Raising a Child Keeps Growing More and More Expensive

New government data show the cost of raising a child is far more expensive now than in 1960.

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The wealthiest one-third of families in the U.S. could expect to spend nearly $400,000 on raising a child.

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It costs $241,080 for a middle-income, husband-wife family to raise a child born in the U.S. in 2012, according to a report released by the U.S. Department of Agriculture on Wednesday.

The figure shows that raising a kid for 18 years is far more expensive than it used to be. As of 1960, the figure was at $195,690, in 2012 dollars, meaning that the cost has grown by 23 percent since then, even when accounting for inflation.

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A variety of factors have pushed that cost upward, says Mark Lino, economist at the USDA Center for Nutrition Policy and Promotion and the report's author. One is housing, the area in which parents spend the most on their children. Housing accounts for 30 percent of the cost of raising a child. That's little changed since 1960, says Lino, but Americans across the income spectrum spend much more on housing in general now than they did back then.

"People are buying larger homes," he says. "Homes have more bathrooms, so the housing cots of raising a child has increased."

Health care used to account for 4 percent of the cost of raising a child. In 2012, that share had doubled to 8 percent. It's no secret that health care is getting more expensive, says Lino. Adding new people to a household only serves to add on to a home's health care bill.

Finally, there is the phenomenon of child care. Once upon a time, families spent very little money on hiring people to watch their kids – only 2 percent of their total child-rearing expenditures went toward child care and education, as of 1960. Today, that proportion has grown nine-fold, to 18 percent.

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That massive shift has been due in part to an influx of women into the workforce, leaving no one home to mind the kids, says Lino.

"With more and more women entering the labor force, there's been a dramatic shift since 1960," he says. "In 1960, child care was almost considered babysitting when parents when out or when the mother went out shopping."

That means that while women leaving home may have boosted the cost of raising children, the phenomenon also left many families with more money to spend on raising those kids.

Not that all families will end up spending the same amount. The wealthier the family, the more they will spend, according to the USDA. The wealthiest one-third of families in the U.S. could expect to spend nearly $400,000 on raising a child, while the lowest-income families will spend an estimated $173,490.

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Likewise, rural families spend far less on their kids than the broader population. A middle-income family can expect to spend $190,290 on raising a child, more than 20 percent less than what middle income families nationwide spend.

Of course, none of these figures incorporate one of the biggest costs many parents incur in raising kids: college. And considering the skyrocketing costs of tuition, there's no telling how much more parents might have to shell out in 18 years to give their kids a college education.

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