books, housing and meal plans, college expenses can add up quickly. You have a number of options to save for your child’s college, and when it comes to starting to save, the earlier, the better.

Can I afford a child?

Becoming a parent is a big decision. A child will impact nearly every aspect of your life, and your finances are no exception. To help determine the affordability of parenthood, start by creating a budget to get a clear idea of exactly how much everything will cost and how you can adjust your spending as you grow your family.

While it’s helpful to stick to a well-defined financial plan, flexibility is also essential. As your child grows, your needs and priorities may change. Some costs may increase over time. Unexpected life changes, like a major move, could impact your cost of living. Having some wiggle room in your budget ensures you can make adjustments and stay on track with your financial goals.

Surprise expenses are inevitable. A healthy emergency fund will save you stress when the unexpected occurs. Whether it’s a dental procedure, a school trip or a new paint job when your toddler decides to “decorate” the walls, having a cushion for those extra expenses comes in handy.

Plan for the cost of a child with confidence

A child is sure to transform your life. Parenthood is full of both responsibility and joy. You will learn a lot along the way, and managing your finances is just one crucial aspect of parenting. With careful planning, you can begin your parenthood journey with faith in your financial future.

Ready to start saving for a growing family?

Start with an Ally Bank Online Savings Account.